The truth about Britain’s “bloated welfare” system

Britain does not have a "bloated welfare" system despite George Osborne's rhetoric. The truth is that welfare spending is lower than at any time from 1979 to 1997.

Stick the term “bloated welfare” into google and a series of articles from the Daily Mail, Daily Express and Daily Telegraph dominate the screen.

George Osborne has encouraged this rhetoric with his speech to Conservative party conference and last week on the Spending Review:

“The truth – as everyone knows – is that the welfare system is failing many millions of our fellow citizens. People find themselves trapped in an incomprehensible out-of-work benefit system for their entire lifetimes, because it simply does not pay to work. This robs them of their aspirations and opportunities.

“And it costs the rest of the country a fortune. Welfare spending now accounts for one third of all public spending.”

The statistic is startling … and wrong. The Treasury’s own breakdown of total government expenditure on page 14 of the Spending Review shows “welfare” making up well under a third of public spending.

A better comparison is provided on Left Foot Forward contributor, Duncan Weldon’s excellent blog:

Using figures from the Treasury’s Public Expenditure Statistical Analysis, Weldon shows that while Britian’s welfare spending is rising, it is lower than at any time from 1979 to 1997. And don’t forget that any broad definition of welfare spending includes popular tax credits such as the child tax credit, working tax credit, and pensions credit and universal benefits including child benefit and the winter fuel payment.

These figures are not an argument for no reform. Welfare should be attached to an obligation to work for those who can, as simple as possible to administer, and – in some circumstances – better targeted. But the cut-at-all-costs approach taken by the chopper Chancellor is unnecessary and foolhardy.

UPDATE 10.54:

I’ve just been alerted to another dubious section from the same passage of George Osborne’s spending review speech. Channel 4 FactCheck (scroll down) have the goods:

“In some cases, the benefit bill of a single out-of-work family have amounted to the tax bills of 16 working families put together.”
Chancellor George Osborne, Spending Review announcement, 20 October 2010

FactCheck’s eyebrows raised when the Chancellor dropped in this little factoid in his spending review speech today. Can the benefit bill of one out of work family match that of 16 working families?

Well, yes it can – but it depends on how much those 16 families are paying in tax. You can be a working family and not actually pay any tax – and on this basis, even the average family, let alone an out of work family, claiming child benefit would receive more in benefits than those 16 working families.

Will Hadwen, rights advisor at the charity Working Families told us: “If you work 16 hours at the minimum wage (£5.93) you would be earning just under £5,000 per year and so wouldn’t be paying any tax. And working families can also get benefits, for example council tax benefit, housing benefit and working tax credit.”
So although his claim isn’t untrue, it’s not the full picture.

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46 Responses to “The truth about Britain’s “bloated welfare” system”

  1. Liz K

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  2. MD-G

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  3. Laura Turney

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  4. Andy Sutherland

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  5. noname

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm @andy_s_64

  6. Grey Murphy

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  7. AdamRamsay

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  8. Matt Jeffs

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  9. Jane Ennis

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system http://bit.ly/8ZU2p0

  10. athinkingman

    RT @adamramsay: RT @leftfootfwd: Truth about Britain's "bloated welfare" system – still lower than any time 1979-97 http://bit.ly/ahAenm

  11. James Anthony

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  12. tomneumark

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  13. Jo C

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  14. Duncan Weldon

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  15. Edward T.Rifle

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  16. Sean Morton

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  17. Bellingham Soap Co

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  18. Shlomo Pines

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  19. Alison Brown (Ali)

    RT @leftfootfwd ~ The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  20. Shamik Das

    The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97: http://is.gd/gnZR0 by @wdjstraw on @leftfootfwd

  21. Paul Crowley

    Graph of UK welfare spend in %GDP belies "bloated" claims http://j.mp/9hbjCO

  22. osfameron

    RT @ciphergoth: Graph of UK welfare spend in %GDP belies "bloated" claims http://j.mp/9hbjCO

  23. Bryony Victoria King

    RT @shamikdas: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97: http://is.gd/gnZR0 by @wdjst …

  24. RENEWAL

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  25. Parlez~me~'n~Tory

    This article http://bit.ly/df60jg claims wrongly because it ignores the words "public spending" debt interest is not public spending

  26. Duncan Weldon

    Osbonre tends to include “pensions” when talking about welfare (I assume). They are seperate things however.Pensions spending has risen from 6% of GDP in 1997 to 8% in 2010 – in line with the aging population.

