OBR: Welfare spending to rise by £700mn
By politics.co.uk staff
Increases in welfare spending are set to outstrip the announced savings announced in the Budget, according to the independent Office of Budget Responsibility (OBR).
Spending on jobseekers’ allowance payments has been revised up by £100 million next year, with further £200 million increases for every remaining year of this parliament up to 2015 for a total of £700 million of rises.
Liam Byrne, shadow chief secretary to the Treasury, used the figures to turn his fire on the Lib Dems – currently gathered in Liverpool for their conference.
“Nick Clegg might have changed his mind on cuts, but the Treasury’s watchdog hasn’t,” he said.
“Today, the (OBR), which George Osborne created, has revealed that cutting too much too soon will actually cost £700 million in extra dole payments, and countless more in human misery.
“The Lib Dems’ now need to get out of denial. They’re supporting a Tory economic plan that’s a jobs killer, with bigger dole bills and bigger public spending cuts to pay for them.”
However, the direct effects of the emergency Budget may offset the increase figure by £300 million, and, crucially, that the revision does not include the effects of the comprehensive spending review to be announced on October 20th.
The work and pensions secretary, Iain Duncan Smith said in a committee hearing last week that he did not recognise the figure of £4 billion extra cuts that media reports suggested after the BBC interview with Mr Osborne.
His welfare reform programme is expected to eventually cost the government less money, but analysts expect a marked increase in short-term spending at the Department of Work and Pensions (DWP).
