Over half of households get more from the State than they pay in tax trends now

Britons are more dependent on the State than ever before, a bombshell report reveals today.

For the first time, more than half of households – 36 million people – get more from the Government than they pay in tax, according to a study by Civitas.

This is up from 24 million, or two-fifths of households, when Tony Blair was in power at the turn of the millennium.

MPs said the huge government support provided during the Covid pandemic ‘changed the psyche’ of the country and made people think they can ‘get something for nothing’.

The cost of the nation’s massive reliance on the State is being borne by higher earners, the think-tank’s report found.

The top 10 per cent of earners pay 53 per cent of all income tax, turning the levy – the Treasury’s biggest single earner – into a ‘stealth wealth tax’, Civitas said.

The surge in state ‘dependency’ means the poorest fifth of households receive £17,600 more on average in welfare and non-financial benefits from the State than they pay in tax. 

The findings sparked alarm among senior Tories, who demanded tax cuts to boost growth and a fresh debate about the role and size of the State.

Sir Iain Duncan Smith, the former Conservative leader and ex-work and pensions secretary, said: ‘Lockdown changed the psyche of the British people.

‘For all those years, we told them you can’t get something for nothing, and all of sudden they did. The British public thought the Government could do it all – even pay their salaries and they don’t have to work.’

The Civitas analysis used data from the Office for National Statistics to compare how much tax people pay with the benefits they receive from the Government.

These include cash welfare payments, such as Universal Credit, Jobseeker’s Allowance and the state pension, and non-financial benefits, such as use of the NHS and social care, free school meals and subsidised housing.

The proportion of those who get more from the State than they put in has climbed steadily over several decades, and is higher now than under either Sir Tony or Gordon Brown’s premierships.