"Welfare is a luxury we can't afford"

The front page newspaper headlines on March 27th, 1998 (following the UK government's announcement of welfare reforms) were as follows:

"WELFARE WAR ON WORKSHY" (Daily Mail)
"THOU SHALT NOT SHIRK" (The Express)
"BLAIR IN WELFARE WAR ON THE IDLE" (Daily Telegraph)
"SHAKE-UP IN WELFARE HITS THE WORKSHY" (The Times)

Blaming "spiralling" welfare costs on the "workshy" is a common theme of newspapers such as the Daily Mail. It's usually accompanied by the fallacy that welfare is the single biggest drain on the economy.

Fortunately, there are some exceptions to this position in the media. For example, Larry Elliot, writing in the Guardian (19/1/98):

"..ministers should stop conniving in the fallacy that the welfare state is in a terminal crisis when it palpably is not...What is not legitimate is to pretend that welfare is a luxury Britain cannot afford".

Welfare spending isn't spiralling out of control. As Elliot pointed out [in 1998], during the previous 18 years welfare spending rose, relative to GDP, by only 2.5% – a small amount, given an ageing population, two recessions and the increased demands for healthcare of the chronically stressed and overworked.

The annual cost of welfare in Britain is around £100 billion. The tabloid media blame this high cost on the "workshy", but most of it goes on contribution-based pensions:

Annual cost (£ billions)
• Job Seekers Allowance: 2.3
• Housing benefit: 4.1
• Income Support: 6.5
• Child benefit: 8.8
• Benefits for disabled: 10.8
• Contribution-based pensions: 42.1

(Smaller costs include winter fuel payments for the elderly, at £1.7bn, etc. Source: Department for Work and Pensions, 2003)

Compare the above welfare costs to other big expenditures >

The main additions to recent welfare spending have been benefits to people with jobs (which have been given the label "tax credits"). That's because wages at the low end of the market have fallen in real terms over the last 25 years. The "competitive labour market" has kept wages so low that many can't survive without state-funded supplements to their wages.

FALLACY: Jobs cure poverty >
FALLACY: Living standards are increasing for everyone >