Labour considering regional state benefits caps

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The Labour party is considering a regional benefits cap alongside its possible cap on the basic state pension, shadow chancellor Ed Balls has announced.

However, the party added this move would not mean more differing benefit rates in different parts of the country than is currently the case.

A statement said: "Housing benefit by definition varies with housing costs at the moment - and our proposal is simply that an independent Low Pay Commission style body would recommend how to adjust the cap in London and the rest of the country based on housing costs in a similar way."

The Commission would suggest how the cap in different regions - which might mean that while the £26,000 cap imposed by the government would remain in London and the South East, it could be reduced still further to reflect different housing costs in northern regions and in the south west.

State pensions will face a cap under Labour should the party win the next election, shadow chancellor Ed Balls has said.

In an interview with the BBC, Balls said that Labour was committed to maintaining the value of the state pension but social security expenditure needed to be looked at "across the piece".

He said that the party was likely to factor pensions into its calculations for a three-year cap from 2015-16.

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