Next week the Government plans to bring forward a new Bill on welfare reform – the latest salvo in the Tories’ ongoing war of attrition on our welfare state and the principles that underpin it.
Softening up the ground for this next round of cuts, which will go further and deeper than anything we’ve seen so far, was a column written jointly by George Osborne and Iain Duncan Smith and published in the Sunday Times a few weeks ago.
The piece, which reads like a greatest hits compilation of clichéd Tory platitudes on welfare spending, was so shot through with errors, misleading implications and flat-out lies that it set the tone for the most ill-informed debate in recent memory.
So in the interest of setting the record straight, I’ve picked out my top eight tall Tory tales (there are many more than eight, but as space is limited I’ve kept myself to the worst offenders) and put them together with the actual facts. Without a willing handmaiden in the Murdoch press empire to help me, I’m relying on you to spread the word:
Lie number one:
“This country accounts for 7% of all welfare spending in the world, although we have just 1% of its population and produce 4% of its GDP.”
Even if you accept that these figures are accurate (and there’s no reason why you should – Osborne and Duncan Smith did not provide a source and I haven’t been able to find one) the implication – that we are spending more than we should because our welfare budget is out of proportion to our share of the global population – is ridiculous because it does not compare like with like.
To say that we spend more on welfare per head than, say, Somalia or Zimbabwe tells you nothing more than the fact that we have an advanced, industrialised economy, a domestic tax base, an established democracy and a modern welfare state, which many countries do not.
A much more valuable comparison would be between the UK and other industrialised democracies, for example within Europe. A comparison with the rest of Europe puts us below the average in terms of welfare spending as a proportion of GDP.
Lie number two:
Under Labour “Britain’s welfare bill was fast becoming completely unsustainable.”
Taking as a measure of “sustainability” the amount we spend on social security as a proportion of GDP (the most widely used measure), welfare spending stayed virtually flat during Labour’s time in office. Between 1998-99 and 2008-09 welfare spending represented on average 10.7% of GDP, never deviating more than 0.2% from this figure in any given year.
When the global financial crisis hit the proportion rose to 13% - a significant rise which nonetheless was neither surprising nor particularly concerning, given the historic tendency for welfare spending to rise during a depressed economy and fall back down to normal levels with the return of economic growth.
It’s also a bit rich for the Tories to preach about an increasing welfare budget when the bulk of social security expenditure in the UK goes to pensioners, an area where the Tories have increased spending, not cut it.
Lie number three:
“Not that any of this debt-fuelled largesse improved lives.”
Maybe not the lives of anybody the authors knew, but the truth is that, largely thanks to the support Labour provided to low-income working families through tax credits (which Osborne is about to gut), child poverty fell by a third under Labour – equivalent to more than a million children lifted out of poverty.
IDS may be busy redefining poverty so he can pretend it doesn’t exist, but I think most people can still understand that poverty is real, that it isn’t a good thing and that a person moving out of poverty would normally consider the change an improvement in their life.
Lie number four:
“The welfare system we inherited in 2010 trapped people in dependency and actively discouraged claimants from seeking work. All too often, those who worked hard and did the right thing were punished – while those who did the wrong thing were rewarded.”
Presumably what the authors mean by “doing the right thing” is working. But despite their best efforts to draw an artificial dividing line between “work” and “welfare”, the reality is that most people of working age who claim some kind of benefit do work. For example, more than two thirds of people claiming tax credits are employed, and tax credits account for around 50% of all spending on working-age welfare. Meanwhile, benefits specifically for people who are out of work, like Jobseeker’s Allowance and Income Support, make up just 3% of such spending.
The fact of the matter is that when governments fail – as the Tories have done – to tackle the root causes of working peoples’ need for welfare support, like low pay and high rents, the number of working people relying on benefits increases. For example, the proportion of housing benefit claimants who are employed has doubled since the Tories took office in 2010.
Lie number five:
“The new benefit cap of £26,000 a year means that no household can receive more in out-of-work benefits than the average working family earns, a simple matter of fairness.”
The Tories’ cap has nothing to do with fairness, as demonstrated by the fact that their new Bill abolishes the cap’s link with average earnings and gives Ministers carte blanche to lower the cap arbitrarily, at any time and for any reason.
Their cap also takes an across-the-board approach, affecting many more people who aren’t able to work – including people with disabilities, single mothers with young children and people with full-time caring responsibilities for sick or severely disabled relatives – than people who are.
Lie number six:
“We also took action to cap the rise in benefits so it was in line with the incomes of those in work.”
They did no such thing. Since 1980, the main out-of-work benefits have risen in line with prices, rather than earnings. So Jobseeker’s Allowance fell from being worth a fifth of average earnings in 1980 to a tenth in 2010.
Lie number seven:
“In 1980, working age welfare accounted for 8% of all public spending. In 1990, when Margaret Thatcher left office, it was still under 10%. But by 2010 it had risen to nearly 13% of public spending.”
Similar to lie number two, but since the lie is repeated (or, to put it more charitably, the highly selective and misleading half-truth) the truth might as well be repeated too. As noted, welfare reform stayed virtually flat under Labour until a sudden increase was brought about as a result of a recession – just as had happened in the early 1990s under John Major’s Government.
Lie number eight:
“This government was elected with a mandate to implement further savings from the £220 billion welfare budget.”
They most certainly were not. The Tories ran on a manifesto promising £12 billion worth of welfare cuts, a figure which no-one took seriously in large part because they failed to specify where the savings would come from.
Happy myth-busting, readers!