What percentage of the UK’s adult population is dependent on the welfare state?

The welfare state is a big part of British family life, with 20.3 million families receiving some kind of benefit (64% of all families), about 8.7 million of them pensioners. For 9.6 million families, benefits make up more than half of their income (30% of all families), around 5.3 million of them pensioners. The number of families receiving benefits will be between 1 and 2 million fewer now because of changes to child tax credits that mean some working families who previously got a small amount now get nothing.

How big is the problem of families on benefits where generations have never worked?

The Joseph Rowntree Foundation published a study in December testing whether there were three generations of the same family that had never worked. Despite dogged searching, researchers were unable to find such families. If they exist, they account for a minuscule fraction of workless people. Under 1% of workless households might have two generations who have never worked – about 15,000 households in the UK. Families with three such generations will therefore be even fewer.

The graphic shows this broken down. Importantly, families experiencing long-term worklessness remained committed to the value of work and preferred to be in jobs rather than on benefits. There was no evidence of “a culture of worklessness” – values, attitudes and behaviours discouraging employment and encouraging welfare dependence – in the families being passed down the generations. The long-term worklessness of parents in these families was a result of complex problems (particularly related to ill-health) associated with living in long-term and deep poverty. In an already tight labour market, multiple problems combined to place people at the back of a long queue for jobs.

For 2011-12 it is estimated that 0.8%, or £1.2bn, of total benefit expenditure was overpaid as a result of fraud. This is far lower than the figures widely believed by the public, as revealed repeatedly in opinion polls. A TUC poll recently revealed that people believe 27% of the welfare budget is claimed fraudulently.

Hard to judge, and hard to generalise. There is a lot of movement in and out of work, so many Job Seekers Allowance claims are very short. More than 80% of claimants never go near the work programme because they aren’t on the benefit for long enough. A lot are off it in under six months. For disability benefits, there are a lot more long-term claimants, of course. In 2012, 18% of working-age households were workless; in only 2% had no one ever worked. More than half of adults in households where no one has ever worked were under 25. So although the proportion of households where no one has ever worked has increased recently, it is likely to be a manifestation of high and rising young adult unemployment.

What proportion of the welfare bill goes on benefits to the unemployed? And how has this changed?

It’s rising – but we’ve seen such movements before. At 13% between 2009-10 and 2011-12, the proportion of gross domestic product devoted to benefits is at an all-time high, but this is not the result of a long-term upward trend. Levels in the 1990s to 2008-09 fluctuated between 10% and 12%. The recession resulted in a substantial increase and the overall level has not fallen since. This mirrors the recession in the early 1990s, when the proportion of GDP spent on benefits increased by slightly more at around 3 percentage points.

Between 2001/02 and 2011/12, spending on “social protection” benefits – help given to those in need or at risk of hardship – increased from £156bn to £210bn. This £54bn growth was after inflation, a rate of 34%. At an increase of £24bn, pensioner incomes made up the largest share of the change, around nine-tenths of the growth, reflecting their size within the budget. Housing benefits spending grew at the fastest rate, 62%, because of increases in the number of claimants and the average cost of the benefit. Claimant numbers rose from 3.8 million in 2002 to 5 million in 2012, while average weekly benefit increased from £52 to £87.

If unemployment benefits are reduced, do more claimants find work?

They may stop claiming – but not necessarily go to work. The Joseph Rowntree Foundation has carried out a systematic review of international research on the impact of benefit sanctions. This finds, mainly from US research, that sanctions are successful in getting people off benefits, but this may be because they are dropping out of the system altogether, rather than going into decent work. European studies show that the use of sanctions is likely to lead to worse employment outcomes (lower pay and more likely to be back on benefits) than if sanctions are not used. This is because the threat or use of sanctions makes people take lower-quality jobs than if they had been allowed to wait for a better opportunity.

How many families last year received more in benefits than the proposed government cap of £26,000?

Around 58,000 households will have their benefits reduced by the policy in 2014-15. Greater numbers are affected by other welfare changes.

What proportion of people affected by the welfare reforms are in households where someone works?

It’s not just the workless who will have to cut back. As the Institute for Fiscal Studies pointed out in January, because the proposed uprating changes apply to almost all benefits and tax credits both in-work and out-of-work households are affected.

Out of 2.8 million workless households of working age, 2.5 million will see their entitlements reduced by an average of about £215 a year in 2015-16.

