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Mythbuster: Tall tales about welfare reform

Ben Baumberg, Kate Bell and Declan Gaffney tackle some of the most common welfare myths
August 2012

Welfare reform is almost inevitably contentious. Answering the question of who should receive how much financial support relies on often competing conceptions of fairness, with rival views about who needs, and who deserves, our help, not to mention the most just and efficient way of providing it. These issues are worth debating – but the current debate is being conducted on shoddy terms. Myths and stereotypes abound. These serve not only to unfairly stigmatise claimants, but to obscure the questions we might want to answer about how best the state can provide support to people who need it.

Myth: There is a major problem of ‘families where generations have never worked’

Reality: The academics Paul Gregg and Lindsay MacMillan looked at the Labour Force Survey, the large-scale survey of households from which we get most of our statistics about who’s in work. In households with two or more generations of working age, there were only 0.3 per cent where neither generation had ever worked. In a third of these, the member of the younger generation had been out of work for less than a year.

When they looked at longer-term data, they found that only 1 per cent of sons in the families they tracked had never worked by the time they were 29. What’s more, while sons whose fathers had experienced unemployment were more likely to be unemployed, this only applied where there were few jobs in the local labour market. So ‘inter-generational worklessness’ is much more likely to be explained by a lack of jobs than a lack of a ‘work ethic’.

Myth: Most benefits spending goes to unemployed people of working age

Reality: The largest element of social security expenditure (42 per cent) goes to pensioners. Housing benefit accounts for 20 per cent per cent (and about one fifth of these claimants are in work); 15 per cent goes on children, through child benefit and child tax credit; 8 per cent on disability living allowance, which helps disabled people (both in and out of work) with extra costs; 4 per cent on employment and support allowance to those who cannot work due to sickness or disability; 4 per cent on income support, mainly for single parents, carers and some disabled people; 3 per cent on jobseeker’s allowance; and 2 per cent on carer’s allowance and maternity pay, leaving 3 per cent on other benefits.

Myth: Benefit fraud is high and increasing

Reality: The latest Department for Work and Pensions estimates show that in 2011/12 just 0.7 per cent of benefit expenditure was overpaid due to fraud, including a 2.8 per cent fraud rate for jobseeker’s allowance and a mere 0.3 per cent for incapacity benefits. Even if we put together fraud with ‘customer error’ – people who are not entitled to benefits but not deliberately defrauding the state – the rate of false claims is 3.4 per cent for JSA and 1.2 per cent for incapacity benefit.

The claim that benefit fraud is increasing is similarly false. Because there have been changes in how fraud has been calculated over time, we have to look at combined fraud and ‘customer error’ for JSA and income support. This declined from 9.4 per cent to 4.8 per cent of spending from 1997/98 to 2004/05, and has since stayed roughly flat.

Myth: Couples on benefits are better off if they split up

Reality: This one has recently been comprehensively disproved by research from the Joseph Rowntree Foundation, who concluded: ‘The simplest question that can be asked in testing the couple penalty is: does the benefits system provide a different proportion of a family’s daily living needs if they live together and if they live apart? The clear answer from the calculations in this paper is no. The benefits system provides very similar living standards to families living together and apart.’

Research in 2009 for the Department for Work and Pensions looked at whether different benefit systems had any impact on people’s decisions about whether to stay together or not. They concluded that ‘on balance, the reviewed literature shows that there is no consistent and robust evidence to support claims that the welfare system has a significant impact upon family structure’.

Myth: The welfare bill has ballooned out of control

Reality: The government has repeatedly claimed that welfare expenditure grew unsustainably under Labour. In fact, total expenditure on welfare was 11.6 per cent of GDP in 1996/97; under Labour it averaged 10.7 per cent up to the crash. Afterwards benefits for children and working age adults rose from an average 4.9 per cent of GDP up to 2007/08 to 6 per cent. This is what you would expect during a recession.

Myth: Most benefit claims are long term

Reality: The government persistently frames benefit claimants as ‘languishing in dependency’. So how much of the benefit caseload is long-term? It depends whether you count people at a single point in time or look at people moving on and off benefits over a period. The numbers paint a completely different picture. For example, in 2008, some 75 per cent of incapacity benefit claimants had been receiving the benefit for more than five years, and only 13 per cent for less than one year. But over the period 2003–8, only 37 per cent were long-term while 38 per cent were on benefit for less than a year. So if you count claimants at just one point in time, as government tends to do, you will overestimate how much of the caseload is long-term – and underestimate how many people move on and off benefits over time.

