The Express, pensions and the truth behind the “benefits madness”

By Shamik Das

Today’s front page lead on the Daily Express – Labour’s £186bn Benefits Madness revealed that in 2009/10 spending on benefits would amount to a quarter of all State spending. The “madness” to which the Express refers is, presumably, their belief that the £186 billion, or the vast majority of it, is being squandered: given out to undeserving recipients or fraudulently claimed.

When analysed, however, the figures in the Centre for Policy Studies report reveal a somewhat different picture. Of the projected £186.4 billion overall spend on benefits, only £21.68 billion (11.6%) is forecast to be spent on Income Support, Jobseekers’ Allowance and Employment and Support Allowance – 2.9% of total Government spending.

By contrast, £67.2 billion is set to be spent on Pensions, plus a further £1.38 billion on Pension Credits, amounting to 37% of benefits spending and nearly one tenth of all Government spending.

Only last year the Express were headlining calls for a 45% hike in the State Pension, which, if carried through, would have lead to a total spend on pensions of almost £99 billion – 45.62% of spending on benefits and 12.76% of total Government spending, which would have had to rise by 4%.

Other principal areas of benefit spending include Housing Benefit £19.63 billion (10.53% of spending on benefits, 2.64 per cent of overall spending); Child Tax Credits (£15.68bn; 8.41%, 2.11%), Child Benefit (£11.8bn; 6.33%, 1.59%) and Disability Allowances (£6.48bn; 3.48%, 0.87%).

An additional £30 billion is paid out in minor benefits – 16% of benefits spending and 4% overall, with fraud and overpayments costing at least £2.5 billion a year, according to the report.

Sources: Benefit Simplification (Centre for Policy Studies); 2009 Budget Red Book (HM Treasury); Benefit Expenditure Tables, Medium Term Forecast, June 2009 (Department for Work and Pensions).