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Friday, 16th July 2010

Making work pay

Fraser Nelson 9:14am

What is the purpose of the welfare state? To protect British people from unemployment, or to protect them from jobs like fruit-picking and working in Pret A Manger? I listened to Farming Today* earlier, in which they interviewed the Eastern Europeans that we import en masse to do jobs that Brits used to do.

Having done the job myself in my younger days (I come from a part of the world where the October break is called the 'tattie holidays' so kids can dig potatoes), I can attest that it's bloody hard work for a paltry reward. But it pays no less than the minimum wage. Without immigration, we'd be forced to find a proper solution to this problem: that welfare has priced a lot of British people out of this particular market.

But my main complain about immigration (which, to the chagrin of some CoffeeHousers, I'm in favour of) is that it has allowed us to cover up, rather than deal with, such problems. We have not noticed that at least 1 million working-age people have been on benefits since John Major was in power. We'd notice that if there were labour shortages. Immigration makes it easy not only to ignore the British poor, but to ignore huge dysfunctions in the British labour market.

Why, as Ken Livingstone once asked, has he never been served coffee by a Londoner if there are 782,000 working-age Londoners on benefits? The answer lies in the perverted incentives of our welfare state, and our deplorable system of taxing the low-paid to further deter them. Why break your back picking berries, if a fifth of what you earn from it has to pass to the government.

If extra work doesn't mean extra money, or you keep 20p in every extra £1 you earn, why work? That's why Iain Duncan Smith's plans for a 40p in the £1 guarantee are so urgently needed. Making work pay for British low-paid people is the key to dealing with dole and immigration.

With the number of Eastern European immigrants once again on the rise, we'd best sort this problem out before we have another ten years where economic growth serves to suck people in from overseas, rather than shortening dole queues.

* It's amazing what early-morning media delights the parents of young kids are introduced to.

UPDATE: wrinkled weasel makes the point that immigrant labour has long been used for seasonal agricultural work – much of it Irish. I have no graphs to make this point, but it’s recorded in the Glasgow folk song (‘Wha saw the tattie howkers’) which denotes the peculiar ways of the Irish immigrants (‘some o’ them had boots and stockings, some o’ them had nane at a’). At the time, this did lead to tension – and, because the Irish were Catholics, sewed the roots of today’s sectarianism. It stems not in disputes about the Real Presence but simple competition for low-paid jobs, Jets v Sharks. One final piece of tattie howkin’ trivia: it seemed to Scots workers that the Irish would use their left foot to put the shovel into the ground. This is the derivation for ‘left-footer’ which is about the only abusive term for Catholics that The Times hasn’t used.

Filed under: Coalition (2088 more articles) , Conservatives (2311 more articles) , Economy (1021 more articles) , Employment (149 more articles) , Iain Duncan Smith (148 more articles) , UK politics (5405 more articles) , Welfare (256 more articles)

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dearieme

July 16th, 2010 9:24am Report this comment

Bet you weren't allowed to go "tattie howkin'" though, were you? If any of the bright pupils at my school had tried to opt for a spell in the autumn air, there would have been hell to pay.

TrevorsDen

July 16th, 2010 9:29am Report this comment

Sponge Bob Square Pants? - he's my hero; or at least his Squid friend is.

TomTom

July 16th, 2010 9:38am Report this comment

Beveridge intended a system to handle frictional unemployment as people moved between jobs.Welfare Socialism determined people should enjoy a good quality of life when unemployed.

There is a world of difference.

The 1973 Oil Shock is what probably made policymakers believe Work was in limited supply and population would need to be bought off with benefits.

Actually Fraser I think you are completely wrong. We do not need Immigration but EMIGRATION as so often in our history. We have created non-jobs in public services that need to be re-engineered out. There is too much Make-Work Jobs in NHS, Education, Councils designed to occupy the unemployable.

The simple fact is that the workforce is bloated compared to the jobs that are economically viable and we need sub-Minimum Wage workers to restore economic viability and this Coolie Class is typical of cartelisation of labour which requires a "Blackleg" class of Coolies imported to circumvent regulation from HMRC and Lawyers.....and these Coolies can be Indian Engineers or Programmers on Offshore Contracts working Onshore just as much as Fruit Pickers working for Gangmasters

Charles

July 16th, 2010 9:43am Report this comment

I much prefer to wake up to Farming Today than the Today programme...more discussion and real information than the heat and noise of its namesake.

sb

July 16th, 2010 10:17am Report this comment

According to the latest figures, there are 5 unemployed people for every job on the market. It is obvious that people should have more incentives to work than to sit idle. But even if they do want to work, there aren't enough jobs around. So, please stop harping the old neo-classical tune that there won't be unemployment if people were willing to work for less.

wrinkled weasel

July 16th, 2010 10:36am Report this comment

I too come from an area where the student work was land work. In fact, it was Boston, Lincs, where there is now one of the highest concentration of migrant workers in the country.

