It's a trap! Labour faces 'budget responsibility' vote

Widespread talk of a 'trap' before today's Budget appears to have been confirmed
Widespread talk of a 'trap' before today's Budget appears to have been confirmed
Alex Stevenson By

Labour will be forced to confront its deficit reduction position this autumn when the coalition pushes through a Commons vote on a new 'charter of budget responsibility'.

The gambit, unveiled by George Osborne in today's Budget statement, will mean Ed Miliband and Ed Balls will have no choice but to reveal their position on future austerity.

Osborne is already facing calls from the centre-right thinktank Policy Exchange to include "a strong set of fiscal rules" in the charter, which would look to impose strict spending restrictions on future governments in order to reduce the national debt.

The charter introduces a target for public sector net debt as a percentage of GDP to be falling at a fixed date of 2015/16.


It includes a cap on welfare which Conservatives in government hope will force Labour to accept spending on benefits must be more closely controlled in the future.

The chancellor revealed the welfare cap would initially be set at £119 billion in 2015/16 before rising in line with inflation to £127 billion in 2018/19.

Osborne said the British state should be proud of its benefits provision but added: "Never again should we allow its costs to spiral out of control and its incentives so distorted that it pays not to work.

"Any government that wants to spend more on benefits will have to meet the approval of parliament and held to account by this permanent cap on welfare."

The introduction of the welfare cap could make it harder for a Labour government to repeal the unpopular 'bedroom tax', which shadow chancellor Ed Balls has pledged to do.

Such a move would increase the welfare bill by £465 million, meaning Labour would have to choose between finding the money elsewhere from within the welfare budget or seeking permission for an increase from the Commons.

But shadow chancellor Ed Balls is understood to have already responded by saying he will back the welfare cap.

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