Working full time? You could still be costing the taxpayer a fortune
The debate about benefits tends to concentrate on the jobless. But huge amounts of taxpayers’ money are going to people in work.
We have written several times before about the problem ofwelfare to workers the way in whichthe UK state effectively subsidises millions of working people's wagesso their employers don't have to. It isn't a subject we intend to drop.
So I was interested to seeDavid Green of Civitas looking at the problem this weekwith 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.
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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.
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Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
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