Myth: Social security benefits are too generous

Reality: Out of work benefit levels fall well below income standards based on detailed research into what ordinary people think should go into a minimum household budget. Research by the Joseph Rowntree Foundation found that while pensioners do in fact receive 100 per cent of what people think they need, a single adult of working age receives 40 per cent of the weekly minimum income standard and a couple with two children receives 62 per cent of the weekly minimum.

Myth: Most people who claim disability benefits could be working

Reality: There are two main kinds of disability benefits: disability living allowance (to cover the extra costs of disability) and employment and support allowance (income replacement for those not in employment). The most basic misunderstanding is that the latter is only for people who are ‘completely incapable of work’. The welfare reformer Sidney Webb commented in 1914 – in the midst of one of many previous panics about ‘true disability’ – that the only people who could do no work at all were ‘literally unconscious or asleep’. The question is whether suitable jobs exist, and whether these people would be able to get them.

Once we understand this, three problems face us. First, just because we’re living longer doesn’t mean we’re in better health; improved medical care means that many people born with impairments or suffering traumatic injuries are able to live longer. Second, jobs are in some ways worse than in the early 1990s: people have to work harder and have less control over their job, which makes it more difficult for people with health problems to stay in work. And while we now have anti-discrimination legislation, this only forces employers to make ‘reasonable’ adjustments; the evidence not only suggests these are often limited, but that employers are less willing to employ disabled people as a result.

Finally, many of the people claiming incapacity benefits are people with low employability in areas of few jobs. These are the very employers that are less likely to make adjustments. Some people end up in a situation where they are not fit enough to do the jobs they can get, but can’t get the jobs they can do.

Completely incapable of work? Not necessarily. Penalised for their disability by a labour market that has no place for them? Definitely.

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Peter Kemp 27 August 2012, 12.05

We hate benefit cheats. Let’s make some more.

There seems to be an unwritten rule that when defending sick, disabled and unemployed benefit claimants, one should start off with a kind of disclaimer in the form of an attack on benefit cheats. i.e., I/we all hate people that fraudulently claim benefits string them up and throw away the key etc. I won’t do that because I think most benefit cheats are petty criminals like any other petty criminal. I hope they get weeded-out of the system but that’s about it. Getting hysterical about ‘cheats’ would be excessive in my view and probably say more about my viciousness than theirs.

This is not the attitude of the government and some of the media. These bodies appear to expect the public to share their view that benefit cheats are like the commies of the 50’s and 60’s, subverting our society, corrupting our children and leading to the downfall of a once-great-nation.

However, for those that profess outrage at the heinous crime of fraudulently claiming benefits, their own disclaimer is often: ‘we want legitimate claimants to get the benefits they are entitled to’. Do they really?

The statistics show that ATOS are finding thousands of people fit to work who are not fit to work. Due to this incompetence at the instigation of our government, people who are incorrectly assessed are forced into an impossible situation.

A person who is too sick or disabled to work but judged by ATOS to be fit, could be forced to claim that they are actively seeking employment if they are to get any benefits at all. If they say they are not looking for a job – no benefits. If they claim that they are looking for a job when they know full well that they are too sick or disabled to work, then they are lying in order to claim a benefit they are not entitled to receive.

Are the government looking into how many people their crazy policies have forced into doing this? Of course not, because an unemployed person is cheaper for them than someone too ill or disabled to work. When benefit fraud saves the government money, they don’t mind it – in fact their policies have created the fraud in the first place. Hypocrisy.

I suspect that ATOS’s incompetence and some politician’s hypocrisy have probably created more benefit cheats than have ever existed before. It seems likely that many were honest citizens who would never have dreamt of committing fraud until their government forced them to do so. The government’s policies are NOT about people getting the correct benefits that they are entitled to – they are about saving the government money.

