Britain is still set to hand out £5bn in tax credits to immigrants, despite David Cameron’s crackdown on benefit tourism. Tax credits top up the salary of low paid workers, they are effectively ‘in work’ benefits and can far outstrip the wages of their recipient.
According to the Daily Mail official figures show that 415,000 foreign nationals are claiming tax credits. The total bill is fifty times larger than the savings on benefits for immigrant that David Cameron has pushed through.
As reported on Breitbart London yesterday the Prime Minister put through a number of changes to benefit rules that he claimed ‘put Britain first’. These included reducing the number of months EU migrants could claim Job Seekers Allowance from six to three months.
But campaigners have claimed the government is missing the real ‘pull factors’ to Britain, namely higher wages and those all-important ‘in work’ benefits. Together these enable an unskilled Eastern European worker on the minimum wage to have a significantly better lifestyle than he would in places like Poland.
Recent research by MigrationWatch found a migrant with no dependants earning the minimum wage has their net income of around £184 a week boosted to £254 by tax credits and housing benefit.
If the migrant has a partner and two children, the net weekly income rockets from £184 to £543. This means that state handouts constitute 66 percent of his total annual income of £28,241.
The public rarely take notice of the cost of Tax Credits as many people think they are little more than a tax rebate. This is because they are administered by the company that the recipient works at, not the benefits office. Equally their name ‘tax credits’ do not make them sound like benefits.
In one example cited by the Daily Mail the 17-strong Toma family of Romania is collecting £55,000 a year in state benefits on top of Mr Toma’s £21,600 a year salary. Once the tax free status of the benefits is taken into account he is earning the equivalent of £125,000 a year, far above what he might expect in Romania.
According to figures from Her Majesty’s Revenue and Customs (HMRC) 17 percent of all those claiming tax credits are foreign nationals.
Sir Andrew Green, chairman of MigrationWatch, said: “It is obviously wrong that people who have contributed very little into the system have in principle been able to draw out-of-work benefits indefinitely.”
But he added: “The much more important issue is that of in-work benefits, which are not significant for single workers but are hugely important for those with families. It is something that must clearly be part of any future renegotiation with the EU.”
Robert Rowthorn, Emeritus Professor of Economics at the University of Cambridge and Fellow of King’s College said limiting access to welfare benefits is “unlikely to have much impact”. He said: “The main driver of migration is the big difference in wage rates and job opportunities. There is also the attraction of in-work benefits as a wage supplement.”
Whilst there is a problem with benefits tourism in the UK, most of those coming from Eastern Europe have got jobs and are generally considered hard-working. The problem is there are so many of them they have put pressure on housing and caused unemployment for British nationals.
The surplus of unskilled labour has boosted the UK economy but it has also meant that British people have not gained much benefit from that upturn.