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:-