Let's get one thing straight; there was no golden age of British jobs for British workers. Those who did casual land work in Lincolnshire managed to survive because they also signed on at the Labour Exchange. Indeed it was a part of the "job package" that the gang master would wait outside the benefits office with his van, waiting until you had signed on, and thence to the fields. There was no health and safety, no insurance, no portaloos and no security. It was and always has been exploitative, these days compounded by the stranglehold that the supermarkets have on profits.

And now to my actual point. There is a reason why these migrants flock here; they are used to exploitation, poor conditions and being tyrannised by those in power over them. For them, it is a step up in the world to get a portaloo in the field, rather than the unpleasant alternative back home. They are now contributing to a change in the way Briotish society is run by importing, and tacitly accepting, the kind of micro society that is commensurate with a banana republic.

The result will be social change for the worse, not for the better. We are in the era of the lowest common denominator, where the local councils pander to every need of migrants at the expense of the indigenous population. The change is irreversible.

But nobody complains about the relatively cheap cost of their vegetables, do they?

Nicholas Heneghan

July 16th, 2010 11:26am Report this comment

What is so wrong with the idea of raising the income tax threshold? I have spotted some bleatings that this measure would benefit the better-off as well as the poor (nobody has explained the mechanics of this, though), but what, intrinsically, is wrong with that?

Ian Walker

July 16th, 2010 11:35am Report this comment

The effective marginal tax rates for those on benefits who try and take work are a scandal. When you figure in the loss of benefits it works out as near on 97%.

The solution is to keep paying benefits to low earners, and let them "top up" benefits with earned income.

echo34

July 16th, 2010 11:40am Report this comment

Licking envelopes, picking up litter..

Just get them doing something in return for their benefits, no such thing as a free lunch i remember hearing somewhere.

Maggie Lavan

July 16th, 2010 11:49am Report this comment

"Having done the job myself in my younger days...."
Like many other people of your age or older who worked in agriculture, factories, holidays camps, delivering post, on the bins, for British Rail in their schools and college holidays you had an early introduction to the world of work, how to get a job and the thrill of getting paid for your labours. You would have learnt your place in the pecking order, how to get on with a diverse range of people, how not to give up, how to get up early and arrive on time. You would have picked up all sorts of social and economic skills that would prove useful in future. It was all part of growing up that is missing from the lives of the vast majority of young people today.

Robert Taggart

July 16th, 2010 11:51am Report this comment

Frasey, where are all those extra jobs ? (whether the true figure for out of work working age folk be five or eight million).
Moi ? twenty seven years on benefit, twenty nine years after leaving school (first two years in education).Money - not great, living - easy, why work ? why make work ?? why make us who do not want to - work ??? Society could come to regret it... if we have to work what makes you think we will work constructively ? We will feel compelled to cut corners, to dodge, to weave, to bring chaos where there was order ! Better to let those who want to - work, at least they will do the job properly. You follow ? !

alexsandr

July 16th, 2010 12:11pm Report this comment

ian walker

I thought that what family tax credits were for.
They just arent targetted right.

Victor Southern

July 16th, 2010 12:42pm Report this comment

Fraser - you are right. I just received the history of a small rural school which I attended myself for 3 years long, long ago. The extracts show that many days had poor attendance as children were potato picking. I remember such days myself.

I also delivered newspapers, worked in a factory making aerial components and washed up on Friday evenings at the Savoy Hotel. I suppose those all have to be done now by immigrants [except perhaps the newspapers]. Courier deliveries to my son's businesses are now almost all done by Poles, Lithuanians and Latvians.

Meanwhile we have a million or two young, fit people who are unable to "find work". Not all of those have degrees in media studies or sports management so they should be able to take menial jobs.

Verity

July 16th, 2010 12:54pm Report this comment

Fraser writes: "(which, to the chagrin of some CoffeeHousers, I'm in favour of). Chagrin? Chagrin? You surely cannot imagine that you hold an important enough spot in any of our minds for any of your thoughts to produce chagrin ... I doubt that anyone here felt the mildest chagrin even when you failed to follow through on your promise to write a piece on Neathergate.

