Parliamentary briefing on 'welfare cap' and Charter for Budgetary Responsiblity

March 2014

At the Budget in March 2014, the government announced it would be amending the Charter for Budgetary Responsibility to implement a new 'welfare cap' policy.

The policy, originally proposed in 2013, places annual limits on parts of Annually Managed Expenditure (AME) for social security, benefits and tax credits. Some benefits are excluded - those which are cyclical such as Jobseekers Allowance and need to be able to respond in the situation of an economic downturn and rising unemployment. However most other benefits and tax credits for working age households, including those for carers, disabled people, single parents and children, are included.

CPAG opposes the cap, which we believe will be poverty producing. We recently published new analysis that sets out the evidence why we believe this.

Our briefing for parliamentarians for their debate on the changes to the charter exlains our opposition to the cap, and also why we believe that other approaches will be far more succesful to ensuring that social security expenditure is sustainable.