Monday, 4 July 2011

Unemployed people can't survive on £24k per year tax free?

A letter from Eric Pickles to David Cameron has been leaked claiming that up to 20,000 people could be made homeless and another 20,000 forced to move if the ConDems go ahead with plans to cap benefits at £500 per week.

Erm, £200 per week?  £2,000+ per month (£24,000 per year) tax free for not working and people might not be able to live on it?  What sort of lifestyle does someone have to live to be able to spend more than £500 per week without any of the expense of going to work?  The median average wage in the UK is £499 per week and 32% of that goes to the taxman in Income Tax and National Insurance to pay people not to work.  If someone working full time and earning the national average wage can survive on ~£388 per week after tax, why can't an unemployed person manage on 25% more than that?

The problem here isn't the amount of benefits someone gets paid, it's the amount of people on benefits.  Iain Duncan Smith's laughable plea to companies to employ young people from this country rather than cheap immigrants last week shows that he understands the problem but of course the British government's hands are tied because of the EU.

Cheap foreign labour is abundant because anyone from an EU member state is allowed to come and live and work here.  Average wages in some eastern European countries are 20% of what they are here so it pays to move over here, send money home and you can even claim benefits for the family you've left behind at our expense.  And then there's non-EU immigration which we aren't allowed to cap because the EU said it was illegal.

Giving money away for not working isn't the answer.  People need jobs so they can support themselves without needing a big chunk of everyone else's wages to pay their bills.  There are 2.5m unemployed people in the UK at the moment and 400,000 jobs were created in the last year.  That should have taken the unemployment figure down to 2.1m and saved the taxpayer a good £8bn off the social security bill.  With that extra money in peoples' pockets they could have been spending more and stimulating the economy which creates more jobs but instead 87% of those jobs were taken by immigrants leaving the unemployment rate largely unchanged.

Cheap foreign labour might seem like a good idea to businesses but it's a false economy.  The more unemployed people there are, the more tax the British government needs to pay for them.  The more tax employees pay, the more employers have to pay.  The more money the British government needs, the more tax it will attempt to extract from companies.

UKIP policy is to freeze all economic immigration for 5 years and then introduce a points-based system to ensure we only get immigrants with skills that we need.  This doesn't affect genuine asylum seekers who would continue to be allowed into the country to protect them from danger in their own country.  A 5 year freeze on immigration would allow people already living here to take up the available jobs that are mostly going to immigrants and to house people who already live here.  There aren't enough jobs or houses to go around the people who already live in this country, we don't need immigration.