The "something for nothing" myth

How should we value people's contribution to the country?

We have a guest post today from Chaminda Jayanetti, one of the best reporters working in the UK at the moment. He writes for the Guardian, Bloomberg, Big Issue, and numerous other places, with a particular focus on public services, the benefit system and the impact of public funding cuts.

I (Sam) have been unexpectedly in hospital all week but I’ll be back on Sunday explaining why and with some thoughts on health policy developed over another week observing the NHS in action.

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Last month Reform announced its plans to crack down on immigration – not just future arrivals, but those already living in Britain. Indefinite leave to remain (ILR) - a legal status that allows immigrants to settle here permanently after five years, would be scrapped and benefits would be restricted to British citizens.

As ethnonationalist extremism takes over whatever now passes for the “mainstream” right, Reform’s announcements marked the point at which it ripped off its rather transparent mask of moderation. Under their policy, instead of getting indefinite residence, migrants – including hundreds of thousands already in Britain – would have to reapply for visas every five years, with higher salary and language thresholds. People living here for decades, with families, could be deported if their earnings are too low.

Nigel Farage claimed this plan to scrap ILR and restrict benefit claims would save the government £234bn during migrants’ lifetimes. The claim was immediately debunked as untrue, as it was based on discredited research by right-wing think tank the Centre for Policy Studies (CPS).

As Jonathan Portes has explained, the CPS straight-up misread the data. The Office for Budgetary Responsibility’s (OBR) analysis on which it relied suggested around a quarter of migrants would be low-income throughout their working lives. The CPS’ calculations, supposedly based on that OBR analysis, turned that one-quarter figure into roughly two-thirds, massively overestimating levels of low-paid immigration and thus getting the estimated impact on Britain’s public finances catastrophically wrong. The CPS turned what will likely be a net fiscal benefit into that £234bn lifetime net fiscal cost.

After its mistake was pointed out by the OBR, the CPS withdrew its own research – though that didn’t stop Reform giving it an afterlife. Indeed, when the CPS’ decision to withdraw its research was pointed out to him, Farage deflected and doubled down, claiming the £234bn figure “is without doubt too low” – a claim based on precisely nothing.

But this framing is not restricted to immigrants. In recent years headlines have frequently appeared based on Office for National Statistics (ONS) data showing that most households are “net recipients” of public spending, meaning they receive more in welfare benefits and “benefits in kind” – public services, in other words – than they pay in taxes.

Unlike the OBR estimates, which try and model cumulative effects over people’s lifetimes, these ONS figures are annual snapshots of who paid and received what during the course of a year. They don’t tell us what happens over peoples’ lives. But that doesn’t stop the press using them to make brazen and misleading claims.