Good morning. Sometimes the obvious conclusion is the right one. The UK’s persistently high inflation is bad news for households, bad news for businesses and as a result it is bad news for the government’s hopes of getting re-elected.
But some things are less obvious: just in this morning, the UK’s record net migration figure of 606,000 in 2022 will trigger a fierce debate about British immigration policy. The political consequences of that are, I think, far from clear.
Party like it’s 1979
Sometimes a chart is worth a thousand words.
I don’t have much to add here, other than that Chris Giles’s piece about whether the UK is once again becoming the “sick man” of Europe is very much worth your time.
As I say, I think the political conclusion of this is obvious: experiencing economic challenges similar to the 1970s is going to lead to political consequences that bear similarities to the 1970s. Whether the next election is more like February 1974 — when a majority government gave way to a minority government — or 1979 — when Margaret Thatcher won a majority — is up for grabs. I’ve said my piece about what I think the likeliest outcome is and I don’t wish to go over old ground.
These are not good economic circumstances for incumbent governments. The major source of comfort for the Conservatives, I think, should be that both Labour in 1974 and the Conservatives in 1979 won having moved away from the centre after their defeats in 1970 and 1974.
Change the record
The UK has hit a new record for net migration. Historically speaking, we are living through the biggest change in the UK, in terms of raw numbers, as this chart from the University of Oxford’s migration observatory makes clear. The share of foreign-born people in the UK’s total population increased from 9 per cent in 2004 to 14 per cent in 2021.
A majority of British people say they want migration numbers to fall, but a large proportion oppose specific reductions across most of the areas actually driving the UK’s higher immigration figures. As Sunder Katwala, director of the British Future think-tank, explained in this informative and useful piece:
Only one in 10 people think we took too many refugees from Ukraine. The idea of reducing visas for the NHS or social care is equally unpopular: only 12 per cent would restrict visas for the health service. A mere 17 per cent are in favour of reducing the number of fruit pickers.
Sunder identifies a group he dubs the UK’s “sincere reducers”: that is, people who say that they want the UK’s overall numbers to fall but don’t also oppose all of the policy changes required for that result. About a quarter of the population are in this group, he says.
The Conservative party’s problem here is obvious: that quarter is not enough to win the next election all by itself, but if that quarter defects to the smaller parties of the right or stays at home, there is no prospect of the Tory party being able to win either. And as Nuffield College’s Ben Ansell explained over at his (free!) Substack recently, the Conservative electoral coalition is heavily reliant on the voters who are most likely to be among Sunder’s sincere reducers.
There’s a direct parallel here with the Conservative party’s internal and external difficulties over tax-and-spend. Almost every Conservative MP purports to want lower taxes — but it has been some time since a Conservative chancellor has managed to get substantial cuts in public spending past the parliamentary party. Indeed many Conservative MPs like to call for tax cuts and in the next breath, demand more spending — on defence, on families, on skills. (Over at the Times, Steve Swinford’s recent mini-profile of many of these groups is worth a read.)
My general view is that we all tend to overestimate our willingness to bear costs. Many of Sunder’s sincere reducers are anything but: they would immediately start to squeal the second their taxes went up, if the prices that businesses charged increased or indeed saw any of the real costs that the UK would have to bear in order to actually reduce the UK’s net migration figures.
And in many ways the Conservatives’ current electoral predicament highlights that. Yes, some of the crises facing the government are external ones that the Tories had no part in. Some of the problems are entirely self-made, like the lingering consequences of Liz Truss’s shortlived premiership. Some are a bit of both, like the prolonged period of public sector pay restraint and the hangovers from lockdown. But the thing is, while British voters had nothing to do with the Truss government, almost everything that is now making the Conservative party unpopular once helped make it popular.
The internal debate in the Tory party over immigration, and much of the commentary about it, talks as if there is some clever speech or policy lever that Rishi Sunak could pull to make his and his party’s life easier. The reality, I think, is that there is a group of voters who will continue to be angry with the Conservative party for failing to cut immigration and who would be angry about the consequences if the Conservative party actually did.
There’s a warning here for Labour, too. The party’s proposal to rewrite the UK’s immigration rules so that employers cannot pay people on the shortage occupations list 20 per cent below the going rate, will, I think, be popular with the public. (That it is also recommended by the government’s own migration advisory committee adds to the appeal from Labour’s perspective.) But just as with any of these policies, it comes with a cost: and I wouldn’t, if I were Labour, have any confidence that voters will be willing to actually pay the cost when the bill arrives.
Now try this
I saw Plan 75, and frankly I thought it was dreadful. An anti-euthanasia film with the subtlety and intelligence of a brick, extended well past its natural running time.
There have been three thought-provoking films meditating on the question of assisted dying and what it means to have a good death in the past year: one of which, One Fine Morning, you can still catch in cinemas, while Everything Went Fine and More Than Ever are available to stream. (My favourite of the trio is More Than Ever, and while One Fine Morning is less than the sum of its parts, the plotline involving the main character’s ageing father is unimpeachable.)
What connects those three films is that while they are, I think it’s fair to say, broadly pro-euthanasia, their depth and humanity means that they genuinely provoke conflicting emotions and reactions. Life is complex when you get down to it, and a good film, which portrays that complexity, inevitably gives more than one message.
Not so Plan 75, which ironically made me long for death. (Full disclosure: Leslie Felperin disagreed: you can read her review here.)
Top stories today
Energy bills to fall | The UK energy regulator has cut the price cap on domestic energy bills by £1,206 following a fall in wholesale gas and electricity prices.
Chequer the facts | The Covid-19 public inquiry has issued a legal notice ordering the cabinet office to hand over unredacted versions of Boris Johnson’s WhatsApp messages and diaries dating from the pandemic.
Gove orders Teesworks review | The UK government has promised an “independent review” of its flagship northern regeneration project, which is overseen by the Conservative party’s most high-profile mayor, Ben Houchen, following allegations of cronyism, lack of transparency and poor value for money.
‘Mini’ Budget memories | UK gilt yields are heading towards the levels of last year’s “mini” Budget crisis, investors say, after worse than expected inflation data forced markets to increase their interest rate predictions.
Lidl ups its wages | Lidl’s latest boost to hourly pay for its 24,500 UK employees underlines the big challenge facing the Bank of England: wage growth shows little sign of slowing and is a key part of why inflation is still high.