Osborne says controversial welfare cap will be decided in the next budget

Speaking to the Treasury Select Committee in the House of Commons about his latest spending round, chancellor George Osborne has said that the controversial cap on welfare spending will be determined in the next budget.

Breaching the cap would not be illegal, he said, but the government would be held to account by the independent Office for Budget Responsibility (OBR) and be required to explain publicly why they have done so. Governments won’t be able to use cyclical excuses, he added, as he’s removed most of the cyclical elements like job seeker’s allowance.

The seven day wait for jobseeker's allowance will come into effect next year. Housing benefits will also be subject to the seven day period. Those being made redundant will be able to bypass the waiting period if they have been working and off jobseeker's allowance for less than six months (up from three months) in order to remove disincentives to take on temporary jobs. The chancellor confirmed that armed forces personnel will be included in the seven day waiting period.

The introduction of a waiting period was one of the more controversial proposals in the spending round, with some suggesting that a delay in benefits will drive more people to food banks. Osborne put the increased use in food banks down to growing awareness of their existence, and pointed to a number of other countries with waiting periods like Sweden and New Zealand.

Osborne also let slip that his Treasury head of spending Sharon White is married to OBR boss Robert Chote.

When asked what would make him cut more benefits, he avoided answering directly, saying he was “intending on staying within the welfare spending cap”.

Andrew Tyrie said Osborne had “delivered what can only be described as a successful review”, keeping within the envelope set. However, it was noted on a number of occasions the tension between cuts to spending and taxes. Osborne said he was not in favour of deficit-funded tax cuts, saying that cuts to taxes must be sustainable.

Osborne also told the committee that “too much is made of ringfencing the foreign aid budget” and was “proud” of his decision to do so, and confirmed that Philip Hammond and Vince Cable attempted to push army medical training and medical research into the ringfenced Department of Health budget.

Osborne continues to answer questions from the Committee, which you can watch live here.