September 03, 2013

Fraser Nelson on Polish lady and the welfare trap

Fraser Nelson, editor of The Spectator made comment on work incentives and the welfare trap in Britain. He said:
An 85% tax on the low-paid says about Britain says that we, as a country, are deciding not to use the talents and skills of our low-paid. If it were not for mass immigration, we’d really notice this. The economy would not grow. Employers would be furious. We would have been forced, as a country, to fix welfare 13 years ago. Instead, we are using immigrants to grow the economy instead. Even the Poles think this is madness. Here is a Polish recruitment agent, Iwona Dilinskas, is quoted. If she was 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 80% 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?”
Why indeed? So that’s why the immigrants come. And this endless supply of good, industrious, well-educated workers means that tackling Britain’s welfare problem is seen more as an act of charity than an economic imperative. Iain Duncan Smith has the solution: Universal Credit, a revolutionary new way of welfare which makes sure that workers will keep a fixed share of the extra income they earn. But so little money has been put behind it that UC is aiming – aiming! – to have an effective tax rate on the poor to 65%. Better than 85%, but still pretty bad. The point of Universal Credit would mean it can be cut to (say) 30% – but at some expense. But this aspect is universally ignored in Britain, such is the poor quality of the debate. Last week, the Daily Mirror splashed on an assertion that the poor pay 36% in tax: if only! As their readers know, the real tax burden is far higher – and is crushing the life out of many communities.
Fraser Nelson was quoting a Polish lady who was featured in the Sunday Times magazine in spring 2013. You can see an image of that source below:

Read the original Fraser Nelson commentary here.

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