Osborne's speech: long on politics, short on growth

The Chancellor launched attack after attack on Labour, but where was the plan for growth?

When George Osborne addressed the Conservative conference he did so as his party's chief election strategist, not as Chancellor. His speech was long on politics, but staggeringly short on growth (indeed, the word didn't appear) and jobs.

As ever, one could not fault his chutzpah. He declared that the country must not "divide one group against another" before casually demonising welfare claimants as scroungers, "sleeping off a life on benefits". He insisted that everyone had been too optimistic about growth, forgetting those economists - Paul Krugman, Robert Skidelsky, our own David Blanchflower - who warned that his obsession with austerity would tip the country back into recession. And, for the first time since he abolished the 50p tax rate on earnings over £150,000, he uttered the words "we're all in it together". In one of his many assaults on Labour, Osborne declared, "All this talk about something for something and they've learned nothing about anything", but with the country back in recession (the only G20 country, with the exception of Italy, to be so) and borrowing up by 22% so far this year, it was he who gave the appearance of having learned nothing.

Faced with a crisis of demand, the government needs to stimulate growth through tax cuts and higher infrastructure spending. It could take advantage of the ultra-low interest rates that Osborne is so fond of boasting of and borrow for an emergency stimulus. But all the Chancellor offered was a fiendishly complex new scheme allowing workers to acquire shares in their companies in exchange for giving up employment rights. In Britain, already the third most deregulated labour market in the developed world, it is not excessive regulation or "red tape" that is constraining growth. But the Chancellor, blind to the need to revive "animal spirits", still acts as if it is.

He unambiguously ruled out a "mansion tax", vowing that "this party of home ownership will have no truck with it". Yet just 3.1% of homes are worth more than £1m and the tax, as proposed by Vince Cable, would only apply to those twice this amount. In rejecting higher property taxes, Osborne has missed an opportunity to prove that he really is more concerned about "the squeezed middle" than squeezed millionaires. His priority, he said, would be to further reduce "aggressive tax avoidance", but making the rich pay taxes they're meant to be paying anyway is not the same as raising taxes on them. If the Lib Dems are to avoid further humiliation, they will need something more in return for signing up to an additional £10bn of punitive welfare cuts.

As Osborne spoke, it became clear that David Cameron had contracted out the job of attacking Ed Miliband to his Chancellor. Evidently unsettled by the Labour leader's bravura speech, Osborne declared that it was "risible" to pretend that you can become a party of "one nation" just by repeating the phrase, and that Miliband, masquerading as a centrist, was, in reality, "moving to the left". But in his refusal to adopt a more balanced deficit reduction strategy and in his defence of the wealthy, it is the Chancellor who has vacated the centre ground and his party that has relinquished any claim to be a party of "one nation". Today's speech did nothing to correct those errors.

Chancellor George Osborne delivers his speech during the second day of the annual Conservative conference in Birmingham. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Scotland needs its own immigration policy – here's how it would work

Sub-state immigration policies and autonomy work perfectly well in countries such as Canada and Australia.

Theresa May’s relentless obsession with the net migration target – prioritised over economic, educational, or even human rights concerns – is all the more surprising given the fact that it is such nonsense. For a number picked out of thin air prior to 2010, it is both remarkable and worrying that it became almost a sacred cow of British politics.

The net migration target (NMT) can be unpicked in many, many ways but it has been welcome to see a growing focus on the fact that a “one-size-fits-all” target for all nations and regions is just not appropriate. Clearly if the only migratory movements in the UK next year were that 900,001 people left Wales to head abroad and 1,000,000 migrants arrived looking to live in Maidenhead, this would not be good for Wales or the Prime Minister’s constituency – yet it would be the first time in eight years of trying that she had met her pet ambition.

We need to be much more sophisticated. Different parts of the UK have very different demographic and economic needs in terms of migration.

Since 2007, the Scottish National Party government at Holyrood has pursued a different population target – aiming for Scotland to match average population growth of other EU15 nations over the decade to 2017. The fact it is on course to succeed has been considerably aided by May regularly and spectacularly missing her own.

But what if May finally reduced net migration to the tens of thousands?

In 2014 the Office for National Statistics produced population projections for Scotland and the UK based on different migration scenarios. One “low net migration” scenario was 105,000 – so just outside the NMT. Even that narrow miss would see Scotland’s population almost stagnate over 25 years, barely mustering a overall population increase of 3,500 – 0.07 per cent – per year. So there is a real danger that May actually hitting or "exceeding" her target means population stagnation or even decline for Scotland. This is potentially disastrous when the population is ageing.

More generally, having migration policies in place so different geographical areas are able to attract human capital and the right labour to match skills shortages is surely in the interests of all. The UK system isn’t working well for too many parts of the UK. A very bureaucratic Tier 2 system is navigable for large companies with armies of immigration lawyers – and international firms can always rely on intra-company transfer rules. But for many small and medium-sized enterprises – a more significant part of Scotland’s economy – these are often expensive and unrealistic options, and it is no surprise that Scotland is home to fewer Tier 2 sponsors than its population size would suggest. 

There is strong support for a new system, including both the Scottish Chamber of Commerce and Scottish Trade Unions Council. In the House of Commons the Scottish affairs committee, as well as the All Party Group on Social Inclusion, chaired by Chuka Umunna, have advocated bespoke immigration policies. And this week even in the House of Lords, two committees concluded there should be “maximum flexibility” for nations and regions and that there was “merit” in a specific system for Scotland (and London). Academics like Professor Jonathan Portes and think tanks such as the IPPR are supportive of the idea. But how could it be done? 

With a little imagination, there are a bucket load of ways – many very helpfully set out in a recent paper by Professor Christina Boswell of the University of Edinburgh. Whether it’s applying different points thresholds for jobs in Scotland, a bespoke post-study work scheme, allowing Scotland a separate quota under the Tier 2 scheme, or a more flexible shortage occupation list, options are there which need not complicate administration or enforcement. Indeed, if there was political will at the UK level, there is no reason Scotland could not continue to allow free movement of EU nationals, which is what my party and I will continue to advocate for.

It’s worth remembering that sub-state immigration policies and autonomy work perfectly well in countries such as Canada and Australia. And the UK itself previously experimented with a post-study work visa applicable to graduates from Scottish universities (but curiously, not limited to Scottish employers) and currently there is a (very slightly) different list of shortage occupations for Scotland.

An immigration policy for Scotland is an idea whose time has come – and failure to listen could have serious consequences for Scotland’s population.

Stuart McDonald is the MP for Cumbernauld, Kilsyth and Kirkintilloch East and the SNP's immigration spokesman