SHOCKING RISE OF ‘SOMETHING FOR NOTHING BRITAIN’
Tom Witherow Senior Political Correspondent
Daily Mail 23 Jan 2023 Over half of households get more from State than they pay in tax... while top 10% of earners account for 53% of all income tax
BRITONS are more dependent on the State than ever before, a bombshell report reveals today.
For the first time, more than half of households – 36 million people – get more from the Government than they pay in tax, according to a study by Civitas.
This is up from 24 million, or two-fifths of households, when Tony Blair was in power at the turn of the millennium.
MPs said the huge government support provided during the Covid pandemic ‘changed the psyche’ of the country and made people think they can ‘get something for nothing’.
The cost of the nation’s massive reliance on the State is being borne by higher earners, the think-tank’s report found.
The top 10 per cent of earners pay 53 per cent of all income tax, turning the levy – the Treasury’s biggest single earner – into a ‘stealth wealth tax’, Civitas said.
The surge in state ‘dependency’ means the poorest fifth of households receive £17,600 more on average in welfare and non-financial benefits from the State than they pay in tax. The findings sparked alarm among senior
Tories, who demanded tax cuts to boost growth and a fresh debate about the role and size of the state.
sir Iain Duncan smith, the former Conservative leader and ex-work and pensions secretary, said: ‘Lockdown changed the psyche of the British people.
‘For all those years, we told them you can’t get something for nothing, and all of sudden they did. The British public thought the Government could do it all – even pay their salaries and they don’t have to work.’
The Civitas analysis used data from the Office for National statistics to compare how much tax people pay with the benefits they receive from the Government.
These include cash welfare payments, such as Universal Credit, Jobseeker’s Allowance and the state pension, and non-financial benefits, such as use of the NHs and social care, free school meals and subsidised housing.
The proportion of those who get more from the state than they put in has climbed steadily over several decades, and is higher now than under either sir Tony or Gordon Brown’s premierships.
The nation’s reliance on the state spiked between 2020 and 2022, in part due to the massive jump in health spending, the fall in VAT receipts during lockdowns, and a growing benefits bill.
The report’s authors said the true headline figure was likely to be even higher than 36 million people because their findings excluded the £70 billion furlough scheme.
The latest data also does not take account of the tens of billions of pounds put aside to subsidise energy bills, and the impact of hundreds of thousands of people disappearing from the workforce.
The report sparked fears that the state has become bloated, smothering entrepreneurship and forcing the lowpaid into a benefits trap.
Mr Duncan smith said: ‘The more we spend, the more we have to tax or borrow. The Government has to do something, and do it pretty quick. start cutting taxes, and put money back into people’s pockets.’
Tory MP Ben Bradley added: ‘None of this is sustainable. You can’t have more people taking out than putting in.
‘As a society we need to have a serious conversation about our levels of demand and expectation of the state.’
Former Tory Cabinet minister sir John Redwood said: ‘The Government should take on board the message of this report. We need to encourage more people back into work.’
Liz Truss and Kwasi Kwarteng announced huge tax cuts in their disastrous september mini-budget – but new Chancellor Jeremy Hunt ditched the plan.
But as energy prices fall, Tory MPs and business leaders have asked if the Government is doing enough to promote economic growth.
There is also a growing backlash from many Conservative backbenchers, who believe that tax on high earners, the ‘strivers’, is too excessive. Tim Knox, author of the Civitas report, said all political parties must ask: ‘Is it a good thing that more than half of Brits take more from the state than they put in?
‘Do we, as a country, want so many people to be dependent on the state?’
A government spokesman said: ‘Our priority is to help families gain financial independence through work, but we recognise we need to go further and are looking at how we drive down economic inactivity at pace.’
When the latest polls show, astonishingly, that Labour is more trusted by voters to cut taxes and fix the economy, it’s time the Tories asked themselves a serious question. What exactly is their point and purpose?
They are supposed to be the standard bearers for Conservatism – a small state, and an unflinching commitment to low taxation, growth, entrepreneurialism and aspiration. That philosophy has served the country well over the years.
The problem is, the Tories have been seduced into believing that state intervention and high taxes are necessary to win the love and support of the public.
Well, now they’re finding out that they’ve made a grave mistake. By savaging the economy with tax hikes, the party has wrecked its hard-earned political reputation for being on the side of hard workers.
Rishi Sunak and his Chancellor must return to first principles – leaving people with more of their own money to spend, incentivising business to create jobs and the wealth to fund our public services, and reducing the bloated state to a manageable, affordable size. And they have to start getting people back to work – urgently. It is scandalous that over half of the population get more in benefits than they pay in tax.
Shamefully, this is higher than under Tony Blair, who deliberately created an army of people who did so well out of welfare handouts that they shunned employment.
high earners are, of course, bearing the brunt of the cost, with the best-paid 10 per cent paying 53 per cent of income tax.
Far too many people are indolent and unproductive. As a report by Civitas warns today, a troubling ‘something for nothing’ culture has developed. This sense of entitlement has grown since the pandemic. First furlough, then energy subsidies, have helped convince people that whatever befalls them, the Government will bail them out.
By presiding over the highest tax burden since the Second World War, ministers have further reduced the appeal of working harder – or indeed at all – damaging investment, growth and prosperity.
Yes, we need to balance the books. But Jeremy hunt mustn’t aggravate the party’s problems in this spring’s Budget.
If the public finances are in ruder health than forecast, it would be an error to press ahead with punishing tax rises.
Already too many Britons aren’t working – and that means Britain itself isn’t working.
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