Rich claim benefits in ‘welfare nation’

as millions remain trapped in poverty
(Another case of Gordon Tullock’s “Welfare for the Well-to-Do”)

A study entitled, "Reforming Welfare," says that Gordon Brown, the Chancellor of the Exchequer of the United Kingdom, has constructed an expensive welfare and benefits system that is "not fit for purpose" and requires a radical overhaul. Moreover, the government is spending more on welfare than on education or law and order, but the vast sums are doing little to relieve poverty, according to the think tank Reform.

Consider:

The welfare state cost £79 billion (about U.S. $154 billion) last year, more than is spent on the entire education system, twice as much as on law and order and almost as much as on the National Health Service (NHS); it totals nearly £3,000 (about U.S. $5,842) a household a year.

There are 51 different benefits, with 39 per cent of households claiming one or more.

Although the Chancellor often boasts about his record on unemployment, there are 5.4 million people of working age who are out of work and living on benefits.

Many of those are registered disabled; Britain has more long-term sick than any European country besides Poland.

According to Reform, the Labour government has created a benefits nation, with two in five households – including many of the richest – claiming handouts. Rather than encouraging people to work, the benefits often end up punishing those who want to better themselves. Britain must start a national debate on the failings of its welfare system, according to the think tank.

The benefits system has become so generous that being "on welfare" is no longer a mark of even relative poverty. Households with incomes of up to £66,350 (about U.S. $129,230, R – which puts them in the richest fifth – can be entitled to welfare.

Source: Anthony Browne, Rich claim benefits in 'Welfare nation' as millions remain trapped in poverty, London Times, November 27, 2006; based upon Nicholas Boys Smith, "Reforming Welfare," Reform, November 2006.

For text (subscription required): http://www.timesonline.co.uk/article/0,,2-2473368,00.html

For study text: http://www.reform.co.uk/filestore/pdf/Reforming%20welfare.pdf

For more on Welfare Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=44

FMF Policy Bulletin/ 05 December 2006