Tuesday, May 12, 2009

He's At It Again

Edmund Conway in the Telegraph on demography and pensions. The man's an idiot. Not only does he take the Dave Osler view of immigrants as tax-producing units and nothing more, he even thinks the chav mothers of the UK will help.

thanks partly to our relatively open immigration policy and partly to a rise in births, Britain's old age dependency rate is set to increase far less rapidly than that of any other major country between now and 2050, according to UN projections.

In and out of wedlock, babies are being born at a higher rate than for many years, and every new child represents another prospective taxpayer to help reduce that bill.

Teenage pregnancies may bemuse nonagenarians such as Gertrude Janeway, and they may cause hand-wringing among social commentators; but in economic terms, they may be the best hope we have for solving the impending fiscal timebomb.

The man's practically certifiable.

Firstly, the underclass kids will all be on benefits themselves in 18 years. The least-educated mothers are the ones having more kids.

Secondly, according to the ONS figures on unemployment by ethnicity, all immigrant groups have lower employment rates than the natives. Now you can blame that on the evil racist Brits, but you can't have it both ways. They can't be at once both poor victims of unemployment AND doing the jobs the natives don't want to do.

Thirdly, both immigrant and underclass members who are in employment are likely to be in low-paid jobs where they cost more in government expenditure than they pay in taxes.

Fourthly, and this is conjecture rather than established fact, I would be amazed if the tax take was the same for all ethnic groups, even when controlling for income. Those in cash trades, taxis, catering etc have far more opportunity to do things 'off the books' than someone working 9-5 for an FTSE100 company. I don't know if the Revenue have done any research (probably not - and if they have it'll be in a locked leadlined safe somewhere), but I would venture the suggestion that as time goes on and the composition of the UK changes, the percentage tax take per economically active person in the UK will fall.

It's a pity his prescriptions are so bloody awful, as his diagnosis is spot-on :

In the 1940s and 1950s, Britain went, via the Beveridge Report, from being a warfare state to a welfare state. We may take the current system for granted now, but it was nothing short of a massive economic experiment, one forged in the shadow of terrible suffering. Moreover, it is a system that has been in operation, in its full embodiment, for less than a lifetime.

Unfortunately, it has been an experiment based on unrealistic assumptions about Britons' longevity and their fecundity. Since the 1940s, life expectancy at birth has climbed from just over 60 years to just under 80. And fertility rates, which peaked at an average of almost three children per family in the baby boom era of the 1960s, have now seen a drop to below two children per family for three decades.
In other words, the cultural revolution kicked in and babies went out along with churchgoing and wearing a tie on weekends.

Until relatively recently, most funds were designed either as defined benefit schemes, with pensioners given a guaranteed payment no matter how much they paid in, or plain unfunded schemes, with pensioners paid from the current account.

Several companies suffer a hangover from large versions of the former British Airways and British Telecom being prime examples. Many insiders fear that before long we could see a major British company taken down by the burdens of its pension scheme.

But these bills are as nothing compared to the unfunded liabilities of the state. By even conservative estimates, the state and public- sector pensions liabilities could more than double the total national debt, causing far more damage than the current financial crisis. The situation is hardly any better in the US, where the unfunded liabilities for social security and Medicare health care for the old are more than $50 trillion.

For all the talk of waste in the public sector, of inefficiency and of profligacy under Gordon Brown, nothing that this Government has done to dent Britain's public finances can compare with the damage imposed by decades of this demographic disaster.
There's a word for financial schemes which take in money, promising a good return in the future, and use the new money coming in to pay existing investors. They're called Ponzi schemes. A characteristic is that they need to recruit more and more new investors to pay the outgoings to the current investors. When the supply of new investors dries up, the scheme cannot continue to pay out and collapses.

Or in Dave Osler's words "Either immigrants keep this country going, or it folds." For 'new investors' in the Ponzi scheme, read 'new taxpayers' paying for some old chap's pension and NHS treatment.

I have wondered for some years about our Government's attitude to mass immigration. Even white liberal guilt seemed insufficient motive for their determination to see the positive side - and not exactly ignore the negative side, but rather deny that there was or ever could be a negative side (and only racists would suggest such a thing).