Disablednobody 27 August 2012, 12.22

i kno wwhat you say is true bu how do we make this attack on the disabled stop,i live in permanent fear of the postman and the esa letter, I live in fear of everythign and i have no life as it is yet this maks me feel that no life is the only way out of this hell

Dennis Sprigg 27 August 2012, 14.07

This is a government that is set on attacking sick and disabled people and the working class and elderly under the last government things were done fair even the atos examination was fair this tory run coalition that thrives on greed and selfishness does not care they are beyond any arrogance know to us they live a life style of a Millionaire as most of them are but they dont do the job that they are paid to do that is represent us once they get into government they become a business that looks after an elite group of people themselfs being first and foremost as we see they have not taken any cuts on their own wages and high expenses if our country is as poor as the make it out to be why was the the Queens jubilee this year allowed to have £1.3b pounds spent on and really what did the tax payer get back in return nothing just a flag waving day at our expence.Im sorry but these people are not politicians most of them were born with a silver spoon in their mouth and they live in a world poor people will never know or understand Its time we as a people saw through this game they are playing with our lives the country is not theirs its everybodies and this government is inflicting the worst cuts on one group of people the tories must see as unwanted not good enough people hence their vile attacks on us .I hope the people wake up soon before this government destroys everything but the rich elit …

francis 27 August 2012, 20.01

So what concrete proposals are Labour putting forward to radically modify, or dismantle this pernicious, inhumane system?

Jo 29 August 2012, 11.14

“Housing benefit accounts for 20 per cent per cent (and about one fifth of these claimants are in work)”

I think you’ve included pensioners in the denominator for this calculation (and so double-counted them in your myth-busting). According to Crisis (http://www.crisis.org.uk/pressreleases.php/419/government-lsquopeddling-myths-to-sell-housing-benefit-cuts) 22% of housing benefit claimants are in work but only 26% are unemployed:

Myth: All Housing Benefit claimants are unemployed


More households who claim Local Housing Allowance are in low paid employment (26%) than unemployed (22%)

1.6 million people receiving Housing Benefit are pensioners and others are disabled or have caring responsibilities.

Ben Baumberg 29 August 2012, 12.09

Jo – There’s been some debate about this in recent months – the figures are available in Table 6 of the additional tables here, and a typically nice explanation is given over at the FullFact website (following on from some earlier confusion). In general I’m wary of looking too closely at ‘unemployment’ while ignoring economic inactivity (people not working but who are not actively looking for work). Hope this clarifies.

Dave Murphy 29 August 2012, 12.19

Your Myth: Couples on benefits are better off if they split up seems somewhat misleading. How can you say a couple where one is working and the other has time limited ESA would not be better off if they split up?

Sure, couples may well be reluctant to split up and you may only be considering situations where both partners are in receipt of benefits but I can’t help feeling that it does little to incentivise the behaviour the government say they want to encourage.

Richard Atkinson 29 August 2012, 17.59

You underestimate the proportion of benefit expenditure that goes to pensioners. It’s actually about 65% and rising. See the tables here:
in particular the summary table at p.11.

I think you have just taken those benefits that go exclusively to pensioners (SRP, AA) but not counted the proportion of eg, CTB, HB and DLA that also goes to pensioners.

Figures are not complete:
– they don’t include tax credits, primarily for working age people. Even with this though, and therefore a total welfare expenditure of about £210 billion, pensioners get over 50%
– on the other hand the figures don’t count free prescriptions and bus passes for pensioners (about £6 billion a year).

Pensioner benefits have been protected from nearly all the cuts and Cameron wants to keep it that way. As a result, and because of pensioner demographics, they are not cutting overall welfare expenditure at all. to make an impact they must really hammer working age claimants.

These figures need highlighting much more: they completely undermine the government’s story line on benefit expenditure – TWO THIRDS OF IT GOES TO PENSIONERS! Say it loud.

Robert (Jamie) Munro 29 August 2012, 23.51

While I agree with most of your points, I have to argue with the “Most benefit claims are long term” point.

It’s not the number of claims that is important, it’s the amount of money they cost. 1 person claiming for 10 years is the same cost as 24 people claiming for 6 months each. On average at each point in that 10 year period, there will be 1 long term and 1 short term claim. That is surely the fair way to count.

Benjohn 1 September 2012, 11.39

I liked this article – I’m just discussing it with friends. Quite a lot was surprising! However, it could really do with citations were relevant. Without that it’s dangerously close to being unsubstantiated like the rubbish it tries to quash.

Ben 4 September 2012, 20.49

@Myth: Couples on benefits are better off if they split up

This, as you describe it, does indeed look like a myth.