AndyLeeds

July 16th, 2010 1:00pm Report this comment

The plain fact is we need radical reform not just of the whole welfare system, but also the tax system. One idea maybe to integrate the two things together.

But you have got to question why, with 2 1/2 million unemployed there are so many foreign workers. Most staff in cafes I go into are not locals; the cleaners at the gym are from Poland etc, etc, etc. These are jobs local workers can and should be doing. Like I say lets have reform.

George Laird

July 16th, 2010 2:13pm Report this comment

Dear All

“What is the purpose of the welfare state?”

To stop, the general population from engaging in crime and civil disorder!

It also free up prison places for those in most in need of them.

Mind you, if you think about it, prison on the face of it might not be a bad career route for the disadvantaged.

Free food

Free board

Free dental

Free medical

No prescription charges

Free higher education to degree level

No council tax.

No domestic bills

Free leisure facilities

No pressure

Fraser said, in his youth he went tattie picking, how very enterprising of him.

Would he want to do such a back breaking job now?

In my youth I did volunteer work for free for years, treated like dirt for it.

Does he think we all have a place in society?

Is it that some of us should accept in this corrupt society that we should aspire to be menial?

The poor don’t have hope and aspiration in Britain’s ghettos.

Meritocracy doesn’t exist for poor people and neither does opportunity.

Of course, he raises immigration, Johnny Foreigner comes here and does the jobs that ordinary working class don’t want.

It is because they are migrant most don’t intend to stay, they earn more here than aboard, stay in over crowded flats and bale out once they burn out.

Who is responsible for unfettered immigration?

The Labour Party.

But what about everyone’s new shiny ‘coalition of the damned?’

Have they taken the immigration debate to Europe because it is there the problem must be solved!

Remember the tripe of ‘British jobs for British workers’ espoused by Brown, the article hints at this concept without actually saying it.

Is not time to face facts, society has failed a large section of the population.

It is this crowd that Iain Duncan Smith is looking at.

So, the question is this, how to give people a stake in society who haven’t benefited from the good years and certainly won’t from the bad coming.

The reason for lack of action and paper trails is petty jealous, this has stalled help from getting to those in society who need it most.

Those with a lot despite those who have nothing, for them it is not enough to be doing well, those below them must be suffering to help them feel better about their position.

So, what will be the traditional Tory response to this problem?

The stick, it has the advantage of be quick, policy lite and helps maintain the status quo.

If the Tories are serious they must make those who society has failed become stakeholders.

Iain Duncan Smith would be better coming to see me and put my ideas into effect.

Yours sincerely

George Laird
The Campaign for Human Rights at Glasgow University

Neil Wilson

July 16th, 2010 3:27pm Report this comment

It's not a fifth. It's about 70%

20% income tax
11% national insurance
39% tax credit clawback.

Don't ever forget about national insurance - which is just a hidden regressive, non-relievable income tax. That's what they want you to do.

Neil Wilson

July 16th, 2010 3:32pm Report this comment

Of course the simplest way to make work pay, is to ensure that everybody gets unemployment benefit all the time, and then recover it via the standard tax system.

That way nobody's income drops to zero ever and you can scrap the minimum wage.

The tax credit system tries to do this, but does it in such a cack handed bureaucratic way that defeats the object.

denis cooper

July 16th, 2010 4:00pm Report this comment

Obviously being allowed to keep 40p out of every £1 earned would better than being allowed to keep only 10p or 20p, but it's still too low in my view. And "at least half" seems a simpler and more memorable formula, and likely to act as a more powerful incentive.

Osred

July 16th, 2010 4:19pm Report this comment

Unemployment would virtually disappear for the indigenous population if Income Tax was abolished for those earning under £12k pa. or so. This would encourage many to take on not one but two low paid jobs and make it worth doing so.

Marcher Baron

July 16th, 2010 4:33pm Report this comment

"why make us who do not want to - work ???" Ah, Robert, why make people like me (who do pay taxes) pay for you to live in idleness?

HairyNoddy

July 16th, 2010 7:36pm Report this comment

The fact is we could afford to pay people more to pick potatoes if so much of the tax take wasn't hived off to pay benefits.

There might be a point to working for minimum wage if the cost of living wasn't so high. How much is an average terraced house these days? Unless you live in an ethnic / socialist slum you're looking at £70,000. What chance has anyone on minimum wage got of being able to buy at those prices? So anyone on minimum wage is by default trapped in rental housing. Anyone seen the price of meat recently? Anyone compared the price of meat here with that overseas (US for example)? Why are we paying through the nose for this stuff?

