10 years ago, 1 in 4 jobs in the UK was in manufacturing, today itвЂ™s less than 1 in 5 - a decline of 6 percentage points as a proportion of the workforce. Over the last decade, manufacturing as a share of total output in the UK declined from 14% to 10%. This once great manufacturing nation had given up on the idea of being a world leader in production. The first reason for this economic crisis was that we had become too reliant on financial services. The fact is that debt-fuelled booms feel good while they last, but like all addictions the detox is long and painful. We embraced a culture of вЂњlive now, pay laterвЂќ and looked to future generations to pick up the bill. Interestingly, in Spain, personal debt stood at around only 83% of GDP. That compares to ВЈ9.1 trillion in the United States, equivalent to 120% of GDP. In the lead-up to the recession, the UK accumulated one of the highest rates of personal debt in the whole of Western Europe: around ВЈ1.4 trillion - some 98% of GDP - even before the recession started. Over the years, we seemed to become addicted to debt. Partially fuelled by some policies which encouraged spending over saving and hugely assisted by the incredibly easy access to cheap credit, the public borrowed more than ever before. This runaway government spending was a symptom of a wider problem, of a society built on debt and consumption rather than saving and investment.

Spending on the public sector rose by 68.3% between 19. Our budget deficit was larger than every economy in Europe with the single exception of Ireland and compared to US gross debt in 2010 of 99% of GDP, expected to grow by 12% of GDP over the same period. A country with a debt burden of 75% of GDP which was set to grow by 16% of GDP over the years to 2013, fuelled by one of the largest current account deficits amongst advanced economies. When the Coalition Government entered office in 2010, it faced an enormous problem. It is a pleasure to appear before you today, to share my views on the case for welfare reform in the UK and to offer an overview of the changes I am implementing. Thank you, Chairmen Davis and Tiberi, Ranking Members Doggett and Neal, and Members of the Subcommittees.

Ways and means committee