George Osborne and Iain Duncan Smith have been writing in the papers to say that the UK’s spending on benefits is “crackers”. They’re quoted as saying that “Britain makes up 7 per cent of all the welfare spending globally despite having just 4 per cent of GDP”. The comparison lumps together rich and poor countries, and the discovery that rich countries spend more than poor countries is not exactly surprising. The OECD countries account for just over 60% of the world’s production.
When the UK is compared to other OECD countries, its expenditure starts to look at little more moderate. The figures are here. The OECD countries pay on average 12.4% of their GDP on public cash benefit. The UK pays 10.5%. The UK average is brought down because some of the other countries pay cash for health care, and the UK doesn’t, so a fairer comparison is total public expenditure on social protection: 21.7% for the UK, 21.6% for the OECD. So, depending on the figures we use, the UK’s public spending on social protection is average, or below average.