Robert Taggart

July 16th, 2010 7:44pm Report this comment

re: Marcher Baron.
Because we both like things the way they are ? Keep up the good work !

sky9

July 16th, 2010 8:17pm Report this comment

I keep going back to the suggestion that I made some time ago, pay everyone say £5000, pay no tax until say £10,000 and gradually increase the level in a progressive manner. We don't need tax bands, just a simple graph with income on the x line and tax paid on the y line.

Victor Southern

July 16th, 2010 11:36pm Report this comment

Robert Taggart is surely practising irony here. Nobody could be such a blatantly useless sponger and admit it.

Praxis Juncture

July 16th, 2010 11:56pm Report this comment

there are jobs, and there is competition for jobs

its simply a myth that the poor don't want to work

http://www.ripleyandheanornews.co.uk/news/Hundreds-queue-for-job-at.6418384.jp

Praxis Juncture

July 16th, 2010 11:57pm Report this comment

@sky9

Basic Income Policy.

Colin Cumner

July 17th, 2010 12:01am Report this comment

The original purpose of establishing the Welfare State was to assist those who through no fault of their own were without work or income (such as illness or death of the family's main breadwinner). It was never designed to provide an alternate lifestyle for those who, though fit and able, had no intention of working to provide for their families. Decades later Britain is now paying the price for the extreme largesse of the State that now includes taking care of those who have flocked to the country and not paid a penny in National Insurance contributions. To continue along this path is a sure recipe for disaster. It is to be hoped the present Coalition will drastically overhaul a system that cannot possibly be sustained into the future.

Major Plonquer 1

July 17th, 2010 4:01am Report this comment

(I come from a part of the world where the October break is called the 'tattie holidays')

In which case you'll agree that what's happened to the Labour Party over the past few years can best be described as a 'broon coo'.

GeoffM

July 17th, 2010 7:00am Report this comment

We here so much about how we couldn't survive without immigration - who would do all those jobs eh?

We, if we didn't tolerate welfare dependency we could. If we trained our own people properly we could. If we didn't pay slave wages we could.

The problem with mass immigration (well, one of many) is that you import people to do the low grade work, they breed, their children don't want that work, so you have to import even more.

That just inflates your population, creates societal breakdown/conflict and doesn't actually deal with the root of the problem.

Its just a sticking plaster.

We need to change expectations. Encourage young people to take up this work, make welfare recipients do some community work, students to take up holiday jobs, get Indian Restaurants to train British cooks and not import people. Get serious about apprenticeships/training generally.

We cannot carry on like this.

Minnie Ovens

July 17th, 2010 9:42am Report this comment

To say, rather benignly, that you are in "favour of immigration" is a rather obtuse and generalized statement, the reasons for which should be supported by further explanation.
The trouble with one off remarks like this is that it tends to diminish the effectiveness of some well made points in the article.

Minnie Ovens

July 17th, 2010 10:00am Report this comment

TomTom
July 16th, 2010 9:38am

Good points.
Let me add that, compared to 1945 or 1960, this country is exceptionally bloated in its work force.
One efficient person will not do if ten inefficient can be employed doing the same job.
This may seem to be a good short term solution; bringing in outside workers to do the jobs that the unemployed, benefit masses should be doing.
This will be a growing problem as the tectonic plates of global commerce continue to favour those countries gifted with a lean machine, a well run government and long term objectives.
Meanwhile the EC and Westminster will continue to pile increasing burdens on whatever businesses we have left in order to make certain we all become uncompetitive together.
One looks at the present state of Europe and one can see the signs of decay appearing which precvailed in the fall of the Roman Empire.
Hopefully Germany, who seem to be more aware of the dangers may, yet again, make some sort if Lutheran stand.

Robert Taggart

July 17th, 2010 4:54pm Report this comment

re: Victor Southern.
Correct... up to a point... the person behind RT be as RT... take it from me !

Luddite

July 18th, 2010 8:02am Report this comment

Take the low paid out of tax altogether. Stop taxing overtime for everybody, that would go a long way in making work pay.

maddy1

July 19th, 2010 5:20am Report this comment

I too come from an area where the student work was land work. In fact, it was Boston, Lincs, where there is now one of the highest concentration of migrant workers in the country

Wrinkled weasel, Lincolnshire was good at one time for the working student! Watching the peas go by! A tax free salary, plus a grant, and the guys (no girls!) were talking about buying their stereo or new banger. Read so much on those twelve hour or fourteen hour change over shifts, Sartre, Zola, Hardy stuff you do not get at university, today!

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