The Conservative chancellor, George Osborne, announced in this week’s budget that the spending cap would be set at £119.5 billion in 2015-16, and would then rise with inflation to reach an expected £126.7 billion in 2018-19.
He said: “In future, any government that wants to spend more on benefits will have to be honest with the public about the costs, need the approval of parliament, and will be held to account by this permanent cap on welfare.”
Parliament will vote on introducing the cap next week.
Osborne’s budget also confirmed that, from October, a seven-day waiting period would apply before someone could claim employment and support allowance (ESA), the out-of-work disability benefit, bringing it into line with jobseeker’s allowance (JSA).
Despite announcing details of the social security spending cap, Osborne failed to mention disability at all in his 55-minute budget speech and there were only two mentions of it in the 122-page budget document.
Spending on the state pension – which makes up nearly half of total social security spending – will be exempt from the cap, as will JSA.
But the budget document confirms that disability living allowance (DLA), attendance allowance, personal independence payment (PIP) and ESA will all be included in the spending cap.
If the government wants to change the level of the cap, there will have to be a Commons debate and vote, led by the work and pensions secretary. There will also be a debate and vote if the government breaches the cap.
Linda Burnip, a member of the steering group of Disabled People Against Cuts, said the benefits cap would have a “devastating effect” on disabled people, but would also “plunge many more children into further poverty and destitution”.
She said: “What is perhaps most surprising is that the Labour party see fit to support this retrograde move as well as the Condems.
“Instead, Labour should be opposing the cap and demanding that disabled people and children are lifted out of poverty and making some sort of attempt to tackle the barriers disabled people face and the real causes of poverty and disadvantage faced by those groups.”
Dr Sarah Campbell, principal co-author of the Spartacus report on the government’s DLA reforms, said: “Social security should always be decided based on need alone. A welfare cap ends that fundamental principle.
“A cursory look at the benefits affected by the cap soon shows that those targeted hardest are disabled people and, rather oddly, poor pensioners.
“Time after time, government policies are hitting the same people. It is time that their actions matched their rhetoric of protecting those who need it most.”
Lorraine Podmore, welfare benefits specialist at financial advisors Frenkel Topping, said the cap would be “disastrous”, and would affect all those who claim benefits, whether in work or not.
She said: “Very much a freeze in real terms, it will lower living standards of those in receipt of benefits relative to the rest of the population.”
She added: “Far from helping those who really need it – such as those in low-income jobs, rehabilitated people seeking work after illness and disability, and those unable to work – this budget leaves already vulnerable people even more exposed.”
And Simon Parkinson, a board member of the Every Disabled Child Matters campaign, said the confirmation of the cap was “deeply worrying for families of children and young people in receipt of DLA or PIP”.
He said: “Whilst the cap may not lead to immediate reductions in spending, it singles out support for parents and disabled people as needing to be capped.
“We do not believe is the right message to be sending out when families of disabled children and young people already struggle to get the support they need and are much more likely to live in poverty.”
20 March 2014