Autumn Statement: Welfare spending cap to start in 2015

Housing benefit will be included in the spending cap

A cap on total government welfare spending will start in 2015, Chancellor George Osborne has said.

The precise limit will be set in the spring of 2014, and the cap will be imposed a year later.

He said the limit on total welfare spending would be set by the chancellor at the beginning of each parliament, and MPs would be asked to support it.

If the limit was breached, the chancellor would have to explain why, and a vote would be held in Parliament.

Mr Osborne explained that benefits which fluctuate with the economy, such as Jobseeker's Allowance, would be excluded from the cap.

So too will spending on the basic state pension.

"All other benefits, from tax credits to income support, to the vast majority of housing benefit, will be included in the cap," he told MPs.

In 2014, the government is expected to spend £112bn on welfare payments, rising to £113.1bn in 2015, and £117.9bn in 2016.

"The principle is clear," said Mr Osborne. "The government has a responsibility to taxpayers to control their spending on welfare; and Parliament has a responsibility to the country to hold the government to account for it."

Labour has already said it will introduce a three-year cap on welfare spending, if elected in 2015. That cap would also include housing benefit.

'Culture of worklessness'

The chancellor also announced new rules for young people claiming benefits.

Starting in specific areas, anyone aged between 18 and 21 will be required to accept training in Maths and English if they do not already have basic level two qualifications.

They will need to study for 16 hours a week, alongside their job searching.

If they refuse, they will not be able to claim benefit payments.

If they are still out of work after six months, they will then be given three options: take work experience, accept a traineeship, or do community work.

"A culture of worklessness becomes entrenched when young people can leave school and go straight onto the dole, with nothing expected in return," Mr Osborne told MPs.

"That option is coming to an end in our welfare system," he said.

The plan is part of the government's Help to Work scheme, announced at the Conservative Party conference in September.

Under the scheme, anyone with illiteracy or drug problems will be given "intensive" support.

However those out of work for longer than three years will need to do some form of useful work, such as rubbish clearance, to claim their benefits.