John Redwood

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Wokingham Times

1 November 2007

The revelation that the government had got its numbers wrong over how many people have come to the UK and have taken jobs here came as no surprise to those of us who have been watching what has been happening. The government had to admit sometime ago it massively underestimated the numbers of eastern European arrivals when the new members joined the EU. Now they have to admit they had understated the total figures by at least 300,000.

        Some migration is healthy, and some families want their loved ones to be able to join them. The difficulty comes when the numbers arriving are so large we do not have the homes, roads, hospitals or schools for them all to use. Every day brings me more emails or letters from constituents who do not want the greenfield near them built on, or the neighbour’s house replaced with flats. People feel under  too much pressure, and it is places like Wokingham that are made to expand as the numbers of new arrivals grows.

      Worse still is the news that 5.4 million people of working age are still living on benefits with no job. Some of them are too disabled or  ill to work, but most are not. We have watched as these high levels  have remained high despite all the new jobs created in the economy. Many of the new opportunities have been gratefully taken up by the new arrivals.

       It is a case where the government should look at how Bill Clinton solved the same problem in the USA. His administration took the Wisconsin experiment and made it nationwide. They offered people on benefit some continuation of benefit if they took a job, phasing it out over time. They gave incentives to private sector employment companies to find the jobs, rewarding them if someone came off welfare and stayed in a job for a specified period. The combination of incentives to the benefit recipient and to the jobs specialist was backed up by the ultimate threat of withdrawal of benefit from people who were capable of work but turned down sensible jobs.

      The government here says it wants to reduce the large numbers of people without jobs. The Prime Minister talks about “British jobs for British workers” yet his government has presided over the creation of “British jobs for migrant workers”. It is time for a new way of doing things. For once we do know the answer. The fact that it came from a Democrat President rather than George Bush should make it a bit more palatable for this government to take it up. It is a policy the Opposition is now recommending, as it is high time we cut the costs of  unemployment to the taxpayers.

     As we do so, then the government could give back to people setting up and running their own businesses the excellent Capital Gains Tax relief they introduced some years ago. One of this government’s best policies was the taper relief on capital gains if you set up and ran your own business. It was an excellent incentive to people to become entrepreneurial, and it would be sad to see it go next April. If they do take it away in future years there will be fewer small businesses, more people without jobs, and less tax revenue.