Earlier today, George Osborne took to the despatch box in Parliament to present what could be his penultimate Budget.  While the Chancellor will have wanted the country to focus on the good economic news, there were also new policies which will cause concern for vulnerable people. 

The Chancellor’s good news was that economic growth is continuing, the number of people in employment is rising and the annual deficit is shrinking.  However, despite the improvements in the economy, the Chancellor was clear that the Government is not going to change its current strategy, saying that for the economy, “the biggest risk is clear: abandoning the economic plan that is working.”

During last year’s Budget and Spending Round, the Chancellor announced that the Government would introduce a spending limit on ‘annually managed expenditure’, which is the demand-led spending that amounts to about half of the Government’s expenditure.  Annually managed expenditure includes things like pensions, debt interest and welfare.  At the time, it triggered concerns that further welfare cuts might be imminent, but without more detail, it was very difficult to find out how disabled people might be affected.

Today, George Osborne confirmed that the cap on welfare payments would go ahead and will begin in April 2015.  The Chancellor announced that initially the cap would stand at £119.5 billion, rising to £126.7 billion by 2018-19.  At the beginning of each Parliament, the Chancellor will be expected to set out the welfare cap for the next four years and any breach of the spending limit will lead to a debate and vote in Parliament.  The welfare cap will be included as part of the new “Charter for Budget Responsibility.”  While the argument for fiscal responsibility is difficult to disagree with, we are worried that a cap on welfare payments will limit the Government’s ability to respond flexibly when circumstances change, potentially leading to a further squeeze on disabled people’s incomes.

Although the welfare cap will exclude pensions and Jobseekers Allowance, the list of benefits which the cap will be compromised of is substantial and includes:

•    Attendance Allowance,
•    Carer’s Allowance,
•    Disability Living Allowance,
•    Employment and Support Allowance,
•    Housing Benefit,
•    Incapacity Benefit,
•    Income Support,
•    Personal Independence Payment and
•    Universal Credit.

There is potential for disabled people to be significantly affected by the welfare cap, but as yet, it’s unclear what the consequences would be if the cap was reached and Parliament refused a request from the Chancellor to increase it.  Beginning tomorrow and continuing into next week, Parliament will be debating the policies outlined in the Budget.  We hope that further details about the cap will become clear before MPs are expected to vote on whether or not it should be introduced.

If you’re worried about what the welfare cap might mean for you, why not write to your MP, share your story and ask them to speak up for you in next week’s debate?  We will continue to monitor any further announcements about the welfare cap and will campaign alongside other charities and disabled people’s organisations to ensure that disabled people are not hardest hit by further benefit changes.

Rachel Bowen, Campaigns Officer