Tuesday, 9 August 2016

Muddled argument for contributory benefits

Ryan Bourne writes a largely sensible article about immigration in City AM, marred by this diagonal comparison:

Indeed, the cost of immigration quotas can be seen with a simple example. Suppose an entrepreneur wanted to come to the UK and had the potential to build a business worth billions. Ludicrously, if he was number 100,001 that year, he’d be kept out.

That is the crassest diagonal comparison I have heard for ages and has no place in a sensible discussion. You could counter it with some nonsense like this:

Indeed, the benefit of immigration quotas can be seen with a simple example. Suppose an violent extremist wanted to come to the UK and had the potential to blow up a building worth billions. Conveniently, if he was number 100,001 that year, he’d be kept out.

There is a killer argument against Citizen's Income that says welfare payments should be contributory, i.e. you can only claim unemployment benefit if you have been working and paying tax for a minimum period and then are made redundant. This is economic nonsense but has a lot of political appeal. Worse still, it is cancelled out by the equal and opposite notion that welfare payments should be means tested, which is also economic nonsense with a lot of political appeal. (I suppose means-testing in turn is largely cancelled out by tax breaks for 'savings' which are also economic nonsense with a lot of political appeal...).

Anyway, returning to the article...

Ideally, this would mean lowering barriers to migration as broadly as possible but making the UK’s welfare system more contributory to avoid any welfare draw factors.

Complete bollocks.

Outside the EU, we can merrily restrict welfare payments to UK-resident British Citizens only (including or excluding immigrants who have been naturalised) or to those who have lived (or indeed worked) here legally for a set number of years, or make up any other conditions that keep the electorate happy. This test can be applied to non-contributory/universal benefits like a Citizen's Income, the right to vote or to use the NHS 'for free' etc.  just as much as it can be to contributory benefits.

4 comments:

Ben Jamin' said...

Odd that he misses the obvious conclusion. Must be blinded by ideology ie a CI is something for nothing, therefore must be bad.

mombers said...

Misses the point that people overwhelmingly come here because average wages are so much higher than most of the world even without any welfare. And anyway, welfare payments are a form of compensation for the reduction in wages that occur via VAT, corporation tax, payroll taxes and finally income tax and NI at end of the death by a thousand cuts. And of course a refund of the portion of VAT that is born by the consumer.
And further, anyone working an claiming benefits is contributing more than a pensioner who is not working but sucking in welfare at a rate of knots

Mark Wadsworth said...

BJ, probably that too.

M, of course! This has little to do with economics and more to do with "politics". AFAIAC, 'good' immigrants come here to work (i.e. half the people at the YPP meet-ups and their spouses) and any welfare they might get is very secondary, there are also 'bad' immigrants who come over here solely in order to claim a council house and live off the taxpayer. Quite what the relative numbers are is irrelevant. So in that sense, I would have no qualms about requiring a minimum number of years* self-supporting residence before you get anything, CI or otherwise.

* Quite how long is another debate.

Bayard said...

"there are also 'bad' immigrants who come over here solely in order to claim a council house and live off the taxpayer" and probably all end up living next to a PWIM.