Of 14.1 million working-age households with someone in work, 7 million will see their entitlements reduced, by an average of about £165 a year. Note that this figure includes 3 million families who lose only from the cuts to child benefit, at an average of about £75 a year. They also point out that other elements of the “consolidation package” have different effects, particularly for those on higher incomes (chart C)

The impacts of other changes will also be very significant for working as well as out-of-work households. Joseph Rowntree Foundation research on the council tax benefit showed that 2.4 million low-income families will pay on average £138 more in council tax in 2013-14. About 78% of the 2.4 million affected live in non-working households and pay no council tax. The average additional payment will be £132 for in-work recipients and £140 for those not working.

What is the correlation between a country’s economic performance and the size of its welfare bill?

Richer countries spend much more (as a proportion of income) on welfare than poor ones – compare Sweden and Somalia. But of course that doesn’t mean spending more on welfare makes a country richer: it mostly reflects the natural tendency of societies, as they become more prosperous, to increase social spending. Some economists argue that large welfare states, which need to be financed by equally large tax revenues, over time inhibit private-sector growth. However, the experience of the Nordic countries does show clearly that there is no necessary inconsistency between economic dynamism and a large and relatively generous welfare state.

Perhaps a better way to think about it is this: it seems likely that having no welfare state would not only make a country a very unpleasant place to live in but would inhibit economic growth, as a consequence of the inevitable social breakdown; equally a country where the state taxed away everyone’s income and redistributed it would have no incentives for economic activity. So there’s unlikely to be one “right answer”. In practice, what matters to growth is not so much the size of the welfare bill but how it is spent – what sort of incentives does it give to people to work, become trained or educated, and so on.

What does this tell us about the UK’s welfare state and its impact on growth? In fact, the overall size of the welfare bill as a proportion of GDP has been fairly stable over the past quarter century, as the chart shows.

To the extent there has been an upward trend, it’s been driven by increasing numbers of pensioners, rather than more generous benefits. Meanwhile, spending on those below pension age – working age and children – has been flat overall, rising in recessions and falling outside them. And it’s false to suggest that “benefit dependency” has been steadily increasing; the number on out-of-work benefits (unemployment benefit, incapacity benefits, and lone parents) peaked in the early 1990s and is now fully a million below that level.

This certainly doesn’t tell us that spending is at the “right” level. Indeed, most economists would agree that over time reforms – especially increasing state pension ages to reflect increasing life expectancy – are required to ensure long-term sustainability. But it does tell us that anyone who says that spending too much on welfare or benefits is the cause of the country’s economic problems, or that spending less on them is the cure, is not paying much attention to the facts.

How many large families are heavily dependent on benefits?

To quote the Economist: “Though most of them seem to end up in newspapers, in 2011 there were just 130 families in the country with 10 children claiming at least one out-of-work benefit. Only 8% of benefit claimants have three or more children. What evidence there is suggests that, on average, unemployed people have similar numbers of children to employed people … it is not clear at all that benefits are a significant incentive to have children.”

How generous are our benefits in comparison to other EU countries?

Figures from Eurostat suggest the UK spends about the same as the EU average on unemployment and disability-related benefits, although it is behind the larger economies. The UK spends 12% less a head than France and 19% less than Germany, but almost twice as much as the Czech Republic.

How many have come off disability benefits since the reforms?

Since 2008, 878,000 new employment and support allowance claims have been closed before the claimant was able to be assessed and 729,000 have been found “fit for work” by tests. Since May 2010, 527,000 employment and support allowance claims have been closed and 414,000 found “fit for work”.

Do any families get more than £100,000 a year in benefits, asGeorge Osborne has claimed?

A freedom of information request by Full Fact showed that in August 2010, there were fewer than five housing benefit claimants receiving the equivalent of £100,000 a year.

• Compiled with help from the Joseph Rowntree Foundation (www.jrf.org.uk); Full Fact (www.fullfact.org); and Jonathan Portes, director, National Institute of Economic and Social Research (www.niesr.ac.uk)

News of Margaret Thatcher‘s death this morning instantly and predictably gave rise to righteous sermons on the evils of speaking ill of her. British Labour MP Tom Watson decreed: “I hope that people on the left of politics respect a family in grief today.” Following in the footsteps of Santa Claus, Steve Hynd quickly compiled a list of all the naughty boys and girls “on the left” who dared to express criticisms of the dearly departed Prime Minister, warning that he “will continue to add to this list throughout the day”. Former Tory MP Louise Mensch, with no apparent sense of irony, invoked precepts of propriety to announce: “Pygmies of the left so predictably embarrassing yourselves, know this: not a one of your leaders will ever be globally mourned like her.”

