Another Response To Mr Portes On Taxes Paid By East Europeans

In a series of some 50 tweets Mr Portes (of the National Institute of Economic and Social Research) is claiming that the Migrationwatch estimate that 150,000 Eastern European employees can be paying no more than about £1 a week in net direct taxes cannot be substantiated, and implying that it must be wrong.   In fact it is a conservative estimate of the likely number.

It is mere coincidence that the number reported as paying no more than a pound a week (or actually receiving more in-work benefits than they pay in direct taxes) was about the same as the number of single people in the employee population. But Portes et al have seized on this coincidence to assert (wrongly) that MW are claiming either that this many single people are paying less than £1 a week, or (wrongly and confusingly), that the 150,000 includes two-earner childless couples.

As the table of household composition of employees shows (see figure 1 of our paper), about 142,000 employees were childless singles, 34,000 were single parents, 232,000 were in childless couples and 250,000 were in couples with dependent children.

The figure of 150,000 of these people was a very conservative estimate of the number likely to be a net cost or paying less than a pound a week when direct taxes are compared to key in-work benefits. As our calculations showed, singles on the minimum wage were unlikely to be contributing more than a very small amount even if working full-time, and couples with dependent children were likely to be a net cost even at much higher income levels.

These calculations also clearly showed that two-earner childless couples were likely to be net contributors (at least at the level of direct taxes vs cash benefits) and so obviously there was no suggestion at any point either in the paper or the accompanying press release that any such childless couples were included in the 150,000 estimate. Actually reading the paper shows that the 150,000 estimate can have related and was intended to relate to single people and couples with dependent children, in line with the tables of calculations showing the potential costs of different groups based on evidence from the Labour Force Survey (LFS) as to their incomes. In making these calculations, Migrationwatch use entirely conventional methodology by assessing contributions based on position in the LFS income distribution.

Indeed this analysis goes beyond work that Mr Portes regularly endorses by taking some account of the impact of income on levels of benefit receipt. In contrast, the work he does endorse presumes that everyone receiving a benefit gets the same regardless of how much they earn, which is patently an unjustifiable approach.  It is entirely misleading to attempt to avoid this and 'prove' MW wrong by 'disproving' claims that were never made, and by implying that the estimate included two-earner childless couples when it is obvious that it did not. It is nothing but a straw man. It is also notable that Mr Portes has at no point actually said that he believes the number to be any lower, or presented or pointed to any evidence that might suggest it.

20th May 2014 - Uncategorised

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