  27. Ash

    Am I right in thinking these figures exclude pensions? (I think that’s the Tories’ trick, isn’t it – if you include pensions, the figures look alarmingly large because of our aging population?)

  28. Ash

    Duncan, you answered my question while I was typing it – thanks!

  29. Andy Bean

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  30. kitty cutthroat

    RT @mattlodder + @leftfootfwd The truth about Britain's "bloated welfare" system- its still lower than any time 1979-97 http://bit.ly/ahAenm

  31. jeff_h

    clicked on

    http://www.leftfootforward.org/images/2010/10/Welfare-budget.jpg

    does anyone know what ‘other’ is? seems rather large. adverts in the guardian? paying Polly Toynbee’s husband to sit on a quango?

  32. Families Against National Debt

    Duncan’s source itself claims that welfare 16% + pensions 18% make up more than a third of government expenditure in 2010. It is legitimate to treat pensions as welfare payments, though also arguable that they should be treated separately, and neither view falls into the category of ‘truth’. If all Osborne has to do is tag “and pensions” to the end of his statements, it’s not much of a sting. It might also concern Duncan that his source does not tally with the 2010 budget figures in many respects, not least total government expenditure. Whatever we call it, the higher cost of pensions is relevant to the level of expenditure the country can afford on welfare, as both transfers come from the same pot – the exchequer.

  33. Anon E Mouse

    Will – If your last comment about “cutting at all costs” is correct then why has our credit rating been reinforced in the countries favour and one of the reasons was the very budget and cuts you discuss?

    Why can’t the left just stop being so frantic and get some more concrete and important items to challenge the government on?

    Prime example was yesterday at PMQ’s. I think Ed Miliband is excellent in his exchanges with Cameron but to go on a rumour of housing benefits it just gave the PM a chance to reinforce his point and once again made Labour look like the party of unfairness.

    Labour needs to just calm down. There are 5 years before the next election which Labour will certainly lose, so there is no hurry. The election after the next one is going to take place in a very different landscape.

  34. Duncan Weldon

    Families against natioal debt,

    The figures you are quoting (16% + 18%)are a % of government spending. I am using % of GDP.

    I fully accept that pensions + welfare represent one third of government spending.

    I just think it is misleading to label that “welfare spending”, especially as welfare spending has actually fallen since 1997.

  35. Andrew Ducker

    The truth about Britain's "bloated welfare" system. Which is that it's currently costing less than at any point 1… http://bit.ly/bOlLqP

  36. Ash

    F.A.N.D. –

    The point about Osborne’s use of statistics is that he’s trying to give the impression that ‘handouts to scroungers’ (housing benefit, disability benefits, unemployment benefits etc) have shot up under Labour and therefore need to be trimmed back to sensible levels; when actually it’s payments to *pensioners* that have shot up under Labour.

    If he was saying ‘just look how the welfare bill’s shot up; clearly we need to trim payments to pensioners back to sensible levels’, you’d have a point.

  37. Families Against National Debt

    Ash – Let me say I oppose the view you attribute to Mr Osborne, that recipients of welfare are scroungers. You don’t need to be a Daily Mail caricature to want to reform welfare. Nor do I accept, given the ageing population, that pensions should be the item trimmed just because they are the item that has grown fastest. The budget is limited by 1) our collective ability/willingness to pay tax, and 2) the growing interest repayments on debt (£43 bn this year), so unless we borrow indefinitely, higher pensions mean extra pressure on (other) welfare.

    Duncan – I appreciate that the ‘truth’ and ‘wrong’ claims were Will’s, and am grateful you shared your analysis.

  38. Ma

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  39. Sam Marsden

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system http://bit.ly/8ZU2p0

  40. NewLeftProject

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  41. thesocialistway

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  42. Big Joe

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  43. Odhran Mc Alinden

    RT @AdamRamsay: RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

  44. Wendy Maddox

    RT @leftfootfwd: The truth about Britain's "bloated welfare" system – it's still lower than any time 1979-97 http://bit.ly/ahAenm

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  46. David Marsden

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