Coffee House

Why the Poles keep coming

16 December 2012

12:26 PM

16 December 2012

12:26 PM

Yes, Britain’s employment figures are strong but most of the rise in employment so far under this government is accounted for by foreign-born workers (as was 99pc of the rise in employment under Labour). The recession has not diminished employers’ appetite for immigrant workers and today’s Sunday Times magazine has a long piece asking whether there is a “fundamental difference in our attitudes to work”. It’s still one of the most important questions in Britain today: what’s the use of economic growth if it doesn’t shorten British dole queues? And should we blame these industrious immigrants; aren’t the Brits just lazy?

I’d urge CoffeeHousers to read the whole thing, but one passage jumps out at me. A Polish recruitment agent, Iwona Dilinskas, is quoted.

In Poland, she says, child benefit is £10 a month for three children. There is no working tax credit or child tax credit. If she were British, she says “I’d probably not want to work more than 16 hours a week. What for? If I work 16 hours or less, they pay 80pc of my rent [as housing benefit]. And all my council tax. I get working tax credit, child tax credit, child benefit. So, to be honest – why work?”

The quality of the British debate is so poor that we almost never look at this from the point of view of the low-waged worker. After every budget, the IFS will dutifully work out if it has been “fair” – ie, gives the most to the poorest. The LibDems will judge a budget by this metric. That’s a nice, easy, simple graph.

But what about destroying the work incentive? Each change to tax should be judged on how many people are then ensnared in the welfare trap. I adapted the below (nasty, complex) graphs from an internal government presentation, which still make the case powerfully.

The bottom axis is money earned from employer and the side axis is income retained. The graphs are worth studying, if only to get a feel for the horrific system confronting millions of the lowest-paid in Britain today:-


And let’s be clear: if I was in a position of a British single mother I have not the slightest doubt that I would choose welfare. Why break your back on the minimum wage for longer than you have to, if it doesn’t pay? Some people do have the resolve to do it. I know I wouldn’t.

The above graphs should be reproduced as an appendix to every Osborne budget, and the question asked: what has the Budget done to reward work? Until our policymakers start to see things through the eyes of those ensnared in welfare traps, nothing will change.

The Poles are not caught in this welfare trap. For then, the work premium is far higher. It’s now 70 years since the Beveridge report we now have a welfare system incubating the very ‘giant evil” that Beveridge sought to eradicate. The above charts would dismay him. If you were to design a system to keep the poor down, it would not look much different to the above.

So let’s not talk about “lazy” Brits. The problem is a cruel and purblind welfare system which still, to this day, strengthens the welfare trap with each budget passed – without the slightest regard for the impact on work incentives fornthe poorest. Iain Duncan Smith’s Universal Credit will help, but that won’t be finished until the end of the decade. Meanwhile, the cash-strapped British government is still creating still the most expensive poverty in the world.

So the question is not why the Poles come.The question is why George Osborne is taking so long to have emergency tax cut package for the lowest-paid, to make sure that ever Brit is demonstrably better off in work. Even the Poles think his failure to do so is madness.

UPDATE The following comment, from Twitter, sums it up:-

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Show comments
  • PaulClieu

    This just shows the poverty of public policy. If a private business arranged its affairs so that most of its workers or most of its customers had no economic incentive they would go bust very quickly. The Government can and does foul up on a massive scale. 25% of the whole population on benefits which probably means close to 100% of those with kids and low earning potential.Sabotaging the work ethic is both stupid and immoral.

  • PeterWol

    Those graphs are rather nice, but it is one thing to state the problem, and quite another to fix it. Of course, the problem is even worse if one takes into account other factors, such as the high costs of getting to and from work by public transport or by car..

    What would one suggest as an optimal set of graphs, which would motivate people to work? And how could one set up a better system, matching those ideal graphs? I have no idea.

    This topic really needs to be studied by experts with high intelligence, perhaps in some sort of think tank. A start would be a historical survey of what was tried in the past, starting with the tough Spartan system, moving though the era of the poor laws, etc. to the present day, and including practice in many other countries.

    Then, various propositions might be made, most of which would be politically intolerable of course, but they should be mentioned. Probably in a book!

    Then, political action. Of course, this is just a dream, but if nothing is done, we may in time be driven to a classical fascist solution, which could be much worse than inaction now..

  • John Ball

    Nothing much will change until we have a property qualification for voting. No UK government wants to upset the welfare class; especially Labour who developed a client vote from these people.

  • Andrew Osborne

    The real question to the above is ‘Why would a Government perpetuate such a self defeating system?’

    …Because Govt is run by Special Interest Groups (Banks etc) who need the £94B in housing benefit to shore up property prices whilst they extract more and more bail out cash from the taxpayer. They don’t care about going bust, it is a means to an end to make good on their investment in credit expansion using the property market (it has been tulips previously, caused by influxes of gold ironically).

  • Serbitar

    Things cannot be this simple. In its first 14 months the flagship Work Programme only managed to drive about 2% of its participants into work. Is the Work Programme’s abysmal failure explicable by a lack of gainful employment? Or are 98% of people on it evil geniuses who want to live on benefits al able to outwit the profit making, private provider organisations, highly motivated by the DWPs “pay by results” regime, from getting them into work?

    What the dense author of this article fails to note is that:

    (1) Work is not homogeneously distributed throughout the UK. There are huge swathes of the country which have a dearth of employment opportunities. Immigrants having no family or other ties within this country are nomadic and tend to congregate in areas where the chance to work is highest.

    (2) Polish (and other) immigrants are often young, fit and active. Such people only want to work to earn as much money as possible and are eager to undertake multiple jobs or shifts in order to do so. Not forever, but for a while.

    (3) Immigrant labour will often accept terrible accommodation, e.g., caravans in fields or several people in a room, because the arrangement is understood to be temporary. Such people would never agree to live like this forever here or in their homeland.

    So you see immigrant labour is for the most part young, fit, rootless, nomadic, highly mobile, willing to accept low standards in respect to accommodation and eager to work all the hours that God sends – for a while. These people would not accept a lifestyle like the one described for long. Nor should they. Even less so our own native born citizens.

    I wish the Spectator would replace Mr. Nelson with someone more numerate, clued in and honest. It does this magazine’s reputation no good to keep printing verbiage like this time and again.