Economy 21 March 2013 Osborne's welfare super-cap is a frightening prospect for families The new limit on "Annually Managed Expenditure" could mean even less support for the unemployed and the working poor. Sign up for our weekly email * Print HTML The Budget was nothing but underwhelming for low income families: cancelling the rise in fuel duty and a penny off the price of a pint of beer do little to offset the increase in living costs that low-income families have had to contend with in recent years. Gains from the much-vaunted rise in the personal allowance all but evaporate for low-income families, who simply see their benefits reduced as their earned income increases. And as many commentators pointed out earlier this week, the winners from the new childcare scheme will be those some way up the income scale. But perhaps the biggest worry for low income families is not the lack of policies that would help them today, but the threat of what might hurt them still further tomorrow. Tucked away in the Budget statement, the Chancellor made some seemingly technical comments about reforming the spending framework, and the need to put a limit on demand-led Annually Managed Expenditure (AME) in the future. Critically, a large part of AME is spending on social security, which is supposed to protect us all in times of need. But putting a nominal limit on AME would mean that as these needs increase – in times of rising unemployment, for example, or as a result of growing housing costs – there would be no commensurate rise in social security provision. Consequently, benefits would either need to be spread more thinly, or restricted in some other way. The Chancellor presented the idea of a limit on AME as necessary to rein in a run-away social security budget. However, as usual, the figures he provided show only part of the picture. While the Budget document speaks of "welfare spending rising in real terms by 20% in the decade before the financial crisis", it fails to mention that social security spending as a percentage of GDP was broadly static during this period. The only glimmer of hope, perhaps, was the Chancellor's rather cryptic comment that he would establish a limit for AME "that allows the automatic stabilisers to operate". As the International Monetary Fund recently pointed out, social security payments form a critical part of these stabilisers. Clarification from the Chancellor as to how he will square this fact with a limit on AME is clearly necessary. Of course, the idea of disconnecting state support from assessed need is not a new one for this government: the overall cap on benefits, which will be rolled out from April this year is a perfect example of this model. But the idea of a 'super-cap' on total social security in the future is a genuinely frightening prospect for families already struggling to get by with diminished support from state. › Osborne almost choked halfway through his speech. Let’s hope the rest of us don't do the same. The balcony of a residential development in the London borough of Tower Hamlets. Photograph: Getty Images. Lindsay Judge is senior policy and research officer for the Child Poverty Action Group. Subscribe from just £1 per issue More Related articles Will Storm Doris affect turnout in the Stoke-on-Trent and Copeland by-elections? What does it mean for Ukip if it loses in Stoke-on-Trent Central? What does François Bayrou's endorsement of Emmanuel Macron mean for the French presidential race?