Friday 25 October 2013

Dividing up the social cake

I want to write about something that intrigues me but for all I know it may hardly be original. There are probably better thinkers than me (can't argue with that) and numerous experts who have looked at this matter but I haven't seen their work. On the other hand I have never seen New Zealand so all that means is I haven't travelled very far.

Anyhow, this is a question that touches on two things: immigration and economics.

That the two things are linked is undeniable. We are told, for example, that immigration is good for the nation and there are huge economic advantages in bringing people here to do the jobs that the indigenous peoples of these islands could do. No, that isn't my argument at all, but it is what we are told though I admit I do subscribe to the principle that we are collectively told a lot of things that aren't quite true.

See what I did there? I stopped short of calling politicians liars.

Anyhow, this is my question: if you import a lot of people, what is the total drain on the economy for those people? Do they incur more cost than they contribute to the welfare of all? Noting that some of the immigrants will work (and arguably pay tax to the benefit of all) I wondered if anyone had sought to discover what is the overall cost of each of the working immigrants' dependents.

If every immigrant contributed to the exchequer you can see there isn't a problem. But, and this is a big but, not every one in the immigrant's family does. So, how much does that cost per person?

Let me explain this way. Immigrant A arrives here and can work. Perhaps he doesn't speak much English though the nation is prepared to provide resources so he can understand what he needs to know. True, this is a cost but theoretically a short term one. As A integrates into the British way of life he learns the language. He gets a job -- possibly relatively low paid -- and duly pays tax.

However, we have a number of problems. A arrives with a family. He has, say four children and a wife. (He could even have two or more wives, for while it is illegal to marry more than one person in this country it is legal if the weddings were done abroad. Hmm, weird...) He may have parents still able to travel, in-laws who yearn to see Britain, a number of uncles aunts and their offspring. It would deny his human rights to say his family can't come with him, but let's say that there is a limit on who is considered immediate family. I will, for the purpose of this, say there is A, Mrs A and four small A's (should that be a's?) and his and/or her parents.

Now the little a's need educating. Mrs A gets whatever allowances are on offer and perhaps the elder members of the family receive pensions and need health care. Actually, they all need health care. They may possibly need some assistance from local social services, they may need a house paid for by others.

In fact, if you start to add up all the costs of this family's presence it begins to clock up an impressive amount. It's not just a one-off payment either. It is an ongoing cost, year on year. The little a's will grow up wanting jobs, but there are only so many available and until then they need to go to college to postpone being on the dole if there is no work, and anyway it isn't unknown for Mr and Mrs A to have another baby. Or two. As the British state pays for more children, why stop there?

Mr A, for the sake of argument, drives a taxi. At this point it is immaterial whether he can legally drive in this country (rumour has it a number of immigrants like driving round without licenses) but I wonder if he does not issue receipts for his passengers, how does the tax system know what he earns?

(On this matter, an acquaintance of mine who had experience of tax matters told me there was, for example, an restaurant in his area that always went bust just before tax was due. The bankrupt business was then transferred to a family member to start again. In short, it never paid any tax no matter how many curries it sold.)

Of course, Mr A pays at the pump for petrol and the government gains the VAT and fuel duty, and there is an amount of shopping done by the family which garners more VAT. Nonetheless, the costs to Britain for having all the A's here far outweigh the income generated by Mr A's tireless work behind the wheel of his taxi.

(I am also by the way aware that it happens when some people like Mr A doesn't feel like work one of his brothers or cousins takes the taxi out, and before you ask they often don't know their way around the town they are in. A relative of mine got in a taxi the other day and gave an address only for the immigrant driver to shout at her because she didn't know the route he should take.)

Anyway, my point is to ask if anyone has looked at the state's payments to this family compared with the income generated for the exchequer for the benefit of all. I think, and I am happy to be wrong, that there is a huge gap between what this mythical family earns and what they take out. Britain, if you like, is in deficit here.

Now I accept that a balanced society will always have people who require more than they can put in. The old concept of insurance is that ten farmers pay into a pot so when one farmer loses a sheep he can be compensated by the other nine's insurance payments. No, I won't go down the road of when one farmer sells his own sheep to fraudulently claim the cash and his mate does the same... That's another argument.

But do we have a balanced society of income and expenditure when we don't necessarily know what the balance is? If the family of A cost tens of thousands more each year than it can earn and there are thousands of families like A, then how can we check? This is not to say that there should be a limit on how much can be claimed as people's circumstances change and their needs alter. But if it is a need that is there from the outset and it can only grow then that makes it more and more uneconomical.

In the long term all six or more of the A children may have jobs and each contribute at the petrol pump, but if they have lots of children too and require benefits then that 'pay back' is slowed. There is incidentally the fear that there aren't jobs for all the A offspring and social dissatisfaction leads to increased costs in terms of insurance payouts for property damage and greater policing, not to say a wedge of legal costs.

I can't predict the future, and much of this may not come to pass. On the other hand I see the number of male immigrant children going to the local school and don't see so many female immigrant children, which is sure to lead to all sorts of different complications in about ten or twelve years time.

What I can ask is here and now what do we know now of all this?

This is one huge subject that I fear many of our politicians can't even begin to grasp. I know I can't, but then setting the economy isn't my job. I receive a pension, to which I contributed for far too many years, but I did it. Not all our immigrants can yet have made much contribution, and they age like the rest of us.

On this last subject of money and immigrants, I need to point out that round my area there are shops who all offer a similar service under different names: they offer transfer of cash out of the country. Many of their customers are not British born and send money overseas to family and relatives. It is, of course, their money and they can do with it as they wish. But you might ask how much spare cash have they got that they can afford to send it overseas, and more relevantly who provided the bulk of that money?

Do we know how much Britain supplies, indirectly, to other nations? Or are we hoping it isn't too much and somehow there are enough people legitimately working and paying taxes to support all this?

What, we should begin to ask, would happen if this easily-and-freely-available money ran out?

Perhaps it is a question that no one 'at the top' dares contemplate. Maybe they are just waiting for their gold-plated pension and then they can high-tail it out of the country and leave us to it.


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