On Sunday the Wall Street Journal published a long article headlined “The Welfare State is Crushing Britain.” It focusses on but one aspect of the UK social system, namely disability and sickness benefits, and its details are equal measures depressing, familiar, predictable and alarming.
Like other European redistributionist schemes, British disability payouts have steadily ballooned in the postwar period – expanding from a niche benefit for those unable to work due to serious illness and on-the-job injuries to a morass of programmes that showers millions of people with billions in pointless, self-defeating subsidies.
A 2024 government survey found that fully 25% of the entire British population might be considered disabled under present inflationary criteria, which adds perspective to the eye-watering figure of 10% presently drawing benefits. The fastest growth in disability claims occurs among working-age demographics, where compensation, once granted, soon becomes a powerful disincentive to work. In this way the British disability system actively cannibalises its own tax base. The total bill for sickness and disability benefits this year will exceed £100 billion, which comes on top of the £280 billion the British taxpayer presently spends on healthcare and which substantially outstrips the £68 billion British defence budget. Disability spending has jumped 25% over the last four years, and without reforms it will rise another 30% over the next four. Fuzzy psychiatric disability claims, from depression to ADHD, drive much of the expansion, as a whole universe of charities and AI-powered chatbots advise ever more able-bodied people on how they might opt in to this wonderful system of free money. Among many crazy details, we learn that those on disability can trade some of their cash benefits for new car leases every three years. This programme now accounts for one in seven automobile sales in Britain and has elevated the company handling these deals (Motability) to the largest automobile leasing concern in the country. The debt required to fund this and the rest of the British social system has driven borrowing costs to rates not since since the 2008 financial crisis, while high taxes continue to encourage the emigration of the wealthy and productive.
These are the mere symptoms of a sickness that extends well beyond the United Kingdom. We are looking here at a fiscal and also a political crisis afflicting the entire postwar European model. Below the fold I want to explain the nature of this crisis and why our political systems seem powerless to address its fundamental causes – indeed, why many of our politicians seem determined to make it worse. With little chance of reform, we face a future of economic decay and declining living standards, culminating in sovereign debt crises and perhaps even political collapse. The postwar order is slowly dying, in its eighty-first year, of old age. There are no answers and nobody knows what will come next.