With the Conservative Party unveiling a new ad campaign in marginal seats, which basically divides voters into hard-working 'strivers' and stay-at-home 'shirkers', and with Lib Dem leader Nick Clegg launching an attack on universal benefits, it seems the perfect time to debunk 10 key myths about the UK's welfare budget and, specifically, 'out of work benefits'.
(Yesterday, you may have seen me tackling some of these falsehoods on BBC1's Sunday Politics - if not, you can watch my debate with Tory MP Chris Skidmore on the iPlayer; scroll forward to 29mins40secs in...)
Here are the 10 things about welfare that they - Tories, Lib Dems, some New Labour figures, the centre-right press and the CBI - don't tell you:
1) Myth: 'THE 1% RISE IN BENEFITS IS FAIR BECAUSE IT HITS SHIRKERS, NOT STRIVERS'
Fact: According to the Resolution Foundation, "far from hitting only the out of work, 60% of the value of the £3.7 billion cut would fall on in-work households". Why? Because the 1% rise - which equates to a real-terms cut - affects universal benefits like child benefit and tax credits like child tax credit.
Also, the benefit loss for a low to middle-income household is about twice the size of the personal allowance gain (the same allowance gain, incidentally, that the Tories have tried to use to deflect attention from the 1% squeeze).
2) Myth: 'SPENDING ON OUT OF WORK BENEFITS IS OUT OF CONTROL'
Fact: First, according to the DWP's own figures, the majority of all welfare spending is on pensioners - 53% - with out of work benefits accounting for less than a quarter of the welfare budget.
Second, on average, between 2000 and 2010, welfare spending grew annually, in real terms, by 1.75% - compared to 5.5% in the 1950s and 1960s, and 3% in the 1980s (under Margaret Thatcher).
Third, benefit spending in 2011-12 accounted for 10.4% of GDP, lower than under Margaret Thatcher in the mid-80s (11%) and under John Major in the mid-1990s (12%). (There are also a million fewer people on out of work benefits now than there were in the mid-1990s, off the back of the previous recession.)
Fourth, it may surprise you to discover that benefit spending as a share of GDP fell during the first 11 years of the last Labour government; it only began to rise in 2008, after the financial crash, as hundreds of thousands of Britons found themselves out of work through no fault of their own.
(They key point here is to distinguish between benefit spending figures presented in scary, cash terms and those presented - much more accurately - as a proportion of a nation's GDP.)
3) Myth: 'OUT OF WORK BENEFITS HAVE RISEN MORE THAN AVERAGE EARNINGS'
Fact: While the chancellor George Osborne was correct to point out, in his Autumn Statement, that "average earnings have risen by around 10% since 2007" but "out of work benefits have gone up by around 20%" he chose a narrow, self-serving time period, i.e. the past five years. Over the past 30 years, wages have outstripped benefits.
As economist Jonathan Portes, head of the National Institute for Economic and Social Research (NIESR), pointed out: "In 1979, unemployment benefit (the predecessor to Jobseekers' Allowance) was about 22% of average weekly earnings; today it's about 15%, a relative decline of about a third. What's going on? Simple: JSA has been indexed to inflation. In normal times, earnings rise faster than prices..."
But as Osborne knows, we are not living in 'normal times', partly thanks to his growth-killing austerity measures...
On a side note, Jobseekers' Allowance is currently £71 a week, or £10 a day. Could Osborne, or any other Tory minister, live on £10 a day? Could you?
4) Myth: 'WORK IS THE BEST ROUTE OUT OF POVERTY'
Fact: The majority of children and working-age adults in poverty in the UK live in working, not workless, households. That's 6.1million people - 2million children and 4.1million adults - a million more people than are living in poverty in workless households. Low pay is the biggest cause of poverty in this country - a fifth of British workers are paid less than the 'living wage'. The national minimum wage is now worth less in real terms than it did in 2004.
