But when you have a big bill, its also important consider what’s happening to the income you have available to pay that bill. And if you do that for the UK, a different picture emerges.
In 1997/98, our welfare bill was equal to 11 per cent of GDP. So welfare payments accounted for 11 per cent of our national income. By 2007/08, this share had gone up to … 10.9 per cent. So we were devoting no more of our national income to welfare in 07/08 than we were a decade earlier.
Of course, it would be perfectly reasonable for someone to argue that this is still too much. There are many people who believe that we shouldn’t be devoting this amount of national income to welfare. But the point is that the problem – if you view it that way – did not get any worse under Labour.
In fact, what’s striking is how the share of national income devoted to welfare spending has not moved consistently upwards for nearly three decades – it was 11.5 per cent of national income in 2003/04.
Now, it is true that the share of welfare spending has gone up after 2007/08 – to 13.3 per cent in 2012/13. But this has happened for two reasons.
First, the recession has caused unemployment to go up. Second, the recession has caused national income to shrink. It’s not obvious that either of these things constitute welfare spending going out of control. They are a result of the fact that the UK has experienced its sharpest post-war recession.