By accident or design, Britain is facing a moment of reckoning when it comes to welfare spending. The issue serves as a major fault line in Westminster, with the Tories pledging to slash the benefits bill while Andy Burnham vows there will be “no crude cuts” to the hundreds of billions of pounds spent across the UK’s web of payments, subsidies and support.
The Timms Review of Personal Independence Payments (PIP) is due to publish its full findings any day now, with the interim report in July finding that parts of that system are “not fit for purpose.” The Milburn Review, which focused on youth unemployment, pointed to a “shameful” imbalance in where public money goes, with the state spending 25 times more on benefits for young people than it does on supporting them into work.
While these reviews work their way through Whitewall, the debate is being shaped in real time by heightened media and think-tank interest. The Times has launched its own Welfare Inquiry, with a series of investigations and features highlighting the scale of the problem. Fraser Nelson is at the helm, bringing his expert blend of data analysis and storytelling. On Monday he told us of the Kafkaesque situation facing Gavin, a taxi driver from West Sussex, who told the DWP four years ago that he had recovered from surgery and was ready to return to work. “I was told point-blank that they couldn’t stop my sickness benefit until I was reassessed,” he told said. “I waited for this reassessment but it never happened.”
The financial and human cost
The absurdities of the system have even made front page news in the US, with the WSJ this week informing incredulous American readers of the UK’s uniquely generous Motability scheme which now accounts for around 1 in 7 new car registrations in the UK.
Back in Westminster, the Centre for Social Justice has launched a 250-page report, State of Dependency, revealing that just one in five additional payroll jobs created in Britain since 2014 went to British nationals. Of the 3.7m new jobs recorded between then and 2025, British nationals accounted for just 734,000. The vast majority of the increase has come since 2020, with non-EU nationals accounting for 2.5m. Over that same period, the number of people receiving out-of-work benefits rose by 2.3m.
This goes to the heart of the immigration debate, of course, and as Iain Duncan Smith says, “Britain has practised a form of ‘human quantitative easing’, importing workers to expand headline GDP while allowing millions of people already here to drift away from the labour market.”
The cost of all this, financial and human, is enormous and should qualify as a national crisis.