Vast majority of Brits are state-dependent: Analysis

By Al Mayadeen English
Source: Agencies
23 Jan 2023 11:28
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The government intends to overhaul the benefits system in order to increase employment numbers, which have yet to recover to pre-pandemic levels due to labor shortages.

People walking over Westminster Bridge in London, Britain (Reuters)

Britain's reliance on government benefits has hit an all-time high, according to a new survey, with more than half of households receiving more from the government than they pay in taxes.

Civitas research of Office of National Statistics (ONS) statistics from 2020/21 revealed that a record 54.2% of persons – or 36 million people – now live in households that received more in benefits – most notably non-cash benefits such as NHS and education services – than they paid in taxes.

The "net dependency ratio," according to analysis authors Tim Knox and Daniel Lilley, is the highest on record.

It had been steadily declining since 2011, from 52.5% in 2011 to 47.5% in 2019/20, but surged during the epidemic as a result of additional aid.

According to new data, millions of #Britons are forced now to skip meals as a result of the ongoing #economiccrisis, with some families going through a whole day without eating a meal.#UnitedKingdom pic.twitter.com/4csjBhaMoU
— Al Mayadeen English (@MayadeenEnglish) October 19, 2022

Furthermore, Civitas contends that the long-term trend is "obviously" rising, with the 1977-2000 average of 41.2% much lower than the 2020/21 figure of 54.2%.

It comes as the Department of Work and Pensions prepares to release a White Paper on benefits ahead of the April Budget.

The Work and Pensions Secretary Mel Stride is looking to restructure the benefits system in an effort to boost employment rates, which have yet to return to pre-pandemic levels due to labor shortages.

In the autumn, Prime Minister Rishi Sunak ordered him to evaluate challenges impeding worker participation.

Last week, the Prime Minister stated that the government is considering a variety of measures to combat inactivity, adding, "We need to look at how our welfare system is operating and is it operating in the way that we would like to make sure that we are supporting and incentivizing people who can be, to be in work."

According to Civitas, only 40% of British individuals pay 83% of all income tax.

It also discovered that the bottom 40% of the income scale, or approximately 27 million people, get an average of £23,000 per year in cash benefits and 'benefits in kind'.

It follows the announcement by the Chancellor in November that disability and working-age benefits will be adjusted in line with inflation.

Benefits will be increased by 10.1% beginning in April, in accordance with the rate of inflation in September, at a cost of £11 billion, according to Jeremy Hunt.

He also said he is worried regarding a “sharp increase in economically inactive working-age adults” since the start of the pandemic, announcing a review into the issues holding people back from work.