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Maternity pay could be slashed as part of the cap on welfare spending, Cameron confirms

Maternity and paternity pay could be cut in the future, as these payments have been included in the Government's new benefits cap announced in the Autumn Statement, prime minister David Cameron has confirmed.

Only the state pension will be outside the new limit, which is designed to control welfare spending.

The cap will require the Government to spend only a set amount on benefits during its term in Parliament.

Pensioners and those on jobseekers' allowance will be exempt from the cap, but Cameron told MPs that people receiving maternity and paternity pay would be included.

Cameron confirmed maternity and paternity pay would be included in the cap when he was asked the question earlier this week by Labour MP Fiona O'Donnell.

She asked Cameron: "While the Prime Minister is trying to come over all family friendly can you confirm if maternity and paternity pay will be included in the benefits cap announced in the Autumn Statement?"

Cameron replied: "As the Chancellor announced at the time what is out of the benefit cap is the basic state pension, I think that's important.

"On all other welfare spending what we have to do is make sure we are distributing properly between the different sorts of welfare."

Chancellor George Osborne said that a cap on benefits spending would start from 2015, with the precise limit being set out in spring next year. The limit would then be set at the beginning of each Parliament and if breached, the Chancellor at the time will have to explain it and allow MPs a vote.

Belinda Phipps, chief executive of the parenting charity NCT, said: "Following the good news about shared paternity leave, it's hugely disappointing that maternity and paternity pay will fall below the cost of living.

"This real terms cut will make it harder for parents to buy the essentials that their new baby needs, may put strain on a couple's relationship and force parents back to work earlier than they planned."