The traditional middle-class taboo against signing on for welfare is breaking down.
It’s not long ago that claiming all sorts of benefits, even if you were theoretically entitled to them, was anathema to much of the middle classes. Plenty of older people didn’t even sign up for bus passes, for example – not merely due to a taboo about being needy, but out of a sense of obligation not to take costly help from the state if they could afford to manage without it.
But new analysis of the rising number of PIP claimants shows that within the big headline growth lies a clear social trend. The fastest increases, and the highest proportional rises, are happening in more affluent areas.
It’s certainly the case that the better off are well-equipped to access benefits like PIP, given that many have the resources to pay for private medical assessments rather than wait in the lengthy queues, and that they can afford appeals. Analysis by The Telegraph suggests the least deprived areas generate 47 per cent more appeals to the Special Educational Needs tribunal than the most deprived, and 33 per cent more than the average neighbourhood.
Not coincidentally, polling by Public First finds that the top socio-economic tiers have the highest rate of satisfaction with the way PIP is assessed.
But their capacity to navigate the system successfully doesn’t explain why this desire to register for benefits has risen so acutely. It cannot just be about need – there’s no reason to think that middle-class children have suddenly become disabled at higher rates than their less well-off peers.
The root of the disparity is surely economic rather than medical. The cost of living has risen, putting pressure on the budgets of even more comfortable households.
Crucially, at the same time, the tax burden is at a record high. Only 46 per cent of households are net contributors to the state, paying in more than they receive, according to the ONS – fewer than half of us bear the financial cost of services and payments to the rest. This is the key factor which has fractured that old taboo.
Where once people may have bridled somewhat at their tax bill, they were at least willing to accept it as a cost of contributing to public services and wider society. But as the tax burden has risen and risen, they have passed from thinking “This is my contribution”, and tipped over into the question, “What the hell am I getting in return for all this money?”
This is a corrosive development. Excessive taxation has caused a breakdown in the social contract – instead of being grateful that the middle classes fund an enormous state and hefty Exchequer liabilities, the middle classes have been treated as a cash cow which can be rinsed even more without consequence.
That was a fallacy, and the result is a transactional mindset increasingly focused on getting something – anything – back in return. The previous sense of social duty has been broken by overtaxation, and this has troubling implications for the public finances.
The Laffer Curve is a familiar concept: there is a point past which if tax rates rise too high, they start to reduce rather than increase tax revenues by deterring wealth creation and economic activity. Visible here is a previously hidden extra layer on top of the Laffer effect which further compounds the effect. Not only does excessive taxation depress revenues by driving taxpayers to seek a return from their bill, but it also increases demand for public spending.
That’s exactly what’s happening with the rise in middle-class welfare.
According to figures from the Nuffield Trust, the percentage of 16- and 17-year-olds receiving PIP for autism and ADHD has risen 2.4-fold since 2019 in the most deprived areas, and 3.1-fold in the least deprived. The percentage among the less well-off is still higher, at 5.1 per cent versus 2.5 per cent, but the trend is evident.
This means that while politicians and press speak of “Benefits Street” when talking about controlling welfare spending, the reality is increasingly that the recipients are in leafy suburbs rather than the stereotype summoned up from the infamous Channel 4 documentary.
The result is a double squeeze on the Treasury: less money in and more money out, all at the same time.
For the Chancellor, that’s an immediate problem. He is under pressure to control the deficit, after yet another month in which borrowing exceeded expectations, and is widely reported to be looking to shake down the middle classes even more to try to do it. Yet, if he does so, he will exacerbate this trend further.
For his successors in years to come, it is likely to become a permanent challenge.
Ways of living, once learned, are hard to unlearn. For example, all of us remember older relations who carried the habits developed under rationing and make-do-and-mend through their lives for decades after they were legally required or practically necessary. The same may well be the case for this transactional view of the state currently being adopted by Britain’s middle classes.
Their tradition of virtuous self-denial in which people who technically could claim from the state chose not to, because they didn’t really need it, is dying, bludgeoned to death by the weight of the tax code.
That mindset won’t magically revive overnight, even if taxes fall, and may be lost to us for good. The Exchequer was not grateful for it while it lasted, and its loss is already costing us dearly.
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