Liz Kendall has announced the Government’s new package of welfare reforms, vowing to help people back into work and reduce their reliance on state benefits.

She was right to acknowledge that this is a problem. You might be wondering exactly how many Brits rely on the state. The answer can be found in the Adam Smith Institute’s inaugural State Reliance Index.

A staggering 52 per cent of British adults are, in one way or another, reliant upon the state for their livelihood.

This figure includes those who receive the State Pension or Universal Credit, as well as those employed directly by the Public Sector.

That’s alongside students in Higher Education, who have mostly taken up maintenance loans and those who work in sectors of the economy which have significantly grown due to the ever-expanding reach of the state.

These figures should be ringing alarm bells across government.

They reflect the increasing involvement of the British state in our economy since the Covid-19 pandemic – since 2020 alone, economic inactivity in the UK has risen by more than 900,000 people, with 85 percent of this increase coming as a result of those who report themselves as long-term sick.

But the increasing involvement of the state in our lives is not just the product of ballooning sickness benefits.

Many of the state’s huge spending commitments are the result of demographic trends, such as our aging population. The state pension is the largest single item of welfare spending. Tinkering with other benefits whilst refusing to reform this simply will not solve the problem.

Even more worryingly, thousands of working people in Britain today are employed in sectors which would simply not exist without the involvement of the state. Since 2018, the proportion of the UK workforce employed directly by the public sector has increased sharply.

A smaller, but still significant, proportion of the workforce is employed in fields which have significantly grown primarily as result of our complex tax code and regulatory rulebook.

As regulators and quangos continue to create new rules by the day, businesses are forced to invest more money into compliance and human resources professionals. Between 2011 and 2021 the number of HR jobs in the UK grew four times faster than jobs in the general workforce.

In effect, rather than investing in research or employing skilled sales professionals, many firms are now forced to invest in roles which enable them to deal because of the state’s ever-expanding involvement in our economy.

For those looking to address the UK’s productivity crisis, this is a good starting point – none of these jobs contribute towards the creation of new wealth.

The aim of this research is not to demonise individuals who rely on the state for their livelihood. There are many legitimate circumstances which could lead a person to rely on Universal Credit.

Likewise, many of those who claim the State Pension today have worked as productive taxpayers throughout their lives. Many public sector employees work hard to serve the national interest

However, our findings underscore the enormous political challenge which faces those who believe that the state should ‘tread more lightly’ in our day-to-day lives.

Attempts to scrap the unsustainable pension triple-lock, reduce benefits, or scale back the number of public sector employees will be met with fierce resistance from those who rely on these income sources to make ends meet.

But the alternative is more taxes on already-squeezed working-age people, at a time when wages are stagnating and costs are rising. This is simply not sustainable- and it’s not fair.

Those who power our economy through their hard work deserve better than an economic system which treats them as little more than cash-cows.

It’s time to start rolling back the frontiers of the state once more, liberating millions of hard-working Britons from pervasive overtaxation.

Sam Bidwell is Director of Research at the Adam Smith Institute and the author of the report