The benefits budget has been likened to a limitless source of funds. When members of the Conservative Party or Farage’s supporters put forth ambitious proposals such as tax reductions, increased police presence, tougher penalties, or enhanced marriage incentives, their default response to inquiries about funding is often “welfare.” The figures involved are substantial, with the Conservatives asserting, “Only we will reduce welfare expenditures by £23 billion and revitalize the workforce in Britain.”
In a surprising turn, Labour peer George Robertson recently called for a reduction in benefits to bolster defense funding. He stated, “We cannot protect Britain with a constantly growing welfare budget,” suggesting that these funds should be redirected to military needs. His comments were met with a firm rebuttal from the government, with Deputy Chancellor James Murray clarifying that there is no direct competition between these two financial areas.
The assertion that “the benefits budget is out of control” risks becoming a commonly accepted narrative, frequently repeated by interviewers questioning ministers. For a more accurate portrayal, one should refer to Ruth Curtice, the chief executive of the Resolution Foundation. Her predecessor, Torsten Bell, now serves as pensions minister and maintains that his stance on benefits has not shifted since joining the government. Bell has consistently pointed out that benefits as a percentage of GDP have remained stable, hovering between 10-11%. Curtice supports this view, emphasizing that when examining benefits for working-age individuals, the situation appears stable. The rising costs are primarily attributed to pensions, driven by demographic changes such as an increasing retiree population and the triple lock system that raises pensions irrespective of individual financial circumstances. As the pension age rises, more older individuals who cannot work begin to rely on sickness benefits. Are they then labeled as scroungers?
For those excited about Kemi Badenoch’s proposal for £23 billion in cuts, Curtice reminds us of the implications of George Osborne’s £15 billion reductions in 2015. His imposition of a two-child limit led to 450,000 children entering poverty, while the overall benefit cap exacerbated the situation for many. The freeze on housing allowances has pushed record numbers into costly temporary housing. “We are still grappling with the repercussions,” Curtice states, noting that Osborne never fully achieved his intended cuts. Currently, the basic out-of-work rate of £98 per week in universal credit remains the lowest among comparable nations and is 9% lower in real terms than it was in 2010, despite a recent increase from Labour.
Political parties advocating for cuts continue to uphold the costly and inefficient triple lock on pensions, which is projected to cost around £15.5 billion by 2030. They criticize Labour for failing to pass a £5 billion reduction through their MPs last year, but that proposal was indeed poorly conceived, coming as a knee-jerk reaction to the rising number of young individuals claiming sickness benefits due to mental health issues. The Institute for Fiscal Studies’ Eduin Latimer notes that other countries allocate more resources to health benefits. Therefore, whenever politicians casually mention funding from this “magic money tree,” they should be pressed to specify what they would cut and who would be adversely affected.
Stephen Timms, the minister for social security and disability, known for his expertise in social security matters, has been tasked with reviewing disability benefits. He emphasizes that his mandate is not to impose cuts, as the Treasury has committed to maintaining current levels. However, he acknowledges the necessity for reform. He highlights the positive impact of abolishing the two-child limit on the 7,000 individuals in his constituency, which the Conservatives wish to reinstate to fund defense initiatives. Timms criticizes the current assessment system as being dehumanizing. The Resolution Foundation is preparing to report on the lack of reassessments for those on sickness benefits due to job center capacity constraints. Timms collaborates with various advocacy groups, aiming for broad support for reforms, similar to the subtle and sensitive approach taken by Education Secretary Bridget Phillipson in her modifications to special educational needs support. There is hope that, in conjunction with former Health Secretary Alan Milburn’s review of young individuals not engaged in education, employment, or training, more young people can be transitioned into the workforce, despite a challenging job market.
Regarding the proposed shift of funds from welfare to defense, Robertson’s strong statements seem intended to pressure the government. He lamented, “We are unprepared, underinsured, and under attack. Our national security is at risk.” As the author of the government’s strategic defense review, he expressed frustration at the slow pace of funding.
Robertson went on to accuse “non-military experts in the Treasury” of “vandalism.” This criticism, however, overlooks the Treasury’s understanding of the historical failures associated with defense spending overseen by military experts. Once again, last year, the National Audit Office (NAO) was unable to verify the Ministry of Defence’s financial accounts.
The tally of significant overspending and failures in defense spending amounts to billions wasted, with various mismanaged procurements representing a significant issue. The £6 billion Ajax armored vehicle project, which is eight years behind schedule and likely to be abandoned, serves as a recent example. The NAO has also criticized the nuclear program, noting that the replacements for Vanguard-class submarines, expected by 2024, are now unlikely to be delivered before the middle of the next decade.
Robertson, who served as defense minister in 1998, was responsible for commissioning two costly aircraft carriers that ended up nearly double their initial budget, were delayed significantly, and proved too vulnerable and ill-equipped. Therefore, when he speaks about the “corrosive complacency” in current British political leadership, he might want to reflect on the complacency within the defense establishment that captured him years ago.
Having penned Labour’s strategic defense review in 1998, he may not have fully adapted to the contemporary landscape. Caution in defense investments may be prudent, particularly with a shift towards Europe rather than the U.S., amid emerging cyber threats and the need for new protective skills.
While defense spending is often justified as a catalyst for economic growth, recent evaluations have cast doubt on this narrative. The International…
