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Financing the United Kingdom’s Welfare States

Supported by the ESRC
Publication: March 2010
Financing the United Kingdom’s Welfare States

Professor Glennerster's paper is timely and prescient. Accusing politicians of having an acute "case of myopia", he asserts that to continue to fund the current range of services, reduce child poverty and help the poorest elderly people pay for the costs of climate change will require an additional 4-6% of our GDP over the next twenty years. Adding these estimates to HM Treasury forecasts increases the share of national income spent by government to over 45% by 2020. Yet public tax receipts have rarely been above 40%. In the face of this, Professor Glennerster advocates thinking strategically about which groups can afford to pay more into the welfare state, using partnership models to share costs between the state and citizens, and thinking creatively about how to get services to do more with fewer resources. But the most striking argument Professor Glennerster makes is that even if all of his perhaps unpalatable recommendations were implemented, by 2028 the Exchequer would still need to raise a sum of 2-4% of GDP through general taxation.

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