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Wednesday, February 10, 1999 Published at 07:53 GMT

UK Politics

What we spend on welfare

Spending on social security, at £95bn, accounts for one third of all government expenditure, but where does it go to, who gets it, and does the budget always have to increase?

What we spend

The social security budget is expected to exceed £100bn by 1999-2000 and social security expenditure has increased by £43bn in real terms since 1979.

The biggest share of social security spending goes to the elderly, followed by the disabled. Only a relatively small proportion of the budget, 6%, goes to the unemployed.

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Spending trends

Spending has been falling as a proportion of national income since 1993. Although we are spending more in real terms on social security, we can afford to do so because our overall national income is growing faster than the increase in spending. Spending on social security peaked in 1993-1994 when it was 13.6% of national income - today it is 12.2% and expected to be 12.1% by the year 2000.

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Future spending

Government plans predict actual spending figures will not increase in real terms as fast as under the previous government. Spending will increase by 1.9% above inflation each year over the next three years (or 3.3% if you include the new Working Family Tax Credit) as opposed to an average of 3.8% over the last parliament.

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Note: from October 1999 the working families tax credit will replace family credit. The tax credit will not appear in DSS accounts. The treasury estimates that spending on the tax credit will be £5.4bn. In 1998-1999 the DSS estimates that £2.6bn will be spent on family credit.

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