My friend and critic Jonathan Portes obviously took exception to my remarks about Keynesianism having been disproven. His entertaining rebuttal claims to have exposed my misreading of data. That’s not quite how I see it.
I agree with him that the appalling build-up of out-of-work benefits happened before 1997. The Tories badly miscalculated incapacity benefit; thinking it would be a one-off way to help those affected by deindustrialization. But, in fact, it created a welfare dependency trap, and the 1992 recession caught too many people in it.
John Major had an excuse: a recession. Tony Blair had no such excuse. I wasn’t joking about a quarter of Liverpool and Glasgow being on the dole at the height of the Labour boom. In May 2007, precisely 25 per cent of Glaswegians were on out-of-work benefits, and 26.2 per cent of Liverpudlians.
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