"Japan's welfare spending, which includes pensions and health, is expected to reach nearly £888bn in the current fiscal year, around 22 percent of GDP".

In the UK a similar figure for welfare, pensions, and health would be £363bn. Since Japan has a population approximately twice that of the UK, this means that they spend more per person on welfare, pensions, and health (roughly 20% more).

sources:
http://uk.reuters.com/article/2012/01/31...0H20120131
http://www.ukpublicspending.co.uk/year_s...40#ukgs302

Japan has particular problems with an aging population and a decade of stagnation, but it is certainly not the only developed country with higher welfare spending than the UK (northern Europe particularly).

I'm not convinced that the UK economy is geared to directly competing with Malaysia. If it is a competition, then it should not just be about who has the lowest wages and welfare costs, we should be competing to give the general population a better quality of life - that should be the primary aim of all governments.