The folly of the welfare sticking plaster is becoming abundantly clear - Ismail Mulla

It says that Britain has spent £1.1 trillion more on welfare than infrastructure in the past 20 years. Welfare has acted as an “anaesthetic that has kept areas of the country numbed during two decades of economic failure”, CSJ added.

The think tank found that the UK had spent £1.6 trillion on working-age benefits between 2006/7 and 2024/25, far outstripping public investment in transport, science and technology, economic development, housing and community amenities.

That is one giant sticking plaster and the problem with sticking plasters is that they inevitably have to come off. The choice that Britain faces now is whether we rip that plaster off now or wait for it to fall off and leave the wound susceptible to an infection.

We will no longer be able to sustain those that are reliant on the welfare state if enough people are not contributing into the Treasury’s coffers.

The Prime Minister is right to rule out “crude cuts” to benefits but that needs to be met with an unconditional plan to bring down the welfare bill and to invest more of that money into creating opportunities for communities to lift themselves out of poverty.

Britain need only look at its own history and how the country was rebuilt post-war to see the importance of investing in infrastructure. CSJ’s ‘State of Dependency’ report found that between 1945 and 1979, the UK had spent around 4.5 per cent of GDP on infrastructure and 2.5 per cent on working-age welfare. It helped drag a country that could have been hobbled for generations to relative economic prosperity.

However, fast forward to now and the country is spending 5 per cent of GDP on working-age benefits and 2.5 per cent on infrastructure investment. Little wonder that the country’s economy is in a state of paralysis.

As Ben Gregg, head of welfare at CSJ, says “A Britain where everyone has a stake in prosperity is one where good jobs and thriving towns are within reach of every community.

“That is not achieved by writing a cheque and forgetting about people. It comes from investing in these places and removing the barriers that stop businesses doing the same.”

The opposite is currently happening here. Businesses instead are facing increased barriers to creating opportunities and hiring people. That is being acutely felt when it comes to providing young people with much-need opportunities.

A Confederation of British Industry (CBI) survey found that 73 per cent of firms say employment costs were the highest threat to the UK labour market’s competitiveness.

Rising labour costs and employment regulations are squeezing the ability of businesses to create job and training opportunities, especially for young people.

Some 44 per cent of companies surveyed said rising recruitment and onboarding costs were pushing them towards experienced profiles, reducing entry-level openings for young people.

In addition to increased labour costs, businesses have also been buffeted by higher inflation, utility bills and a surge in fuel costs following the Middle East conflict.

It is a bleak picture for businesses and subsequently Britain’s economy. That is why the Chancellor needs to set out a pro-business agenda in his upcoming Budget.

Rachel Reeves made the error of putting the financial burden of fixing social issues on businesses. Instead it has created an even bigger problem that is potentially an even more bloated welfare state.

There has been a lot of talk about delivering growth, both from Sir Keir Starmer’s administration and now Andy Burnham’s Government. But there has been little to empower those that do deliver economic growth.

There are an estimated 981,000 young people aged 16 to 24 in the UK not in education, employment or training (Neet) between April and June this year, according to the latest Office for National Statistics figures. Couple this with an aging population and you realise why that sticking plaster may have to come off sooner rather than later.