We have written several times before about the problem of welfare to workers – the way in which the UK state effectively subsidises millions of working people’s wages so their employers don’t have to. It isn’t a subject we intend to drop.
So I was interested to see David Green of Civitas looking at the problem this week with working migrants in mind. The debate about migration has long treated work and welfare, says Green, as “mutually exclusive”. The coalition is keen to point out that “access to out-of-work benefits will no longer be immediate” and that newly arrived EU nationals will have to wait for housing benefit “at least until they get a job.”
That’s fine. But the point is that huge amounts of welfare will still be going to working migrants. Say you are working a 35-hour week and earning £250 a week. Your gross income from working is around £12,900 a year (I am using Green’s numbers here). But if you are part of a couple with two children, various benefits will top that up by another £11,927.
You’ll get working tax credit (£1,970), child tax credit (£5,976), housing benefit (£2,205) and, of course, child benefit (£1,752).
You may be working, but you are still costing a huge amount in direct subsidy. Does that matter? It depends which numbers you believe on the long-term benefits – or lack of – as a result of immigration.
But either way, the problem – that the taxpayer is obliged to support millions of low-paid workers – really shouldn’t be ignored as regularly as it is.
New to MoneyWeek?
Welcome, and thank you for visiting us.
Here at MoneyWeek, our aim is simple. To give you intelligent and enjoyable commentary on the most important financial stories of the week, and tell you how to profit from them.
If you've enjoyed what you've read so far, I've got something you'll definitely be interested in.
Every working day the MoneyWeek team sends out a hard-hitting email, 'Money Morning', giving you a rundown of the latest financial events, and revealing what you should do to maximise profits and head off losses…
And with your permission, I'd like to send you Money Morning for FREE.
To sign-up enter your email address below.
We hope you enjoy your stay on the site. Good luck with your investments!
Digital Managing Editor, MoneyWeek