However, couples, one of whom is working, or where one is working only a few hours, are certainly better off if they split up. The lower paid half will almost certainly qualify for more help alone that is not available to both together, whether it’s housing benefit or tax credits, or even JSA.

Although separated they might incur higher total costs, one would loose a burden and the other would gain support. Ergo, if combined they don’t really have the means to make ends meet, the logical conclusion is to seprate. They could live together if they end their relatonship, or live apart so that they can continue. The former scenario is borderline ridiculous and no one would believe them anyway, and in the latter scenario they may well cost the state substantially more, but end up being slightly better off. This is clearly insane.

This is an actual scenario known to me. But you can easily see it happen: two working people, one of whom loses a job or has their hours reduced. Or an unemployed person moving in with their partner only to find they suddenly can’t claim e.g. JSA anymore. Or one full time and one part time worker whose combined income puts them above tax credit thresholds, etc.

Of course the solution appears easier for such couples than for many people on benefits, because with one in work they are already half way on the pach to “riches”: the lower paid one finds more work. But it’s likely problems with that that landed them in their predicament in the first place.

melanie 23 September 2012, 10.37

I understand how all you are all feeling, I am awaiting a appeal also. Aftet all I have read looks to me I want pass that even. I also have two disabled children that I do worry for under these new rules. What the hell are we going to do if they don`t pass my son with Aspergers who is aproaching 18 next year, he only go”s to college . He never left the house for two years and other than college witch he as to have support in the class room, never leavesthe house at all, he dose not even shear a room with his famlily, he is completly shut off from society and people around him. yes he funtions in college but at a cost to his emotioal welbeing that is what people from outside do not see.

Hugh Cares 14 October 2012, 17.11

I so agree with ‘disablednobody’. Why doesn’t the govt just put us into camps, give us nice blue and white pyjamas and have done with it. They could even give their disability policies a slogan….”work sets you free’ has a nice ring about it!

I feel victimised, betrayed and helpless.

Tom Evans 20 October 2012, 16.04

To the extent there is any couple penalty, reforms since 2010 have only worsened it. Not one reform has improved it.

One example: time limiting contributory ESA creates a new £80-£90 a week couple penalty that did not previously exist. Another is the change in required hours for working tax credit, from 16 hours for everbody to 24 hours for couples and 16 for single parents.

Debbie 5 November 2012, 12.29

We, Disabled people are being victimised by this government. But, in reality, what can we actually do about these reforms they are introducing?? How do we fight back?? Perhaps, everyone of us should right a letter to No.10?? I wonder how many Cameron would actually read?? We are going to have to go through many appeal process’s. We can’t even take them to court, with Legal Aid being abolished. We have the indignity of DLA being scrapped, even for us that were awarded a life time award. I’ve read that ATOS are making millions. And their assessment consists of a ‘tick box’ critea on a screen. Then, we have to deal with the ‘bedroom tax’ being introduced. I’m going to have to pay 25% of my housing benefit. Even though my house has been adapted. Where are all these one bedroom, adapted properties that they want us to move to?? They don’t exist! Not even in the private sector. Because, that’s the only way you don’t have to pay towards your rent. No security of tenure there though. I’ve lived in my HOME for over 21 years. Why should I have to move? I’m 95% bed bound. Discretionary housing payment? A very high critea to get that. I read on my councils website, that it is not long term, so, what then?? Claim you need a spare room for an overnight carer?? So, how would I pay for a carer, 7 nights a week?? If, I had to get up in the night, it would be very dangerous. I am heavily medicated. I already pay towards my care package. That’s another subject. Their assessment does not take many of your outgoings into consideration at all. I pay a cleaner. I have no choice. The cost of living go’s up, all the time. I eat only 1 meal a day. I’m frightened to put my heating and hot water on. I get an ‘extra’ £10 per winter. ‘To help with that’. Cold weather payments, are a joke!! Yet, pensioners, I think, get an extra £100??
I do fully understand the need for houses for familys that are overcrowded. But, this is my home. Housing Association. I’ve spent a lot of money on it, over the years. I’ve just had to pay £250 to have my bedroom decorated. As per, my tenancy agreement. To keep the property in good order. That, took me a very long time to save up for. Yet, IF, I was a council tenant, I could apply for help with decorating and gardening. My, HA offer no help, at all. Yes, I have a garden. My sanctuary. I have Bipolar. Social services, offered me a 2 bed flat on the 4th. floor! I’d still have had to pay for the second bedroom. I was told, I could take my animals up and down in the lift! Yes, I have small dogs and cats. My choice I know. But, they are my life and a reason to have to get up in the morning. I have no family. As I’m estranged from my son’s due to my Bipolar. The only people I see are my carers. who are brilliant. Animal welfare is another issue this impacts on. If ‘we’ disabled people are supposed to move into flats. Those of us with pets, would have to get rid of them. All, rescue centres already, bursting at the seams. So?? Put our animals to sleep?? I’d be following them, that’s for sure. Maybe that’s the answer.. that would save the government a lot of money… We know longer have the Disability Discrimination act. It’s the Equality Act. 2010. We are not being treated equally though. I wouldn’t be at all surprised if the suicide rate go’s up. The impact is going to be huge. It’s detrimental to disabled people. The audacity of Cameron to be on stage at the Pride of Britain awards and praising the paraolympics.
Yes, he lost a disabled son. But what does he know about, ordinary disabled people and the way we have to live. All, politicians sitting in their ivory towers, earning huge amounts of money. Try cutting their salaries and expense’s claims and put that money into the economy!! The NHS for instance.
I am not a rascist at all. But perhaps they should concentrate on people that were born in this country. We’ve, all heard stories about people coming here, given a house and benefits. Whilst many people have to wait years to be housed. And fight to survive. One of my carers told me the other day, that her Mum lived next door to a huge 3 bedroom council house that had been empty for 3 months. And then a family moved in, that had been in the country for 1 week!
I, for one would never vote for this government. That’s the only power we have.

