Saturday, January 25, 2020

George Osborne Could Breach His Own Welfare Spending Cap

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George Osborne is in danger of breaching his own self-imposed cap on government welfare spending, with Whitehall said to making plans to hold an emergency Commons vote within a month.

The Chancellor was forced to rethink and slow down £4.4bn in cuts to tax credits after the House of Lords voted to delay the changes, leaving George Osborne scrambling to find other welfare cuts to meet the target.

SKY News reports that rumored cuts to Housing Benefit, expected to be announced by the Chancellor on Wednesday, will not generate sufficient enough savings to fill the gap.

However, it has been reported that Child Benefit and Universal Credit could also be targeted for cuts.

The government lowered the welfare spending cap to £115bn for 2016/17, in response to spending forecasts by the Office of Budget Responsibility (OBR) – who also monitors compliance with the cap.

SKY News says George Osborne could find himself stuck in a policy trap that was originally meant to embarrass Labour.

A Westminster source told SKY News that Mr Osborne will almost certainly breach the cap, meaning he would have ask MPs in the House of Commons for more money.

“It’ll be breached … he’s not going to get it for next year”, the Westminster source said.

Deputy Director of the Institute for Fiscal Studies Carl Emmerson said: “Back in July the Chancellor decided he wanted to cut £12bn off welfare and he lowered the level of the welfare cap so he’s got no wiggle room against that.”

The government is said to be trying to allocate a date for the vote in the busy commons schedule.


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