UK welfare spending exceeds income tax and National Insurance receipts in most constituencies, Digi Mart USA News (United Kingdom): Three-quarters of constituencies in England receive more in welfare than their workers pay in income tax and National Insurance (NI), according to new research by the Adam Smith Institute (ASI). The think tank’s Welfare Sustainability Tracker shows that England spends £1.25 in welfare for every £1 of income tax and NI it receives.
For Wales, that same figure is £1.88, meaning Wales spends nearly twice as much in welfare as its workers pay into the system, according to the study. Just under half (47%) of the welfare bill is the State Pension and Pension Credit; the rest is mainly Universal Credit (28%), Personal Independence Payments (11%), and housing benefits (4%).
Birmingham spends £2.54 on welfare for every £1 of income tax and NI. Liverpool spends £2.05 and Manchester £1.52, while London, a net contributor, spends 78p.
The findings come as Britain’s total benefits bill is projected to rise from £353 billion to £431 billion by 2031-32.
Viggo Terling, Chief of Staff and Digital Manager at the Adam Smith Institute, said: “A welfare state that spends more than it raises through income tax and National Insurance is one that increasingly relies on other taxes and borrowing to stay afloat. Our Tracker exposes the scale of this imbalance.”
“With only London and the South East contributing more through these taxes than they receive in welfare spending, we must ask serious questions about the long-term sustainability of the system. A compassionate welfare state must also be a financially sustainable one,” Terling said.
The Prime Minister has said he wants to cut the number of young people who are not in work, training or education. Asked in the same week whether this could involve cutting some benefits, Mr Burnham told Times Radio: “I am prepared to take difficult decisions because I can’t accept the idea that we have a million or more young people in their 20s on benefits.
“It’s not good for them. It’s not good for anybody.
So there does need to be quite radical change in the way we support young people.”
The Prime Minister told the BBC that he could not promise when the overall benefits bill would start to decrease, because there is a need to invest. “What will have to go up first is the spending on support for young people,” Mr Burnham said.
He added that some money may have to be reprioritised, but the overall welfare bill would eventually go down.
Asked whether this would happen before 2029, he said: “You do it in a way that’s sustainable. And if it could be this parliament, as soon as possible is the thing I would say to you.”
