Talk to anyone in London these days and people all seem to agree that it has become almost impossible to translate hard work into any kind of financial progress.
This echoes a major poll in the Standard today which found that nine out of 10 voters think their personal finances are getting worse or no better, in a pre-election blow to the Conservatives.
Everyone understands that high taxes in a country aren’t necessarily a bad thing, if they’re being used to produce a fantastic education and health system, alongside providing help for those in need. That, after all, is surely the benchmark of a good and fair society.
But while our health and education systems are woefully under-resourced, the bill each month for welfare payments has spiralled out of all proportion. Public sector finances data, out today, shows that net social benefits paid by central government increased by £3.5 billion to £23.7 billion in March, largely because of inflation-linked benefits uprating.
In 2022-23, the Government spent approximately £231.4 billion on benefits, dwarfing the projected 2023-24 bill for healthcare (£176.2 billion), education (£81.4 billion) and defence (£32.4 billion). Furthermore, Office for National Statistics data suggests there are now 9.25 million people between the ages of 16 and 64 who are not working nor looking for work.
A friend’s son was signed off work with depression and anxiety after a break-up; a year later he’s still at home
The overall welfare bill, which also includes state pension and housing support, is projected to climb to £360 billion over the next five years — the equivalent of 11 per cent of Britain’s entire economic output, with disability benefits forecast to have gone up by 50 times in 40 years by 2028-29.
Now of course, a huge portion of this is needed and deserved. More than 7.6 million people are now on NHS waiting lists in England, up from 4.6 million before Covid. The pandemic and the associated lockdowns sent a lot of vulnerable people over the edge. But the number of people now being signed off work is extraordinary and, tragically, a high proportion of them are young adults in their twenties complaining of mental health issues.
My friend’s son went to the doctor a year ago complaining of anxiety and depression after a break up, and was immediately signed off from work. A year later he’s still at home, becoming more and more reclusive with each day that goes by. Rather than see the doctor as compassionate, my friend despises her and blames her for her able-bodied, vital son wasting his life away at home. All of us know that when our children beg not to go to school because of something that has upset them, be it with a teacher or a friend, the worst thing we can do is allow them to hide. Could the same apply in some cases here?
And isn’t Rishi Sunak simply factually correct when he says this direction of travel is completely unsustainable? The Office for Budget Responsibility’s recent Fiscal Risks and Sustainability Report shows that unless we stop spending so much, public debt could rise to 300 per cent of GDP by the mid-2070s. It’s irresponsible to pretend we can keep continuing to spend the amount we are. And consigning this many people to lives without work feels the opposite of kind.
Of course, it’s not just taxes that are making us feel poor at the end of the month, but also the cost-of-living squeeze and high interest rates. But the nation’s tax burden is set to hit its highest point since the Second World War by 2027-28.
Our welfare state and the benefits we give people — whether it’s through help with housing, pensions, free healthcare and education or maternity leave — is the best thing about our society. But the contract between those who contribute and those who take out is a delicate one, and the system won’t work if spending isn’t proportionate to GDP or people think money isn’t being spent wisely.
My new obsession
I started watching Baby Reindeer last night and was completely enthralled. Created by Scottish comedian Richard Gadd, who stars as the male lead, Donny Dunn, the story follows Dunn as his dreams crash around him and he embarks on a not entirely consensual friendship with a lonely woman named Martha (Jessica Gunning) who then begins to stalk him. It feels incredibly nuanced and fresh, massively helped by the fact that the stars aren’t absurdly good-looking facsimiles of real people. Gunning is especially convincing — that laugh! I’m totally hooked.
Anna van Praagh is the Evening Standard’s chief content officer