Maybe they've just been looking at the sums all along, and see mass immigration as the only politically acceptable solution. After all, no-one's going to suggest that we stop killing 200,000 babies a year, are they ?


Ross said...

"Secondly, according to the ONS figures on unemployment by ethnicity, all immigrant groups have lower employment rates than the natives. Now you can blame that on the evil racist Brits, but you can't have it both ways."No no no! Immigration advocates can always have it both ways.

You only use those figure when you want to prove how racist Britain is, when you want to demonstrate what a vital contribution immigrants make to the UK you use figures broken down by country.

Edwin Greenwood said...

"I would be amazed if the tax take was the same for all ethnic groups, even when controlling for income. Those in cash trades, taxis, catering etc have far more opportunity to do things 'off the books'..."

I recall a letter from that ubiquitous and prolific correspondent Name & Address Supplied in, I think it was, the personal finance pages of the Mail. Mr Supplied claimed to be a serving tax inspector and spoke of 'Asian' shops which he suspected of having two sets of books, one of which would record an implausibly low turnover of business and would be used for the preparation of tax returns. He alleged that this practice was rife, and unchallenged.

Also, don't forget that a significant proportion of immigrant earnings is repatriated in the form of remittances. (FYI, the going conversion rate for the naira in Woolwich as of yesterday was 263 to the pound.)

Anonymous said...


I was in the police in the UK for ten years before I fled to Australia to be a copper in the sun. In the UK my pension cost a pretty penny (11% I think it was) and it went into a big pot which was used to pay for current retirees but my own payout was backed by the government …so I thought you can’t get much better than that. Just before I left the new police pension scheme came in which was not nearly as good but seemed to cost the same and the government was desperate to get people to switch over. Talk about asking turkeys to vote for Christmas.

Now I am obliged to pay into a state endorsed (not financed) superannuation scheme so effectively I now own tens of thousand of dollars worth of shares. I pay for my own retirement even though I am a state employee. The UK needs to make a similar switch now. It might be painful but the old saying that “when you’re in a hole stop digging” seems to hold true here.

As for the governments continued enthusiasm for mass immigration, even against the obvious wishes of the populace, I have often thought that there had to be an ulterior motive. Why else would successive governments from both main parties permit such wonton destruction of the very fabric of the country? Who is benefiting from this immigration into the UK? Certainly not the working tax paying Briton who now gets to pay for the housing, benefits, education and healthcare of millions of migrants from the third world, many of whom are illiterate and as such are of very limited use to the UK economy.

As for the welfare state, I used to believe in it when I was young and na├»ve and thought that the majority of people wanted to better their lives and would work to achieve that end. Now I believe that if someone is genuinely incapacitated they should be provided a reasonable standard of living. Other than that social security should only ever be a stop gap measure (even a generous one) to assist people between jobs. The long term scroungers who sit around all day smoking cheap fags and drinking cheap cider should get food coupons only. There are estates in every town and city in the country full of people like that. Millions of people, who don’t work, have no intention of ever working and don’t know anyone who does work. In the past they would have had to work to survive. Now they just have to sign on. The welfare state has created an underclass in every sense of the word. Spongers, uneducated, barely literate and breeding like rabbits provided with money, housing and healthcare all at the taxpayers expense.

That situation is untenable and I fear that in the future we will see significant civil disorder as both groups of spongers compete for dwindling handouts.

Rob said...

"Unfortunately, it has been an experiment based on unrealistic assumptions about Britons' longevity and their fecundity."

It was based on unrealistic assumptions about Britons' HONESTY. It was assumed that the work ethic would not collapse in large parts of society, and that people would see the Welfare State as a last rather than a first resort.

It was a triumph of liberal credulity over experience.

CityUnslicker said...

Laban this is a very good read and fully accurate.

The Ponzi scheme can last another 10 years tops and then, sadly, there may well be blood.

Either the oldies will be left in penury or the youngsters will take to the streets in anger at 70-80% tax rates.

It is such a shame no government can seize the nettle and actually do something, like raise the retirement age to 70.

Anonymous said...

Nick, you can raise the retirement age all you like, but it'll make no difference unless there are also 0,000's of jobs available for over sixties.