mandm 7 December 2012, 20.42

This is a good article in that it explodes the myths but as someone mentiond Atos and thier practises wasnt it labour who brought in Atos and i wont mention the disabilty denial factory from the states..
I hate the tories with a passion but come on this party has it part in all this the question is will it put this right IF, and there is no sure thing there, they get back in power….

Tony 21 December 2012, 23.36

This story http://www.dailyrecord.co.uk/news/scottish-news/atos-killed-my-dad-says-boy-1411100
provoked outrage towards ATOS and I D Smith in particular when it was printed.
I D Smith sent out a typed response apologising for the death of Keiran’s dad and a scribbled signature,let there be no mistake here,commit suicide and it’s one less statistic for these heartless bastards at Downing Street.
New Labour who brought ATOS to these shores should hang their heads in shame,I will make sure that any of my family NEVER vote for them again as long as I live.

Tony 21 December 2012, 23.49

Sad,sickening,shocking ATOS.


Richard Sanderson, 44, drew up meticulous suicide plans after learning he could no longer afford the flat he shared with his wife and nine-year-old son after being told their housing benefit would be cut by £30 a month.Richard stabbed himself twice through the heart.

Paul Reekie,48, left no suicide note but a letter informing him that his welfare benefits were to be stopped were found next to his body.

Paul Willcoxson, 33,Who had mental health problems was found hanging in Pignals Enclosure, near Hollands Wood campsite.A suicide letter and next of kin note were found in which he expressed concerns about the cuts to his benefits.

Leanne Chambers,30, Leanne Chambers body was found in the river weir five months after she walked out of her home she had battled depression for a number of years and had taken a turn for the worse after receiving a letter telling her she had to be assessed by a doctor she did not know, to see if she was fit to return to work.

Christelle Pardo,32 and Kayjah Pardo 6 months, After having all her income cut off and her housing benefit withdrawn, and with a baby to care for, she had been left destitute. When she begged for help the only response from the DWP was that she didn’t qualify under the rules,So she killed herself and her young child.

Elaine Christian, 57, was found in a drain after walking out of her home. A post mortem revealed she had died from drowning, despite having more than ten self-inflicted cuts on her wrists.The inquest in Hull was told Mrs Christian had been deeply worried about a meeting she was due to have to discuss her entitlement to disability benefits.

David Groves, 56, died of a massive heart #attack the night before his medical assessment as he sat at his computer and scoured the Internet for ways to raise cash in case he lost his entitlement.

