Wednesday, 3 February 2016
Cameron and In-work benefits.
We're taught that in the Middle Ages scholars spent their time discussing abstruse topics such as "how many angels can dance on the point of a pin?" This was thought to be pretty pointless (pun accidental) at the best of times and particularly irrelevant at times of crisis such as when Constantinople was threatened by the invasion of barbarian (ouch) hordes.
There seem to be to be serious similarities between this situation and Cameron's obsession with in-work benefits for EU nationals working in the UK. Last week I asked a friend who had served in the coalition as a junior minister if he had any idea how much these in-work benefits cost, or what proportion of the social security bill, or of total government expenditure, they formed. He said he didn't know, and the Department of Work and Pensions (DWP) didn't really know either.
One of the complications (spelled out in this Guardian article) is that HMRC (the revenue collecting department, but also responsible for working tax credits) defines a family as "Non UK" if one adult in it is an immigrant (ie even if married to or living with a UK citizen.) So some of this expenditure goes to families which many of us would define as British (or at least part-British)
However, the same article reports the DWP as conceding that "EU migrants on “in-work” benefits cost the taxpayer £530m in 2013." That, according to the article, represents a modest 1.6% of the year’s total tax credit bill.
By my calculations, as the UK's national income is over £2 trillion, that represent about a quarter of one per cent, or £1 in every £400,a little bit more than peanuts, perhaps, though it must be balanced by the in-work benefits, if any (I haven't the energy to try and find out) received by the 1.3 million British nationals living in other parts of the EU.
Whatever the balance is, it is hardly sufficient on which to decide the great issue of whether to remain in or leave the European Union.
While this nonsense is distracting us, Europe, and the rest of the rich world, is faced with the most demanding problem of modern times: how to deal with migration from poorer countries, often made so by conflict. Given modern communications and relatively cheap intentional travel this problem is not going to go away, even if and when some of the conflicts are resolved. Any solution must involve not just European but international co-operation.
And here in the UK we have our own desperate problems, of insufficient housing, low productivity, a yawning balance of payment deficit, a health service stretched beyond its capacity, and growing inequality.
Angels on a pin, or fiddling while Rome burns? It is hard to decide on the more apt analogy.
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"By my calculations, as the UK's national income is over £2 trillion, that represent about a quarter of one per cent, or £1 in every £400,a little bit more than peanuts, perhaps, though it must be balanced by the in-work benefits, if any (I haven't the energy to try and find out) received by the 1.3 million British nationals living in other parts of the EU."ReplyDelete
More to the point, we also have to take into account the tax paid by migrant workers in the UK. This report in 2014 found that European migrant workers in the UK paid £20bn more in taxes than they received in benefits. That's a net gain of £20,000 million.
This issue is a purely political one.