On Thursday, when I reviewed some of the Daily Telegraph‘s figures on benefits, I took it that some of the wilder statements were down to the Telegraph reporter. Discovering similar figures in the Daily Mail made me wonder if they didn’t come from a common source, and on checking I found that they did: the main source is the Secretary of State for Work and Pensions.
In his speech to the Conservative conference at the beginning of October, Iain Duncan Smith said this:
“just before the election, in one year, Labour spent £90 billion on working age welfare – the same as the entire education budget for that very same year. … To put this in perspective, by 2010 this increase in welfare spending cost every household in Britain an extra £3,000 a year in tax.”
The Cabinet Office report for the Coalition, The State of the Nation (2010), claimed that “At least 12 million working-age households receive benefits each week (including tax credits and Child Benefit) at a cost of around £85 billion per annum” (p 10). With 20.4 million households in the UK, the cost per household was £4166. The DWP’s figures for the cost of working age benefits in 1997-98 are £31.3 bn in nominal terms and £46.4 billion in real terms. However, those figures exclude Child Benefit at £7 billion and Family Credit, the precursor of Tax Credits, at £2.3 billion; so the nominal figure for 1997 is £40.6 billion, which at the time with 18.7 million households was £2167 per household. So it is not true, even taking the figures in nominal terms, that households in 2010 were having to pay an extra £3000 a year for ‘working age’ welfare.
A second point raised in the Telegraph was the cost of “troubled” families. I questioned at the time whether this was an ‘official’ statistic’; but I have since found that it has been used by the Prime Minister, the DWP, the Home Office and the DCLG, and I have to concede that it is. The Prime Minister said last year:
“We’ve always known that these families cost an extraordinary amount of money but now we’ve come up the actual figures. Last year the state spent an estimated £9 billion on just 120,000 families – that is around £75,000 per family.”
There are two key figures here. The first is the number of families, which comes from a confusion between families with disadvantages and families which cause trouble. Professor Ruth Levitas, of the University of Bristol, has made a detailed analysis of the claims. She comments: “The most charitable explanation is that their research is statistically incompetent.” The second is the estimate of cost. The only detail I have about the costing is a statement from the Home Office that £2.57billion of this is attributed to crime and criminal justice. I haven’t been able to find any basis for the costings, and Ruth Levitas didn’t either.