Mark and Helen Mullins were found lying side by side in their home after committing suicide together.They had been left destitute after Helen had her claim for benefit turned down,they had no food, no heating and no electric.

Linda Knott, 46, had worked as a supervisor at the Brierley Community Centre in Little Hulton for 16 years before it fell victim to spending cuts.The news tipped her into depression and she had already taken an overdose of pills eight days before she was found hanging at her home in Walkden.

Jack Shemtob, 53 jumped to his death from his office building after human resources told him he was losing his job as part of the governments cost cutting programme.

Stephen Hill,53, Died of a heart attack a month after having his benefits were stopped, after being told his heart problem were not serious enough to stop him working.

Craig Monk, 43,was found hanging in his home, he had a a partial amputation of his leg and was described by his family as “vulnerable” he became depressed that his benefits had been cut.

Martin Rust, 36,a schizophrenic had his benefits cut and was ordered back to work.He left a note saying: “To those I love, I’m sorry. Goodbye.” Coroner William Armstrong said the DWP’s decision “caused distress and may well have had an adverse effect”, recording that Mr Rust had committed suicide while suffering from a treatment-resistant mental illness.

Paul Turner, 52 died from ischaemic heart disease – caused, his family claim, by the stress of losing his benefits.He was told his heart problems were not serious enough for him not to work,he died 4 weeks later.

Mark Scott, 46, who suffered from anxiety, epilepsy was left penniless when he was declared fit for work and his benefits were stopped.He died six weeks later in the Southport flat where he lived alone.

Colin Traynor, who was a life long epileptic. He was assessed as fit for work, he appealed, but his parents say he became depressed and lost weight , he died less than four months later,the day after his death his parents found out he had won that appeal.

emily plaid 31 December 2012, 18.39

has empathy left the majority ,or are we afraid of a hatefull minority ,this isnt what we are here for ,to be bullied ,and tormented by mad men

Tony 6 January 2013, 17.28

Emily,it’s the way that the Tory mindset works,Cameron says he hopes to win the next GE and enforce his policies on the poor folk are trying to get by on a pittance,we then have a Lib Dem saying that the £200 winter payment for pensioners should be ended,are they insane !!!
Cameron has as much chance of winning the next election as I have being the first man on Mars,it will be the biggest EVER landslide in the history of elections,trust me.

Tony 17 January 2013, 23.58

Even the Tories are turning against Cameron.

Finally! Exposed! The Deficit Myth! So, David Cameron When Are You Going to Apologise

“A lie gets halfway around the world before the truth has a chance to get its pants on”
– Winston Churchill

As a Conservative I have no pleasure in exposing David Cameron’s deficit claims. However, as long as the party continues to talk down the economy via the blame game, confidence will not be given an opportunity to return. For it is an undeniable and inescapable economic fact: without confidence and certainty there can be no real growth.

Below are the three deficit claims – the mess. The evidence comes from the IMF, OECD, OBR, HM Treasury, ONS and even George Osborne. The claims put into context are:

The last government left the biggest debt in the developed world.

After continuously stating the UK had the biggest debt in the world George Osborne admits to the Treasury Select Committee that he did not know the UK had the lowest debt in the G7? Watch: Also, confirmed by the OECD Those who use cash terms (instead of percentages) do so to scare, mislead and give half the story.

Its common sense, in cash terms a millionaire’s debt would be greater than most people. Therefore, the UK would have a higher debt and deficit than most countries because, we are the sixth largest economy. Hence, its laughable to compare UK’s debt and deficit with Tuvalu’s who only have a GDP/Income of £24 million whilst, the UK’s income is £1.7 Trillion.

Finally, Labour in 1997 inherited a debt of 42% of GDP. By the start of the global banking crises 2008 the debt had fallen to 35% – a near 22% reduction page 6 ONS Surprisingly, a debt of 42% was not seen as a major problem and yet at 35% the sky was falling down?

Labour created the biggest deficit in the developed world by overspending.

Firstly, the much banded about 2010 deficit of over 11% is false. This is the PSNB (total borrowings) and not the actual budget deficit which was -7.7% – OBR Economic and Fiscal Outlook March 2012 page 19 table 1.2

Secondly, in 1997 Labour inherited a deficit of 3.9% of GDP (not a balanced budget ) and by 2008 it had fallen to 2.1% – a reduction of a near 50% – Impressive! Hence, it’s implausible and ludicrous to claim there was overspending. The deficit was then exacerbated by the global banking crises after 2008. See HM Treasury. Note, the 1994 deficit of near 8% haaaaaah!

