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Tuesday, 25th September 2007

Why British jobs for British workers won't work

Fraser Nelson 1:08pm

As I type, a frustrated cleaner has just come in my room in Bournemouth. To my amazement, she’s English. We get talking about Brown’s “British jobs for British workers” mantra, and it dawns on me that she’s a living example of why it won’t work. She says she’s one of only three Brits in the hotel’s huge housekeeping staff. She’s doing an NVQ in housekeeping, enjoys her work but is still considering going on to benefits as she’s struggling to make ends meet. She lives in a council estate, few of her neighbours work and think it’s strange that she does given she’s no better off than them. But she says she enjoys cleaning “strange as it may seem” and wants to be self-sufficient. She’s been taxed at the emergency rate for six months, and even at the normal tax rate she’s finding it increasingly hard to balance her budget and justify what she does. My thoughts: when welfare financially competes with work, no one should be surprised that 5.4 million British workers rationally choose welfare. It’s an outrage people like her should be taxed at all. Until the incentives change, things won’t improve.

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Comments

Hoi Polloi

September 25th, 2007 3:03pm

And it's an even bigger outrage that the Tories are not expressing outrage over this. After all the number of the 5.4 million who would even contemplate voting Tory will be minuscule and how many of them will be even voting at all. All part of being the vapid, vacuous bunch of handwringers Disaster Dave's "Opposition" is.

Cicero

September 25th, 2007 5:31pm

Hoi Polloi is right on the button imho.

James Strachan

September 25th, 2007 6:53pm

Whether or not these 5.4 million people will or not vote Conservative, they are people. As Fraser Nelson has pointed out, they are as much victims of the system as the taxpayers who contribute to benefits. We need to change the benefits system - but it must be done slowly and with sensitivity because it involves changing the lives of real people, and because many other voters who do not receive benefits are worried about the impact of change on the recipients of benefits. "Hoi Polloi" and "Cicero", who choose to post under pseudoynms, are not helping the Conservative cause.

melanie mclean

September 25th, 2007 11:06pm

Completely completely agree. Those who bother to work to bring home a very low income are gutsy, motivated, self-respecting people who we should be supporting 100% in their desire to work. These are the go-getters, the future entrepreneurs and the individuals we should be encouraging at every turn, not kicking in the teeth with an Inland Revenue tax code. There is an obvious huge cost to the economy of the able-bodied choosing not to work but the overall damage to the UK is actually deeper and more insidious than pure numbers. We are developing a culture where it is perfectly ok not to work, where receiving benefits becomes a "life choice" and where more than just one generation of families have never worked. Wasted lives - tragic for the individuals and, unless we reverse it quickly, a major contributing factor to the UK's ongoing decline.

Fraser Nelson

September 26th, 2007 12:25am

I've just come back from the News International party – and for all the emptiness in the podium the political class (as Peter Oborne would call the assembled politicos, advisers and hacks) are still here in force. There was Gordon Brown roaring with laughter, hugely enjoying himself. And with that YouGov snap poll, no wonder. I knew it was time to leave when I got into an argument about British jobs for British workers – but I blame Melanie, her response to my earlier blog had me worked up. Its clear from my discussions that the government see this as a skills problem, rather than an incentives problem, and ergo are not addressing the steady evacuation of Brits from the unskilled labour market. You don’t need training to pull pints or serve lunch, but you do need an incentive to do that rather than claim dole. This is what’s missing. The English cleaner in my room is about 23, and passionate about how she didn’t want to live on benefits even though she knew she’d be just as well off financially not working. It infuriates me to think how the state still loots her tiny salary each week. Such people are the true heroes of this country, and how I'd love to see a Tory government that unequivocally backs them by lifting them out of tax altogether.

Praguetory

September 26th, 2007 7:08am

It's so frustratingly obvious isn't it, Fraser? Instead George is likely to promise tax cuts on inheritance and share dealing. Our policies should appeal to the poorest in society who suffer most from Labour's failings on crime, education and welfare.

Fraser Nelson

September 26th, 2007 9:31am

Yes Praguetory, it's like the party has forgotten what type of people kept Thatcher in power throughout the 1980s. They are the strivers' party, or they are nothing.

alison

September 27th, 2007 5:48pm

Tips aren't taxed, Fraser. However, I do agree with you on this point - low earners should have much greater tax breaks - is this something Cameron has in mind?

Tim Maycock

September 28th, 2007 3:07pm

I would like to see a doubling or trebling of the personal allowance. Enough to make people notice right away. Even if I had to pay more tax higher up the bands. Remember also that our working people are facing inflated lifetime housing costs far higher than their guest-worker competitors.

Henry B

September 29th, 2007 10:30am

alison and Tim Maycock above have the right idea. I suggest that income up to the minimum wage should not be taxed (about £11,000 p/a). Someone in London on minimum wage would find it impossible to live and find accommodation without state help anyway, so it seems senseless to tax them in the first place. Such a person would currently have a tax bill of £1,638 p/a. The re-introduction of the married couple's allowance would also provide an incentive for at least one half of a couple to go to work (as well as removing the incentive to remain unmarried and for a mother to declare herself a "single mother"). Finally, the expensive tax credit system should be replaced by some new tax codes. Instead of the money being taxed and then redistributed back to individuals as a benefit, a simpler system of a tax code to demark marital status and number of children could allow for the tax rate to be automatically lowered, removing a huge tier of bureacracy. It would not be perfect, but the system would work better than the current one.

Martin Perry

September 29th, 2007 11:04am

Tips are taxable. They are only "not taxed" if undeclared. Here too, excessive marginal tax rates lead to dishonety and a culture which encourages cheating. To encourage work, the personal allowance ought to be significantly more than the annual equivalent of the minimum wage. Furthermore, tips in this case would largely be non-taxable, but would count towards accrual of pension benefits. This would be fair, encourage work and discourage a culture of cheating.

JohnTurner

October 2nd, 2007 11:25am

Sorry to have to say this, but Hoi Polloi is a moron

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