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Election battle lines sure to be drawn on welfare spending cap; WELFARE.

GEORGE Osborne set up a major battleground for next year's general election as he set a cap on overall annual welfare spending of PS119.5 billion for the first year of the next Parliament.

The cap covers all welfare payments except the state pension and benefits linked to cyclical unemployment rates - principally Jobseekers' Allowance - and is a key part of the Chancellor's strategy to drive down state spending over the long term. But it also presents Labour and the Liberal Democrats with a tough political challenge at the next election, as they will inevitably be forced to state in their manifestos whether they would raise the cap or leave it at the level dictated by the Chancellor.

Mr Osborne has already said he wants to see PS12 billion more sliced off the welfare bill in the two years following the May 2015 general election, and aides signalled that this will give him scope to create "clear blue water" from the other parties by making a manifesto pledge to cut the cap. "It is open for political parties at the election to say in their manifestos if they want a lower or higher welfare cap," said one senior Treasury aide. "The Chancellor has been very clear that he personally thinks there are further savings from welfare we could make." Labour confirmed that it will vote in favour of the proposed cap when it comes to the House of Commons next week.

Shadow chancellor Ed Balls said: "Yes, we'll vote for that next Wednesday.

We've supported the idea of a welfare cap. We have said that we should keep out the basic pension but include pensioner benefits.

"Clearly, we will do things differently from the Government. For example we have said we will abolish the bedroom tax, we've shown how we will pay for that."
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Title Annotation:Features
Publication:The Birmingham Post (England)
Date:Mar 20, 2014
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