Thirdly, the IMF have also concluded the same. They reveal the UK experienced an increase in the deficit as result of a large loss in output/GDP caused by the global banking crisis and not even as result of the bank bailouts, fiscal stimulus and bringing forward of capital spending. It’s basic economics: when output falls the deficit increases.

Finally, the large loss in output occurred because the UK like the US have the biggest financial centres and as this was a global banking crises we suffered the most. Hence, the UK had the 2nd highest deficit in the G7 (Not The World) after the US and not as a result of overspending prior to and after 2008- as the IMF concur.

Our borrowing costs are low because the markets have confidence in George Osborne’s austerity plan and without it the UK will end up like Greece.

Yes, the markets have confidence in our austerity plan and that’s why PIMCO the worlds largest bond holder have been warning against buying UK debt.

The real reason why our borrowing costs have fallen and remained low since 2008 is because, savings have increased. As a result, the demand and price for bonds have increased and as there is inverse relationship between the price of bonds and its yield (interest rate) the rates have fallen. Also, the markets expect the economy to remain stagnate. Which means the price for bonds will remain high and hence, our borrowing costs will also remain low.

Secondly, the UK is considered a safe heaven because, investors are reassured the Bank of England will buy up bonds in an event of any sell off – which increases the price of bonds and reduces the effective rate. Note, how rates fell across the EU recently when the ECB announced its bond buying program. Thirdly, because, we are not in the Euro we can devalue our currency to increase exports. Moreover, UK bonds are attractive because, we haven’t defaulted on its debt for over 300 years.

David Cameron would like people to believe the markets lend in the same way as retail banks lend to you and I.

Overall, when the facts and figures are put into context these juvenile deficit narratives and sound bites (“mere words and no evidence”) simply fail to stand up to the actual facts. The deficit myth is the grosses lie ever enforced upon the people and it has been sold by exploiting people’s economic illiteracy.

So, David Cameron when are you going to apologise?

Cameron is playing the blame game to depress confidence and growth to justify austerity. Secondly, to use austerity as justification for a smaller state to gain lower taxes. Thirdly, to paint Labour as a party that can not be trusted with the country’s finances again. Therefore, we Conservatives will win a second term because, people vote out of fear. The latter strategy worked the last time in office (18 years) and will work again because, in the end, elections are won and lost on economic credibility. Hence, as people believe Labour created the mess they won’t be trusted again.

Finally, as the truth is the greatest enemy of the a lie I urge you to share this on Facebook, Twitter, blogs, text and email etc etc. So the truth can be discovered by all. Finally, have no doubt, people have been mislead by the use of the following strategy:

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it” Joseph Goebbels

Claire 24 January 2013, 13.17

Debbie says “We’ve, all heard stories about people coming here, given a house and benefits.”
No, I haven’t personally but then I don’t read the Daily Mail and the Express. Just because it’s in the papers doesn’t make it true. And hearsay is even worse. Does the carer’s mum know that the property is owned by the council – could be a private landlord who can rent a home to whoever they want.
There is NO WAY that the council would house a family who had ‘been in the country one week’ unless they’d already been on the waiting list for years, and had sufficient points to qualify, and strong links with the area. Which would mean they hadn’t been in the country for one week. If they’re asylum seekers then the council won’t be housing them either – that will be the UK Border Agency of the Home Office who is responsible (perhaps the HO owns the house?).
Is it time for Red Pepper to do a ‘myths about housing’ article perhaps?
So sorry to hear about your problems, Debbie. Makes me mad to hear your experiences, but foreign-born people are not the cause of your problems, I think you know that really.

R 29 March 2013, 11.18

My heart goes out to you and other disabled people being clobbered in this way. I used to be in a similar position tho not as badly disabled as you. Luckily I grew old enough to be a pensioner – which seems to be your best bet. Wish there was something I could do, sad there isn’t. Perhaps you should write or email what you said to Cameron if you haven’t already.

Must say I appreciate my pensioner benefits a lot more after reading this page, I didn’t realise I was so well off!

R 29 March 2013, 11.19

Comment above was with Debbie in mind of course

Comments are now closed on this article.

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