Is welfare 25 or 6 per cent of government spending? Photo: Getty
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People only think welfare should be cut because the coalition is misleading them

The public’s appetite for benefits cuts collapses when voters are offered a more accurate measure of “welfare”.

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Should benefits be cut? The coalition has published tax transparency documents which suggest the government spends 25 per cent of taxpayer money on “welfare”.

When the public are told this, 4 in 10 voters they think benefits are too high. That is more than think them either about right or too low.

This could be used to endorse the Tories’ rumoured plans to cut welfare if re-elected, but the figures have been criticised as disingenuous by the Institute for Fiscal Studies – the authority on every attempt by governments to fudge numbers.

They suggest only 6 per cent of spending is on the “unemployed”. This is what we commonly think of as welfare. Indeed, when the public are presented with the IFS’ more detailed figures on “welfare” spending, public support for cutting benefits collapses.

When offered the IFS figures, the public are equally divided between whether benefits are too high, too low, or about right.

But how do people’s backgrounds shape their views? The most anti-benefits age group isn’t the young or the old, it’s those of ripe working age: the 25-39 year olds. Even when presented with the IFS data, nearly twice as many of these workers think benefits are too high rather than too low.

So do the richest – by 37 to 22 per cent, those classed as “ABC1” think benefits are too high. In contrast, C2DE voters go from thinking benefits are too high to too low when handed the government’s and then the IFS’ figures.

Finally, men and Tories are unstintingly anti-welfare. So richer Tory men of working age are the least likely to sympathise with those of benefits. That happens to all but fit the profile of the man behind the plans. George Osborne is now 43 and falls just outside the most anti-welfare age bracket, but is still white, wealthier and Tory.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.