The cost of the UK’s inadequate income support is huge. Paul Nicolson writes.
The UK has never been generous with its benefits system. In 2008, Tim Harford of the Financial Times reported on research by the Organisation for Economic Co-operation and Development that showed that member governments spent an average of 0.75% of gross domestic product on unemployment benefits. In 2006, France spent nearly twice this and Germany almost three times as much, while the United States spent a third of the average and the United Kingdom just a quarter. Germany spent more than ten times as much as the UK relative to GDP. With “austerity” it has only got worse.
In parallel with this, the government has been cutting the central funding for council-tax benefit. It reduced it by 10% in 2013.And 289 out of 326 local authorities in England have made the poorest cover the shortfall by taxing the very working-age benefits that national government has shredded by £18bn since 2010. The local authorities did not ask the better-off to pay anything towards the shortfall.
The inevitable result has been increasing debt among the poor. Some 3.5 million people were sue for council-tax arrears in the magistrates courts by councils in England in 2016. It will be worse this year, because working-age benefits are to be cut by another £12bn by 2020.