Yahoo News The Government has just reminded us how poor Britain really is
Another week, and another rushed government proposal quietly falling to pieces. This time, it’s the plan to hike the cost of a family visa to £38,700, in line with the skilled worker visa.
Yesterday, a very quiet announcement from the Home Office clarified that actually, the “initial increase” is only going to be to £29,000; there is no timeline for when, if ever, the supposed final figure will ever be hit.
Even when James Cleverly first announced this package of measures to reduce legal immigration at the start of the month, there were obvious problems with it.
For starters, £38,700 remains well below the rate recommended by the Migration Advisory Committee for long-term visas. In 2015, they suggested the fee be £41,500 – or just under £55,000 in today’s money.
But what made this climbdown inevitable is that in scrambling to get something announced, the Government apparently didn’t think about how it would affect the families of British citizens already here.
Cue an understandable outcry about the prospect of people having to leave the country because they couldn’t afford to stay here, and much fulmination about how (to quote former MP Gavin Barwell) “morally wrong and unconservative” it would be “to say that only the wealthiest can fall in love, marry someone and then bring them to the UK.”
Even as a narrow question of immigration policy, it doesn’t seem unreasonable that there be some minimum requirements for issuing a spousal for family visa – at least, say, that there will be no additional demand for the welfare state.
Without one, the whole idea of immigration control becomes a bit of a fiction. If issuing a skilled employment or student visa automatically means admitting one or more dependants, the net benefit to the UK of issuing that visa has to account for everyone that it admits.
But the row actually illustrated a much bigger problem, though few of the pontificating policymakers seemed to realise it. All the fuss about the number of people affected by the new threshold exposed just how poor a nation this country is becoming. And as the Q3 GDP data reveal, our economy is grinding to a halt.
Imagine being in Barwell’s position – peer of the realm, formerly a senior advisor to a prime minister – and describing an income of £38,700 as “the wealthiest”. Wouldn’t that make you stop and think, at least for a moment?
It’s not that his claim was wrong (although he was exaggerating a bit). According to the latest HMRC data, in 2021 a personal income of £39,000 before tax put someone in the 74th percentile. That is, they were just outside the highest-earning 25 per cent of people in the country.
(I’m using personal rather than household income because this was/is the way the Government plans to set the price on the family visa; the idea is that the worker granted the visa has to be able to support their family on it.)
Even on paper, that feels a bit ridiculous, doesn’t it? But dig a bit deeper and it gets worse.
For starters, that number has barely moved in real terms in over 20 years. The 74th-percentile figure for 1999/2000 was £21,900; according to the Bank of England’s inflation calculator, that sum in 2000 is £39,667 in today’s money.
Then think of all the other things which corrode people’s sense of being prosperous: the runaway growth of house prices, the spiralling rent crisis, the cost of energy, or the fact that childcare is now priced as a luxury good (and government has made informal childcare arrangements illegal), for example.
And don’t forget fiscal drag. As income tax thresholds (unlike pensions) aren’t index-linked to inflation, every year people get sucked into a higher tax bracket even if their real pay hasn’t risen at all.
Given all that, is it any wonder that people earning even very good salaries are outraged when someone suggests they’re well-off? They certainly don’t feel it – and they’re tangibly not doing as well in real terms as someone of their parents’ generation would have been in a similar relative position.
Yet on every level, the fact that the UK is a low-wage country doesn’t seem to have sunk in yet – and that has a terrible effect on our politics.
Consider the Question Time audience member who made headlines in 2019 with his furious attack on Labour’s income tax plans.
Not only did he not think he was well-off in absolute terms, he assumed this must be true in relative terms too. In fact, earning over £80,000 before tax put him at least in the top 5 per cent of earners. But he refused to accept it: “I’m not even in the top 50 per cent!”
What that means is that he thought that there were rich people out there, somewhere, ready to be clobbered with higher taxes – that the day-to-day reality of his financial situation must mean he was relatively badly off, rather than that he lives in a low-wage country.
How many other people, in the same boat, make the same mistake? And therefore demand more taxes, and more spending, safe in the erroneous assumption that the money is out there to pay for it?
The fact the UK needs to import hundreds of thousands of people a year just to keep creaking public services from falling over is not, as some frame it, a positive case for immigration.
Dig a little deeper, and dependence on immigration tends to reveal much deeper problems about the way this country works. If the Government ever actually wants to bring the numbers down, it needs to start tackling them.
