Does the UK make up 7% of the world's welfare spending?
17th Jun 2015
"This country faces a very simple choice. We've got 1% of the world's population, 4% of its GDP, but we undertake 7% of its welfare spending."
George Osborne, 17th June 2015
It produced 3.5% of the world's GDP in 2013 using the "current prices" measure of GDP, although it has a smaller share of 2.4% if accounting for the actual value of what it produces using the "PPP" measure.
When initially asked for the source of the 7% figure a Treasury spokesman reportedly said it came from internal analysis. We were disappointed with that response—ministers should be able to back up claims like this one with proof.
There are a few things about that estimate that should be considered.
The Bank calculated that 7.4% of the world's social protection spending was in the UK in the period from 2004 to 2009. That's long enough ago for the UK's share to have changed, either because of changes at home or abroad.
The figure is based on 96 countries out of 192 UN member countries, so doesn't necessarily tell the full story. The UK may have a smaller share once spending by countries such as Canada and Mexico are factored in.
The definition of social protection being used here includes "benefits related to sickness and disability, old age, survivors, family and children, unemployment, and housing." That's a wider group of benefits than is being considered for cuts. It includes the state pension, for example, which is to be increased.
It's unhelpful to use figures like this one to frame the debate about planned reductions in welfare spending, as with the claim that the welfare budget is 220 billion.
This piece was updated after the Treasury confirmed it was using the World Bank data we had originally discussed.
We've also included more detail on the limitations of that data, following feedback. Specifically, we hadn't previously mentioned that the data only covered 96 countries.