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Britain 'can afford to keep welfare state'

GOVERNMENT should not be panicked by exaggerated claims over the future costs of the welfare state, according to a report published yesterday by the Joseph Rowntree Foundation, writes Nicholas Timmins.

The study attacks the belief that Britain will be unable to afford a welfare state in the next century unless services are cut.

It rejects the argument that there is a 'demographic time-bomb' ticking away that will produce an unsustainable explosion in welfare costs. While there are upward pressures on spending 'there is still a wide range of choices facing those involved in welfare policy,' John Hills, the report's author, from the London School of Economics, said.

The report came as the foundation launched an inquiry into income and wealth. It will draw on pounds 1.5m of research that it has financed and will look at the widening gap between rich and poor, at taxation and welfare.

The report argues that universal services such as the NHS help the poor more than the rich, because the rich pay more tax to finance them. 'The present system already targets those with lower incomes to a larger extent than often realised,' it says. Cutting such universal benefits to keep down taxes 'is in the interests of the rich, not of the poor'.

The Future of Welfare; Joseph Rowntree Foundation, 40 Water End, York YO3 6LP; pounds 8.50.

Price of welfare, page 19