The Conservatives have put out a scary story about continued free movement under a Labour government…
New analysis has revealed that Jeremy Corbyn’s plan to continue free movement with EU countries would cost DWP over £4 billion in extra benefit costs over the next 10 years, dramatically increasing the size of the nation’s benefits bill.
I have to say that this really is a shoddy piece of work muddling up all sorts of different things together. Here’s their basic calculation…
I always click the links, so let’s look at what they point to. The first Migration Observatory one goes to an extended piece written in early 2016 before the referendum. this does give 5% for the share of DWP working-age expenditure going to EEA national-led claims.
This itself refers to a DWP publication from 2016 that does have this figure.
But the DWP publication further breaks this down into in-work and out-of-work benefits. That 5% overall figure is made up of starkly different components: of 16% of the DWP’s relatively small in-work expenditure, and only 3% of their much larger out-of-work expenditure.
OK. Now remember that this percentage has been applied to a figure of £61.1bn for total benefits paid by DWP to working age people and children. Hmm. Doesn’t this seem much higher than the £37.655bn DWP working age expenditure above? Could it be because that’s from 2013/14 and the £61.1bn is from 2018/19? Well no, what with benefit freezes and austerity the DWP working age bill certainly hasn’t increased by 50% in the past five years! Rather it is because the DWP publication was for selected benefits
In particular this doesn’t include the DWP’s large spend on Disability Living Allowance and Personal Independence Payment. These are however included in the £61.1bn, and it is clear just what a high proportion of DWP expenditure is devoted to support for disabled people and people with health conditions if you click that link, which goes to the DWP’s 2018/19 Annual Report. In fact DLA and PIP accounted for £18bn of it but none of that amount (or its 2013/14 equivalent) has been included in the numerator or denominator for calculating the 5% spent on EEA nationals.
Now there aren’t any direct statistics on how much DLA and PIP are paid to EEA national-led claims. But something about them can be inferred from a different DWP publication on popular benefit combinations. This shows that EEA-led claims are a very small proportion indeed of claims involving DLA and PIP, much lower even than the 3% for other out-of-work benefits. Thus the denominator has been understated to a much greater extent than the numerator and so attributing 5% of total DWP working-age expenditure to EEA national-led claims simply cannot be right and the estimate of £848 DWP benefit costs per EEA migrant wrong by probably a considerable amount.
This really does fall into the ‘rookie error’ category, taking the percentage of one thing and applying it to what is in fact a quite different thing.
On the other hand, it is only fair to note that the ‘scare’ is only about DWP benefits and EEA nationals claim rather more in HMRC benefits. But then that just makes the scarers look even sillier….