The Guardian recently posted an article in their ‘DataBlog’ section which claimed to examine the facts behind our headline claim that 150,000 eastern European migrants pay no more than £1 a week in direct tax.
It is disappointing that despite writing under the tagline “Facts are sacred” the author, Tom Wills is unable or unwilling to look at the issue objectively, and two of his assertions in particular are wholly unjustified.
Firstly, he says that MW ‘has no comparable figure for those further up the income scale who pay higher levels of tax’ , but our figure 2 (see link below) clearly illustrates the whole income distribution for Eastern European employees and shows that only around 4.5% can fall within the higher tax bracket compared with 15% for the whole population.
Secondly, Mr Wills then makes the critical mistake of referring to an ‘academic study by researchers at UCL’ saying that this shows the overall fiscal effect of recent European migrants over a decade was £22bn.
Mr Wills would do better to apply his fact-checking skills to that very paper from CReAM. Its conclusions relied on assuming that everyone receiving means-tested benefits – including tax credits and housing benefit – got the same amount regardless of how much they earned. MW have pointed this out on numerous occasions, and not once has anyone – including its authors – provided either justification or explanation for this obvious error.
MW’s paper focussing on Eastern European migrants shows just how unreasonable this assumption was, by illustrating the significantly lower incomes of this group in particular.
And as for Mr Wills accusing MW of selectivity, the CReAM claim of a £22bn contribution from recent European migrants was the epitome of selectivity, as their findings were actually of an overall cost of nearly £100bn from all migrants in the period 1995 -2011 – and as the BBC pointed out in their own look at the CReAM paper, this was nowhere to be found in the text of the paper, let alone their press release.
MW make no apology at all for seeking to look more closely into the actual facts of migration and expose the facts to scrutiny and genuine debate.
Finally, quite apart from its far from dispassionate tone, a large part of Mr Wills’s post is devoted to us not being available on tap to answer his questions. For the record, we spoke to him on the phone on the evening of the 30th April and followed it up with this email below which clearly explained the basis for the headline ‘150,000’ figure:
Thanks for contacting us and asking about the estimate of 150,000 paying no more than £1 a week tax. We have revised paragraph 12 to include the number of East Europeans represented in figure 2.
Our press release was actually a very conservative estimate because £1 a week is the maximum net tax paid, it relies on the individual being a single adult and on the individual earning the full £221 a week. The 23% figure is for all employees earning £221 or less and as we say in paragraph 12 one in six workers were getting half this amount. In addition, if the employee is not a single adult but in a household with dependents they will be net benefit recipients (even at much higher income levels). This is entirely consistent with the ONS’s paper on the effects of taxes and benefits on household income (June 2013).
Of course direct taxes paid v direct benefits received are just part of the picture but the wider overall fiscal cost has already been looked at. This blog by Prof. Rowthorn from Civitias is a useful overview of the recent papers on fiscal cost http://www.civitas.org.uk/pdf/rowthorndustmannfrattini.pdf