Does the UK spend too much on welfare benefits?

The modern welfare state and benefits have their roots almost 500 years ago in the form of Poor Laws. These laws were made to keep the homeless population off the streets and make them work in places like factories. However even after these measures had been put in place, in the late 1800’s it was proven that up to a third of the population still lived below the poverty line. This prompted the Beverage Report (1942) which found out that society suffered from the five Giant Evils. The report said that these were squalor, ignorance, want, idleness and disease and suggested benefits as a method to combat and eradicate these evils from society.

Benefits, as we know them today, were introduced after the First World War to support poorer people as a short term measure until they found work. These benefits, especially unemployment benefits, were not designed as a long term investment and each person receiving them would be reviewed after 6 months. Another reason for the introduction of benefits in the UK was to stop mass unrest because of the recent war. Benefits also helped families cope with separation and deaths due to the conflict.

Benefits allowed people to be lifted out of absolute poverty and gave them a fighting chance to compete with the privileged classes. By and large this has worked as desired but as any system it had its failures. There is a strong perception that the benefit system is widely abused, and that it promotes laziness which manifests into a way of life among generations who depend on benefits and never ever venture out to work. This is grossly unfair for the majority of families who work hard to achieve greater living standards.

The UK Government has to re-look at the current level of spending not by choice but more so due to difficult economic conditions. Many measures have been introduced by the coalition government to pull back run away expenses for example; people are enforced with an under occupancy penalty which has been labelled as “Bedroom Tax” (If there are more bedrooms than occupants in a council house, the residents are fined) by the opposition, along with tougher checks on people claiming unemployment, disability benefits.

The UK government hopes that by radical changes, benefit system will reflect the demands of modern age but also not dilute the core principles of welfare state (i.e. to support under privileged sections of the society). Benefits is an emotive subject to the wider public and is exploited by all major political forces in the country as a political instrument for capturing larger percentage of votes. In my view benefit system is much more that pure politics; it’s fundamentally an economic issue than political (i.e. as a nation can we afford such unsustainable expense?). Any expense that has no control or oversight will be abused no matter how noble the underlining desire is!
It is predicted that the UK will spend 16% of the budget on welfare in 2015; this is almost 120 billion pounds spent annually on welfare.

Out of the total almost half (46.32%) of the welfare expense is spent on Pension and rest constitute what we loosely categorise a “Benefits” in the public domain. If we analyse further under “Benefits” we see a big chunk of expense is Jobseekers allowance. Our focus should be towards modernising Pension funding and increase employment through encouraging Private enterprise. Political parties in government are tackling the smaller and less funded benefits such as Carer’s Allowances, Financial Assistance Schemes and Incapacity Benefit because they are easiest to cut and can demonstrate to the wider public that the government is tough on benefit frauds, thereby creating a positive political image rather than deal with difficult and more complex policy issues of Pension restructuring and employment generation.

In conclusion if we manage to tackle the complex subject of Pension funding and create an environment of higher employment then I don’t think we need to really push for changes to benefits that are genuinely supporting weaker sections of the society. With that assessment I agree that we cannot afford the current level of benefit expense and that we are spending too much on benefits, but the solution should be based on sound economic footing and not a political show to gain more votes.

contributed by Chinmay Joglekar