The left is more deluded about welfare than the general public

41% – 3%. 27% – 0.7%. 48% – 27.8%

Do these figures ring a bell? You have probably come across them in one form or another, because they form the backbone of the pro-dependency left’s favourite new story about welfare.

The story goes like this: welfare costs almost nothing, fraud is virtually non-existent, and all welfare recipients except the ones shown on Benefit Street spend their days running around looking for a job. There is no ‘dependency culture’, let alone an ‘entitlement mentality’. These have been invented by Daily Mail journalists in order to stir up hatred against the most vulnerable in society. We should stop talking about welfare altogether and talk about bankers’ bonuses and tax avoidance 24 hours a day.

Yet the public, the story goes on, has been brainwashed by the right-wing press and needs to be re-educated by the cheerleaders of state dependency. This is where the above figures come in, because supposedly, they expose the public’s ignorance about welfare. The average survey respondent thinks that 41 per cent of the welfare budget goes on unemployment benefits, when the true figure is 3 per cent. Respondents believe that 27 per cent of the budget is claimed fraudulently, when the true figure is 0.7 per cent. And they believe 48 per cent of JSA recipients claim for longer than a year, while in reality, only 27.8 per cent do.

I am not claiming that the public is terrifically well informed on welfare. It would be surprising if they were, given the horrendous complexity of the system. However, the figures quoted by the dependency fans do not show that the public is ignorant or misinformed. They show nothing at all, because they represent a mere play on words.

Our basic problem when talking about welfare is that our vocabulary still reflects the state of welfare as it was thirty or forty years ago. We always think that life was simpler in earlier times, but in the case of welfare, it really was. Once upon a time, most people were either in work, or in receipt of benefits – not both at the same time. Things are a lot more complicated today.

What exactly does it mean to say that somebody is ‘on welfare’? Would that include the full-time employee, who receives a minor income top-up from tax credits and/or housing benefit? Probably not. But how about a single parent who works for two days a week, thus receiving some income from work, whilst still receiving the bulk of their income in the form of government transfers? Both ‘being on welfare’ and ‘being in work’ have ceased to be binary matters, and have become continuums. The share of government transfers in household income can now take any values between 0% and 100%, and you can find plenty of households working for 16, 24 or 32 hours per week.

I have no idea where Joe Bloggs draws the line when he talks about ‘people on benefits’, and he would probably struggle when pressed for a definition. But my guess is that Joe is a little bit less interested in the technicalities than an IFS researcher would be, which makes it misleading to take every response at face value.

So let me put a few words in Joe Bloggs’ mouth, although I admit that this is largely speculative:

When Joe Bloggs talks about ‘unemployment benefits’, he does not literally mean ‘benefits that can only be received by those registered as unemployed’. He means all the benefits that can be received by people who are not working, or who work only for a minimal number of hours per week. That can include the Child Tax Credit, Housing Benefit and other payments that would not be labelled ‘unemployment benefits’ in an academic paper on social policy. So the dependency cheerleaders’ approach is akin to me asking you to estimate how many inhabitants Holland has, and then ridiculing you when your estimate is out of kilter, even though I know exactly that you mean ‘the Netherlands’ when you say ‘Holland’.

I would also be strongly surprised if Joe Bloggs thought of pensions, in particular contributory pensions, as welfare. What the dependency advocates have done here is to define the numerator in a ridiculously narrow way, while defining the denominator in a ridiculously broad way, in order to arrive at a ridiculously low ratio.

Something similar is behind the fraud estimate. An Ipsos MORI survey asked people to specify what they mean when they say ‘fraud’. It turns out that for 46 per cent of respondents, this definition includes ‘people on unemployment benefit not trying to find work’; for 42 per cent, it includes ‘people from abroad/immigrants claiming benefits’; for 34 per cent it includes ‘people claiming benefits who haven’t paid any taxes/national insurance’. All of this is incorrect. None of these constitute ‘fraud’ in a legal sense. But for Joe Bloggs, ‘fraud’ means ‘unnecessary use of the welfare system’, or ‘use which the recipient could avoid by making different choices’. Welfare fans, in contrast, have adopted the most legalistic definition of ‘welfare fraud’, a definition they would never accept in other areas such as tax avoidance.

So is the general public misinformed about welfare? Probably. But not nearly as much as those who idolise welfare dependency.

Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).