Coalition ministers plan to build on the estimated £18bn welfare savings achieved over the current Spending Review period through three new reforms, chancellor George Osborne announced today.

The most significant measure outlined was a proposal to impose a four-year cap on welfare costs from April 2015, and set limits thereafter at each subsequent Budget.

Housing benefit, tax credits, disability benefits, and pensioner benefits would all be included in the measure designed to clamp down on Annual Managed Expenditure (AME), which the chancellor said had increased by a ‘staggering' 50% under the Labour government.