This demand for respectful silence in the wake of a public figure’s death is not just misguided but dangerous. That one should not speak ill of the dead is arguably appropriate when a private person dies, but it is wildly inappropriate for the death of a controversial public figure, particularly one who wielded significant influence and political power. “Respecting the grief” of Thatcher’s family members is appropriate if one is friends with them or attends a wake they organize, but the protocols are fundamentally different when it comes to public discourse about the person’s life and political acts. I made this argument at length last year when Christopher Hitchens died and a speak-no-ill rule about him was instantly imposed (a rule he, more than anyone, viciously violated), and I won’t repeat that argument today; those interested can read my reasoning here.

But the key point is this: those who admire the deceased public figure (and their politics) aren’t silent at all. They are aggressively exploiting the emotions generated by the person’s death to create hagiography. Typifying these highly dubious claims about Thatcher was this (appropriately diplomatic) statement from President Obama: “The world has lost one of the great champions of freedom and liberty, and America has lost a true friend.” Those gushing depictions can be quite consequential, as it was for the week-long tidal wave of unbroken reverence that was heaped on Ronald Reagan upon his death, an episode that to this day shapes how Americans view him and the political ideas he symbolized. Demanding that no criticisms be voiced to counter that hagiography is to enable false history and a propagandistic whitewashing of bad acts, distortions that become quickly ossified and then endure by virtue of no opposition and the powerful emotions created by death. When a political leader dies, it is irresponsible in the extreme to demand that only praise be permitted but not criticisms.

Whatever else may be true of her, Thatcher engaged in incredibly consequential acts that affected millions of people around the world. She played a key role not only in bringing about the first Gulf War but also using her influence to publicly advocate for the 2003 attack on Iraq. She denounced Nelson Mandela and his ANC as “terrorists”, something even David Cameron ultimately admitted was wrong. She was a steadfast friend to brutal tyrants such as Augusto Pinochet, Saddam Hussein andIndonesian dictator General Suharto (“One of our very best and most valuable friends”). And as my Guardian colleague Seumas Milne detailed last year, “across Britain Thatcher is still hated for the damage she inflicted – and for her political legacy of rampant inequality and greed, privatisation and social breakdown.”

To demand that all of that be ignored in the face of one-sided requiems to her nobility and greatness is a bit bullying and tyrannical, not to mention warped. As David Wearing put it this morning in satirizing these speak-no-ill-of-the-deceased moralists: “People praising Thatcher’s legacy should show some respect for her victims. Tasteless.” Tellingly, few people have trouble understanding the need for balanced commentary when the political leaders disliked by the west pass away. Here, for instance, was what the Guardian reported upon the death last month of Hugo Chavez:

To the millions who detested him as a thug and charlatan, it will be occasion to bid, vocally or discreetly, good riddance.”

Nobody, at least that I know of, objected to that observation on the ground that it was disrespectful to the ability of the Chavez family to mourn in peace. Any such objections would have been invalid. It was perfectly justified to note that, particularly as the Guardian also explained that “to the millions who revered him – a third of the country, according to some polls – a messiah has fallen, and their grief will be visceral.” Chavez was indeed a divisive and controversial figure, and it would have been reckless to conceal that fact out of some misplaced deference to the grief of his family and supporters. He was a political and historical figure and the need to accurately portray his legacy and prevent misleading hagiography easily outweighed precepts of death etiquette that prevail when a private person dies.

Exactly the same is true of Thatcher. There’s something distinctively creepy – in a Roman sort of way – about this mandated ritual that our political leaders must be heralded and consecrated as saints upon death. This is accomplished by this baseless moral precept that it is gauche or worse to balance the gushing praise for them upon death with valid criticisms. There is absolutely nothing wrong with loathing Margaret Thatcher or any other person with political influence and power based upon perceived bad acts, and that doesn’t change simply because they die. If anything, it becomes more compelling to commemorate those bad acts upon death as the only antidote against a society erecting a false and jingoistically self-serving history.

http://www.guardian.co.uk/commentisfree/2013/apr/08/margaret-thatcher-death-etiquette?CMP=EMCNEWEML6619I2