I suspect the answer is: not much.
Let’s start with some figures. The DWP estimates that spending on welfare benefits in 2008-09 was £134.2bn. That’s 22.2% of all public spending. However, more than half of this was on contributory benefits, such as the state pension and incapacity benefit. This is just (on average) people getting their money back. Non-contributory benefits, at £61.9bn, represent just 10.2% of total public spending and 4.2% of GDP.
For example, income support for the under-60s is just £8bn, or 1.3% of spending. A similar proportion goes on support for poorer pensioners. Housing Benefit is 2.8% of all spending, Jobseekers Allowance just 0.3%.
Cash transfers to the poor, then, are only a small fraction of public spending.
But of course, these are only a part of the link between the state and inequality. Tawneyite socialists claim that spending on (say) health and education are forces for equality.
But are they? Julian Le Grand famously argued in a book in 1982 that the rich actually got more than the poor from these services - a claim supported more recently by the Joseph Rowntree Foundation.
In the case of healthcare, the claim is also supported by this paper (pdf). One reason for this is that the poor under-estimate their ill-health and so are less likely to make claims on the health system. Another reason is that the rich live longer (pdf) than the poor, and the bulk of health spending on most individuals comes late in life.
And it’s quite plausible that education spending is actually for force for inequality, for four reasons:
1. Kids from richer families are more likely to stay on (pdf) at school. This is because they get better schooling before the age of 16. Children of professional and managerial workers are almost four times (pdf) as likely to get 5 or more GCSEs as those of unskilled manual workers are only
2. Education is partly a positional good. This means those with less of it than others might be worse off as a result.
3. Schools can act (inadvertently) as a means of legitimating inequality and hierarchy.
4. Although romantics like to think of schools as a means whereby some kids from poor backgrounds (like me) can escape poverty, they often serve the opposite function. They might be ways of crushing the aspirations and abilities of poorer students, especially if they are black.
Now, I’ve deliberately overstated the arguments here, to pose the question of how egalitarian the state is.
I suspect that, in truth, the key to whether the state is a force for equality rests upon something we cannot see - the counterfactual.
Big government leftists suspect that the alternative to state provision would be little or bad healthcare or education for the worst off. But mightn’t the alternative be instead greater use of charity, scholarships or - better still - co-operative self-provision. (Remember, there‘s a big difference in principle between state financing of public services and state provision).
On this point, I have an open mind. But surely, all leftists should agree that the state doesn’t do as much as it should to reduce inequality. The question is: is this failing a bug, as big-state leftists believe, or - as I fear - a feature?