5) Myth: 'THERE ARE LOTS OF OUT OF WORK HOUSEHOLDS WITH BIG FAMILIES'
Fact: Families with more than five children account for 1% of out of work benefit claims; families with more than three children account for less than 10% of claims.
6) Myth: 'THE WELFARE STATE IS BEING UNDERMINED BY AN INTERGENERATIONAL CULTURE OF WORKLESSNESS'
Fact: Despite repeated Tory references to "three generations of worklessness" (Iain Duncan Smith) and "four generations of families where no one has ever had a job" (Chris Grayling), this whole "culture of worklessness" and inter-generational fecklessness is a complete exaggeration based on little or no empirical evidence.
Consider the conclusion of a recent, in-depth report by the Joseph Rowntree Foundation (JRF): "Despite strenuous efforts, the researchers were unable to locate any such families. Even two generations of complete worklessness in the same family was a very rare phenomenon."
In fact, a Bristol University study of Labour Force Survey figures found that only 0.3% of UK households have two generations - let alone three or even four (!) generations - that have never worked.
7) Myth: 'THE BENEFITS BILL IS RISING BECAUSE OF CHEATS AND FRAUDSTERS'
Fact: The government's own figures show that just 0.7%, or £1bn, of benefit expenditure is overpaid due to fraud - compared to, say, £70bn lost to HM Treasury through illegal tax evasion.
8) Myth: 'HOUSING BENEFIT IS BEING WASTED ON LAZY, OUT OF WORK HOUSEHOLDS'
Fact: According to the homeless charity Shelter, only one out of every eight people who receive housing benefit is unemployed - the vast majority of HB claimants are pensioners, carers, people with disability and, of course, people on low incomes (see myth 4).
As even the Daily Mail conceded back in October, there has been an 86% rise in housing benefit claims by working families over the past three years.
9) MYTH: 'PEOPLE GET PARKED ON BENEFITS FOR YEARS AND FORGOTTEN'
Fact: As public policy analyst Declan Gaffney has pointed out: "Benefit claims are much less likely to be 'long-term' as people seem to believe. The majority of people on Jobseeker's Allowance claim the benefit for less than three months; less than 10% claim it for more than a year."
10) Myth: 'MEANS TESTING BENEFITS IS FAIRER AND CHEAPER THAN HAVING UNIVERSAL BENEFITS'
Fact: According to the National Audit Office (NAO), means testing "makes the administration of benefits more complex and is associated with higher costs as well as increased rates of fraud and error". The NAO also notes that "there can be disincentives for recipients of means-tested benefits to return to work".
(With thanks to the Resolution Foundation, the Joseph Rowntree Foundation, Declan Gaffney, Jonathan Portes, Chris Dillow and David Wearing.)
Follow Mehdi Hasan on Twitter: www.twitter.com/mehdirhasan
Welfare State - Wikipedia, the free encyclopedia
Welfare | Politics | The Guardian
Why Work? Welfare addiction in handout hungry UK - YouTube
Cut benefits for wealthy says Clegg
David Cameron: Labour is the party of 'unlimited welfare' - UK Politics - UK ...
Helping people is always complicated – in families, welfare and in war
Autumn statement: George Osborne slashes welfare and extends austerity
Welfare state: Ed Miliband can strike a blow for social equity | Observer ...
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it.'
He is to journalism what Ed Balls is to economics!!
They crucify taxpayers but wont touch the wealthy. They stigmatise the weakest in society-the Nazis did this-with vicious schoolboy rhetoric, insensitive even by Eton standards, to cover their refusal to tax the like of Amazon or £2m+ houses and their failure to introduce a FTT or revisit the PFI scandal.
Together these alone could generate £50bln in revenue a year. But it's easier blame the poor and hammer unfortunates living on £55/week. Nice one Nick and Vince to stand idly by. Proud of your contribution to UK politics?
