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Spending Review: Osborne saves state pension from welfare cap

Laura Miller
Written By:
Laura Miller

George Osborne has said he will cap the country’s welfare budget each year for the next four years from April 2015 – but the state pension will not be included.

Announcing his Comprehensive Spending Review to parliament today, the Chancellor said he was saving £18bn a year as a result of his changes to the welfare system.

Further welfare changes announced today include a seven day wait before those out of work can claim benefits, and a requirement for them to attend a job centre once a week, up from once a fortnight.

Claimants will also have to learn English and benefit eligibility will be linked to signing up to a new job search site.

Osborne said: “The something for nothing culture of welfare will end.” 

The Chancellor also said he will fund a freeze in council tax for the next two years from April 2014, and that veterans families will be supported using fines raised from those who were involved in the Libor scandal.

He announced £50bn of capital investment for 2015-16, and said £100bn of infrastructure projects would be announced tomorrow.

However among the cuts was an end to automatic progression pay in the public sector – and public sector pay rises were limited to 1% in 2015-16.

The Chancellor also slashed spending across government departments.

Osborne – who had previously stated he needed to find £11.5bn in savings for this Spending Review – said he had already saved £5bn from efficiency savings and would save a further £5bn from the same in 2015-16.

The key welfare points mentioned today: 

:: Jobseekers face new requirements to get benefits. Non-English speaking claimants must learn the language while New Upfront Work Search system will require claimants to provide a CV, register for online job search and start looking for work before getting benefits.

:: Lone parents of three and four-year-olds to be required to attend job centres regularly and prepare for work.

:: Payment of winter fuel payments for people living abroad to be linked to a ‘temperature test’ from Autumn 2015 to ensure pensioners in hot countries do not get it.

:: Three new welfare reforms to include ‘Welfare Cap’ set in Budget statement annually from April 2015 for four years though state pension not included.