When it comes to remuneration, it’s not what you do, it’s the way that you do it

If it is acceptable to reward immigrants with the benefits of citizenship, welfare and access to public services based on the level of their contribution, then surely we must aim to apply the same rules to all

Is it morally right to view benefactors and detractors in the same light?
Benjamin Harris-Quinney
On 15 March 2012 13:37

The debate is one that leaves most Conservatives uncomfortable; state intervention into the running of private companies at any level is an anathema to Conservatism; to be dictating at a state level who should be paid and how much, is tantamount to the totalitarian politics of clause 4.

The new era of global inter-dependency corporatism presents a more nuanced question however: If the state, and therefore the taxpayer, is to be exposed to the debts of a company, or take ownership of a company, is enforcing “responsible” remuneration the remit of the state?

A febrile media and public at large have been quick to demand that all bankers’ bonuses and pay packages are placed under review, but as many banks and financial houses have consistently been the recipients of state funded bailouts, many have been equally consistent net contributors. It is surely right that the government should have greater say and control over those institutions it has supported and bailed out, but surely wrong that it should have a say over banks, or any company which it has not.

I see the answer to this question as morally being the same for a multinational company as it is for an individual citizen: there are those citizens who have lived an entire lifetime on benefits, and those who have consistently worked and constantly paid into the system in taxes. Yet these citizens bizarrely share the same civil entitlements, and the same constraints.

When it comes to the state’s say in remuneration, it shouldn’t matter who you are and what you do in the modern economy, all that should matter is whether you are a net benefactor or a net detractor. Any public anger should be directed solely at those who consistently detract from our nation’s economy, be they on a bonus, or on benefits. 

By international comparison HMRC is a relatively efficient and ruthless body in the pursuit of taxes, but it does not utilise a running tally of what each citizen, each company puts in to the economy, and each takes out over a lifetime.

I don’t believe it is right that a consistent benefactor to the economy should be sent to prison for evading £5000 of tax, when their neighbour might have freely taken a million from the state in welfare and housing benefit. It is equally wrong for a multinational company to take state funded bailouts far in advance of its net contribution, and then freely evade tax, and for a small business to be penalised severely for missing a tax payment in harsh times. It must be right to say, greater freedoms for those who have given more, fewer freedoms for those who have given less.

An advance to a system where those who give more get more, and those who give nothing, get nothing, may sound like the fantasy of realist Conservatism never to be achieved, but moving from the castigation of bankers, Europe’s recession has already started to ask more serious questions of its national dependants (net detractors). 

The Spanish have long operated a “confianza” system, which has been further tightened under the new PP government. New members of the workforce are required to pay in for a period of months and years, which will dictate what level of welfare they will be entitled to should they later fall out of work. If a citizen never pays in, they are able to take very little out.

President Sarkozy recently announced plans in France to limit welfare benefit payments currently available to immigrant workers to those who have enjoyed residency for 10 years and have worked for five of those.

In the UK the last two months have seen proposals for earnings for those receiving state benefits not engaged in work programmes to be limited to £24,000. In March 2012 the Home Office announced plans to only accept non EU migrants after 2016 that earn an average wage of over £35,000 and to deport any that later fall below that level of earning.

This is a reasonable early step in attempting to ensure that new citizens are a net benefit to our economy, but what of our domestic population?

There are few privileges so great, and yet so easily earned as citizenship of the United Kingdom, with all the benefits and security that it entails.

It is time for HMRC, the government and the public at large to start to recognise in very real and public terms those who add to our nation, and those who detract. If it is acceptable to reward immigrants with the benefits of citizenship, welfare and access to public services based on the level of their contribution, then surely we must aim to apply the same rules to all.

Benjamin Harris-Quinney is the Chairman of the Bow Group. He tweets at @B_HQ. See the Bow Group's latest publication on this subject here

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