Belfast Telegraph

We have to wear George Osborne's benefit cap, if it fits or not

By Tony Grew

Northern Ireland did well out of the spending round last week. The Chancellor, George Osborne, came to the Commons on Wednesday to set out how the government will spend £740bn of taxpayers' money between April 2015 and April 2016.

In effect, the coalition government has set spending limits for the first year of the next parliament.

In Whitehall, the cuts continue. Some departments have already been scaled back radically. Now, Mr Osborne is seeking an additional £11.5bn of savings from central government budgets.

The Northern Ireland Executive's resource budget will only see a tiny decrease of 0.1% in cash terms to £9.6bn, a cut of 1.8% in real terms.

The capital budget for 2015/16 will actually increase by 3.3%.

The Executive is also getting £100m of "temporary additional borrowing powers" over 2014/15 and 2015/16 to fund shared housing and education projects.

At a time when police budgets in England and Wales have been slashed by 20%, the PSNI is getting an increase in funding.

Whitehall is giving the police here an extra £31m to deal with the ongoing terrorist threat, on top of their core funding from the Executive.

However, there will be some cuts which will directly impact on people in Northern Ireland.

The biggest item of direct Westminster spending here is benefits, including pensions.

Mr Osborne announced a new 'welfare cap' that will come into force in April 2015.

He has already set a cap on how much people can get in benefits – his new policy seeks to tackle the overall budget.

The cap will set the amount of money to be spent on welfare – housing benefit, tax credits, disability benefits, and pensioner benefits will all be included, but the state pension will not.

SDLP MP Mark Durkan was wary. He asked in the Commons if Northern Ireland can have its own separate welfare cap to "take account of the higher rates of disability and long-term conditions".

No, was the answer. It is a UK welfare system and the cap will apply to spending across the country as a whole.

The welfare cap has little practical effect. Any government that breaches it by spending more on benefits than was set out every four years in the Budget won't face any penalty.

Its purpose is political. Labour now have to decide if they will stay within welfare limits set by the coalition if they win back power in 2015.

No wonder the spending review was seen as the start of a very long general election campaign.

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