How UK's disability culture began when Thatcher tried to rig unemployment figures

Between 2002 and 2024, the number of people on disability benefits increased from 3.9 million to 6.9 million but the rising numbers can be traced further back to the 1980s Conservative government

What is the purpose of the welfare state? Fifty years ago, it was not a difficult question to answer. People still marvelled at a network of post-war institutions created to address Beveridge’s “five giants” of disease, squalor, want, ignorance and idleness.

Appreciation was high and demands limited. Over time, as memories faded, that balance inevitably changed. New rights were established and asserted. The founding theory of a safety net was gradually replaced by a rising bar of entitlement.

By and large, this was a healthy evolution of expectation. As the wealth of society increased, so too should the protections offered to those who needed them. Equally inevitably, the lines between need and entitlement became blurred, posing a problem which any government would eventually – and repeatedly – has to address.

The theory of welfare as a protection against unemployment was critical to the system’s principles. Those who could not work for reasons of health or disability must be cared for and supported while the unemployed would be protected through benefits as a route into work. That distinction was understood, fair and sustainable.

In the 1980s, Margaret Thatcher's Conservative government was desperate to keep unemployment below three million, so encouraged people to claim disability benefit instead (Picture: Tim Graham) | Getty Images

‘Quick-fix politics of the worst kind’

In the 1980s, the government of Margaret Thatcher turned this on its head, with consequences which continue down to the present day. With unemployment hitting three million, their imperative was to keep that number down – and the favoured method was by encouraging a mass movement from unemployment benefit to disability, which was more generous and did not carry the same obligations to seek work.

This created an incentive which has never been escaped from. Twenty years later, the Tory Chancellor George Osborne – by then obliged to address that legacy – described it as having been “quick-fix politics of the worst kind”. In 1982, 14 per cent of the social security budget went on disability payments. By 1997, when John Major left office, it was 27 per cent.

Once established, the trend continued. Between 2002 and 2024, the number on disability benefits rose from 3.9 million to 6.9 million. What was once a short-term political convenience for a Tory government has long since become a fiscal timebomb which any effort to defuse is bound to carry severe political risk, particularly for a government of the left with its conflicting instincts.

Any attempt to tackle the system’s costs and contradictions can be portrayed as an “attack on the weakest”, whether true or not. It is much easier to caricature and attack limitations on the benefits system than to question its merits. Yet it is far from obvious that incentivising anyone to spend their life on benefits actually does them any kind of favour.

Fear and alarm

The problem is, of course, that the lines which define need cannot be drawn cleanly. Cases will always be available which appear to conflict with the case for reform. Yet the fact that almost a quarter of Scotland’s adult workforce is now economically inactive – even higher than the rest of the UK – is surely a problem to be addressed, rather than an inevitability that will continue to escalate, regardless of human or financial cost.

As has become its wont, the Labour government has been pretty inept in communicating messages which underpin that case for reform, allowing critics to spread fear and alarm about actual implications. Only latterly has the wider case for change been made on the basis of hard economic facts – which include a projected increase in welfare spending of 50 per cent by 2030 if nothing is done to counter it.

It would have been far better if the objective of cutting the welfare budget had been clearly linked to the priority of helping people find avenues into work. That would not only address the benefits issue but also contribute to ambitions for economic growth. Most importantly, it would offer dignity and hope to many who now find themselves in the benefits dead-end and want to find a way out of.

There were lessons to be drawn from quite recent Labour history which appear to have been subsumed in the rush to announce policies that required a lot more groundwork and detail before seeing the light of day. And then, of course, there are always the leaks.

Swinney’s pious intimations

When Labour came to office in 1997, welfare to work was one of the major selling-points which carried massive public support. The emphasis was on what was being given rather than taken away.

Everyone knew that moving people out of benefits and into employment was an overdue priority for their own good as well as society’s. That has not changed because folk know the evidence of what is around them.

The idea that Scotland is immune from any of this, as John Swinney’s pious intimations suggest, is hogwash. There seems to be no area of public spending he does not wish to protect and extend – just so long as someone else is paying for it. There is no limit to the number of “economically inactive” people which the Scottish benefits system is eager to fund, without regard for future implications, just so long as the money arrives.

Quarter of adults unfit for work?

Scotland’s labour shortages, we are repeatedly told, are to be addressed by attracting more migrant labour, if only Edinburgh was allowed. While devolved social security spending rises, the budgets for further education and training are slashed. The idea that reversing these priorities might be better for Scotland is ignored because it would involve responsibility rather than virtue signalling.

Are there really a quarter of our adult workforce who are unfit for work? Is it really acceptable that one in six young Scots (as opposed to one in eight in England) are not in work, education or training?

If these are the heights of our ambitions, we are indeed in trouble – and the benefits system alone is not going to get us out of it.