Where do you imagine those jobs are coming from?

Homophobic Horse said...

"As for the governments continued enthusiasm for mass immigration, even against the obvious wishes of the populace, I have often thought that there had to be an ulterior motive."

The ulterior motive was the multiculturalism project. Western countries were to be used as prototypes for the universal state.

Premier of Italy Mr Berlusconi said recently:

"“The left’s idea is of a multi-ethnic Italy,” Berlusconi told a news conference. “That’s not our idea”

Previous left-wing governments had “opened the doors to clandestine migrants coming from other countries, with an idea of a multi-ethnic Italy,” Mr Berlusconi said."


Mark said...

'in Dave Osler's words "Either immigrants keep this country going,or it folds."'.
There are countries where vital sectors of the economy are kept going by foreigners, but the UK most certainly isn't one of them. Immigrants may be over represented in the NHS workforce but so what ?-apart from some Filipina employees on short term contracts(and who in any case probably prefer to save and remit their earnings)no NHS employees can be categorised as gastarbeitar. They have their families here, get tax credits etc, and the GPs/hospital doctors among them are now generously remunerated.
The UK does largely rely on seasonal workers from abroad to harvest fruit,veg & flowers- but then so does most of the EU (as far east as Austria)and Israel. In many of these countries furthermore this sector is larger, proportionately, than in the UK.

For countries that really would fold without foreign labour, the places to look are the middle east & Africa. In the UAE & Saudi the construction, oil & gas, and health sectors would collapse without expat or gastarbeitar labour.
The country whose economy is most dependent of all on foreign labour is probably Nigeria (something Edwin Greenwood will find sweetly ironic). Over 90% of that country's foreign exchange earnings are generated by oil and gas. All these deposits were discovered by foreign geologists in the employ of the oil majors. The industry presently is organised around a series of joint ventures between the NNPC (the state owned entity) and the oil majors. The foreign oil majors provide the technical expertise, while the NNPC essentially employs well connected 'big man' bean counters who ensure that Federal government proceeds are properly accounted for (no laughing at the back please). Nigeria itself(a country of 150 million) provides only a tiny percentage of the engineering and technical personnel needed to keep the oil and gas flowing- the rest are imported, even from other 3rd world countries such as the Phillipines.

Anatolie said...

I think that a countrie could benefitt on imigrasion if the imigrans are very skiled and of corse also hard workin. A countrie wil not benefitt on imigrasion if they only let peoples with poor skils and poor work etics in too there countries.

I think that brittain has let the wrong imigrans inn. I have herd a lot of bed things about the polisch imigrans in brittain but at leest the polisch imigrans is hard workin if you were too comper them with for instanse africans and pakistanies.

I think that the brittish system of imigrasion can bee compered with the subpraime morgage scheme. Some peoples has benefitted on it for some time but in the end the countrie wil sufer when the scheme colapses wich of corse sooner or later it wil.

I wonder what wil hapen too the economie in the rest of the world if that hapens.

Anonymous said...

Still you all voted for it.
It is starting to happen in Australia where 'communities' are popping up under the ALP regime.

Would electing hard nosed feminists who might realise that abortions are not good for an aging female population help.

Anonymous said...

Anatolie - are you for real mate?

Is this some sort of Borat shtick?

Laban said...

"Anatolie" has turned up on one or two blogs lately - and I think in the Guardian's Comment Is Free. Seems too good to be true, doesn't he ?

He's the Nigel Molesworth de nos jours. You do wonder if he's the invention of some doughty Guardianista. But if so he's taking it pretty seriously - he's got his own blog.

Anatolie said...

What do you meen Anonymus?

Laban yes i'm very reel but as you probably now sinse you visited my blog i'm not a nativ english speeker. most peoples in this world is not.

An no i'm not workin for the guardien i'm not livin in brittain i'm on the other side of the world in Australia.

I only lernt english about two years ago so excus me if my english is not as perfect as yours at leest i'm trieing to lern.

Anonymous said...

Hey, I was the first to make the Molesworth connection - on another thread.

Note that Laban used the term Guardianista and Ant knew that was a reference to The Guardian. Not that many people would know that in the general Australian population and for someone who is just learning English it's very impressive...

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