Benefits cap change 'may lead to reduced rates in Wales'

Opposition parties said families are already being hit hard by benefit cuts

A reduced benefits cap outside London could lead to lower benefit rates in Wales, Plaid Cymru has claimed.

Chancellor George Osborne is expected to use his Budget to cut the £26,000 household limit of working age benefits to £20,000, and to £23,000 in London.

Plaid Cymru MP Jonathan Edwards claimed the same "rationale" could be used to set different regional benefit rates.

Welsh Secretary Stephen Crabb said there was no reason to believe Wales would be "negatively impacted".

'Unfair'

Changing the benefits cap is thought to be one of the ways in which the Conservatives will try to cut the welfare bill by £12bn.

Mr Edwards warned that changes could be unfair to people who had paid the same national insurance rate across the UK.

"The rationale used for the lower benefits cap means it could be used to introduce geographical benefits," he said.

"If you accept that, you could end up with the situation where people in Wales receive less than other parts of the UK."

'Right thing'

A total of 715 households had their benefits capped in Wales in February, according to figures from the Department for Work and Pensions.

Mr Crabb has defended the principle of a benefits cap, telling walesonline.co.uk that evidence showed people affected were up to 40% more likely to look to go back into work than those who were not.

"It is the right thing to do," he added.

"There's no reason at all to believe that Wales will be negatively impacted."

Labour has warned that the chancellor's expected cuts to tax credits could hit more than 200,000 families in Wales.

Shadow Welsh Secretary Owen Smith said the payments were helping ordinary families "to make ends meet".