However I fully agree with you on the hypocrisy when dealing with the banking industry. Whilst the dinosaurs on the back benches make as much noise as they can when it's suggested that a manufacturing firm might get a subsidy, no such uproar happens when the banks get the same. They may well have been 'too big to fail' but that doesn't mean that more couldn't have been done to dissuade the same behaviour in the future: the legal regime/culture which allows institutional shareholders to turn a blind eye to poor pay practices because the people in control are subject to a similar regime, should be changed. Bail-outs of the banks should be linked to personal liability on the behalf of the management and workers: perhaps a large company should only be able to receive bail-out funds or sign up to a guarantee scheme if the entire board leaves with no pay-off and the top 200 earners have their salary cut by 25%?
It was 'the Tories' who introduced PFI.
Panorama on 6/12/11 made the claim that this govt have already awarded 34 new PFI contracts with a further 49 in the offing.
PFI in the NHS. The cost is 1% of turnover.
They just expect families to look after their older children who lose their job and cannot afford to stay in their rented flat etc, so they return home.
They are supposed to be the caring party, but want to do everything cheaply and are basically taking the " yellow water " out of the whole country.
A single person who loses their job in Norway gets £1,000 per month unemployment benefit and other allowances as well. That is the equivalent of about £500 in the UK.
#2 benefits have been inflated since Thatcher bought off the miners by putting them on disability. This number also excludes the NHS, undoubtedly a service which provides for the welfare of the poorest.
#7 shows only fraud convictions. Something like 40% claimants for ESA, the new disability benefit, were found to not need it.
Times are hard and most people need their benefits but a significant majority do not.
I know the 40% figure is horrifying but I can assure you it's an _underestimate_.
Only about a fifth actually appeal, and most of those fail.
http://fullfact.org/factchecks/fit_for_work_employment_support_allowance_half_appeals-28552
The headline figure is 54% found fit to work. And this is after 34% dropped out.
With decreasing success of appeals, that headline figure will fall to around 47%.
"It is Atos, the company who do the ESA assessments who are failing the very many sick and disabled."
There's some truth to this, but with 45+% claiming benefits they're not entitled to, what choice did the government have?
You are clearly unaware that a proportion of miners were already off work sick and disabled but received sick pay from the mining industry. When the mines close they were still sick and disabled, but no longer on company sick pay, so had to transfer to a social security sick pay.
They were not "put on the sick" - they already were sick!
Paying for your elders is a part of living in our society, a responsibility I don’t think we should be shirking.
£5 billion is spent on unemployment benefits, and of this only a tiny percentage are the ‘lazy scrounger’ some make out all unemployed people are, if the figure governments of both colours have used of 2.1% then just over £200 million, that’s 0.1% of the entire welfare budget, a tiny fraction, and less than we spend on Afghanistan in a week.
Where would people rather our money be spent, on a system putting people back into work or an seemingly endless war in the middle east, I’d rather we stop spending our money risking our soldiers lives and put that money into the welfare budget.
If you separate welfare from pensions then it accounts for 85% of what pensions do, and pensioners are also able to claim other benefits too, our aging population is the vast majority of our welfare budget.
I'm stating that the biggest portion of the budget is being spent on pensions, not unemployment, and nothing is being done about this.
The Welsh government's new Tax on poorest families to cover the £22 million cut by Westminster runs at £110 pa in Cardiff. Their excuse for this 'poll tax' is to avoid the 'post-code lottery' in English Councils, where measures like levies on empty properties have been used to reduce tax levels.
We learn from the BBC that start-up costs of this new tax will be £2.4 million for IT and staff training. Welsh Councils will also be faced with some £5 million for 15% non-payment plus collection costs, while forcing some of the poorest families through the Courts.
Their argument for rushing it through a special Senedd session this Thursday (19th) - that Councils need time to consult the unemployed, pensioners and disabled people if they accept this inflexible poll tax – is laughable.
Scotland decided it was fair to share their £40 million cut between the government and local authority funds, so why did the Welsh government choose an unfair poll-tax? And why did they refuse to consult us 6 months ago?
The alternative is for the Senedd to tell the Welsh government to follow Scotland for this year, saving the heavy administration costs, and consult widely on what alternative ways they can make up the £22 million in future years.