Osborne's new spending cap points to more welfare cuts

The Chancellor's plan to limit "Annually Managed Expenditure" shows how a Tory government would seek to further curb benefit spending.

George Osborne has already capped benefits for out-of-work families at £26,000 a year, now he's proposing to go further and introduce a cap on total welfare spending. One of the most significant announcements in the Budget was that the Chancellor is planning "a new limit" on what's called "Annually Managed Expenditure" (AME). This is the area of spending concerned with non-departmental items such as welfare payments, debt interest and EU budget contributions (which account for around 50 per cent of all state spending). It is the automatic rise in the first two, in particular, that has made it so hard for the government to stick to its deficit reduction targets. Osborne is now proposing to end this fiscal irresponsibility (as he sees it) by introducing a limit on "a significant proportion" of this expenditure. 

In practice, this will almost certainly mean even greater welfare cuts. Although Osborne said that the new cap would be set out in a way "that allows the automatic stabilisers to operate", he added that it would "bring real control to areas of public spending that had been out of control." And since the government has less influence over debt interest payments (the markets decide those) and EU budget contributions (the EU 27 decide those) than it does over welfare spending, it is benefits that will bear the brunt of the squeeze.

The Treasury is briefing that the new cap will not affect the government's plan to avoid further welfare cuts in this summer's 2015-16 Spending Review (a victory for the Lib Dems) but it is a signal that a future Conservative government (or a future Tory-led coalition) would seek to further curb welfare spending. What form could this take? Osborne is likely to extend the 1 per cent cap on working-age benefit increases beyond 2015-16 and to look again at measures such as the abolition of housing benefit for the under-25s and the restriction of child benefit for families with more than two children.

Other policies trailed by David Cameron in his welfare speech last summer included:

- Preventing teenagers from claiming benefits as soon as they leave school.

- Paying benefits in kind (like free school meals), rather than in cash.

- Reducing benefit levels for the long-term unemployed.

- A lower housing benefit cap. Cameron said that the current limit of £20,000 was still too high. 

I expect some or all of these are under consideration for the next Conservative manifesto. 

A young boy plays football in a run down street with boarded up houses in the Govan area of Glasgow, Scotland. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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7 problems with the Snooper’s Charter, according to the experts

In short: it was written by people who "do not know how the internet works".

A group of representatives from the UK Internet Service Provider’s Association (ISPA) headed to the Home Office on Tuesday to point out a long list of problems they had with the proposed Investigatory Powers Bill (that’s Snooper’s Charter to you and me). Below are simplified summaries of their main points, taken from the written evidence submitted by Adrian Kennard, of Andrews and Arnold, a small ISP, to the department after the meeting. 

The crucial thing to note is that these people know what they're talking about - the run the providers which would need to completely change their practices to comply with the bill if it passed into law. And their objections aren't based on cost or fiddliness - they're about how unworkable many of the bill's stipulations actually are. 

1. The types of records the government wants collected aren’t that useful

The IP Bill places a lot of emphasis on “Internet Connection Records”; i.e. a list of domains you’ve visited, but not the specific pages visited or messages sent.

But in an age of apps and social media, where we view vast amounts of information through single domains like Twitter or Facebook, this information might not even help investigators much, as connections can last for days, or even months. Kennard gives the example of a missing girl, used as a hypothetical case by the security services to argue for greater powers:

 "If the mobile provider was even able to tell that she had used twitter at all (which is not as easy as it sounds), it would show that the phone had been connected to twitter 24 hours a day, and probably Facebook as well… this emotive example is seriously flawed”

And these connection records are only going to get less relevant over time - an increasing number of websites including Facebook and Google encrypt their website under "https", which would make finding the name of the website visited far more difficult.

2. …but they’re still a massive invasion of privacy

Even though these records may be useless when someone needs to be found or monitored, the retention of Internet Connection Records (IRCs) is still very invasive – and can actually yield more information than call records, which Theresa May has repeatedly claimed are the non-digital equivalent of ICRs. 

Kennard notes: “[These records] can be used to profile them and identify preferences, political views, sexual orientation, spending habits and much more. It is useful to criminals as it would easily confirm the bank used, and the time people leave the house, and so on”. 

This information might not help find a missing girl, but could build a profile of her which could be used by criminals, or for over-invasive state surveillance. 

3. "Internet Connection Records" aren’t actually a thing

The concept of a list of domain names visited by a user referred to in the bill is actually a new term, derived from “Call Data Record”. Compiling them is possible, but won't be an easy or automatic process.

Again, this strongly implies that those writing the bill are using their knowledge of telecommunications surveillance, not internet era-appropriate information. Kennard calls for the term to be removed, or at least its “vague and nondescript nature” made clear in the bill.

4. The surveillance won’t be consistent and could be easy to dodge

In its meeting with the ISPA, the Home Office implied that smaller Internet service providers won't be forced to collect these ICR records, as it would use up a lot of their resources. But this means those seeking to avoid surveillance could simply move over to a smaller provider.

5. Conservative spin is dictating the way we view the bill 

May and the Home Office are keen for us to see the surveillance in the bill as passive: internet service providers must simply log the domains we visit, which will be looked at in the event that we are the subject of an investigation. But as Kennard notes, “I am quite sure the same argument would not work if, for example, the law required a camera in every room in your house”. This is a vast new power the government is asking for – we shouldn’t allow it to play it down.

6. The bill would allow our devices to be bugged

Or, in the jargon, used in the draft bill, subjected to “equipment interference”. This could include surveillance of everything on a phone or laptop, or even turning on its camera or webcam to watch someone. The bill actually calls for “bulk equipment interference” – when surely, as Kennard notes, “this power…should only be targeted at the most serious of criminal suspects" at most.

7. The ability to bug devices would make them less secure

Devices can only be subject to “equipment interference” if they have existing vulnerabilities, which could also be exploited by criminals and hackers. If security services know about these vulnerabilities, they should tell the manufacturer about them. As Kennard writes, allowing equipment interference "encourages the intelligence services to keep vulnerabilities secret” so they don't lose surveillance methods. Meanwhile, though, they're laying the population open to hacks from cyber criminals. 


So there you have it  – a compelling soup of misused and made up terms, and ethically concerning new powers. Great stuff. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.