The battle of the Lords is on

The government is not backing down on reform of parliament's upper house despite the threat of a hug

So House of Lords reform will go ahead. Or rather, a Bill reforming the House of Lords was named in the Queen’s Speech. That doesn’t guarantee it will happen, only that the government will try to make it so. This shouldn’t be a surprise. Nick Clegg and David Cameron have both re-stated their commitment to the plan in recent weeks (although the Lib Dem leader naturally does it with a great deal more enthusiasm than the Prime Minister). But rumours started to surface yesterday of a deal to shelve the proposals, which are certain to provoke a massive rebellion among Tory MPs. The creation of a substantially elected second chamber is the price the Lib Dems demand if they are to allow changes to parliamentary constituency boundaries to go ahead. The Tories see the redrawing of the electoral map as a way to eliminate a pro-Labour bias in the system.

If there were to be a climbdown, both reforms would have to be ditched or postponed until after the election. Tories familiar with Downing Street thinking were very sceptical about the rumours of a retreat last night precisely because the boundary changes are so important in Cameron and Osborne’s minds as part of the strategy for getting a majority. That logic appears to have prevailed.

The Conservative rebels are not happy. They are already complaining bitterly about the prospect of weeks of parliamentary time being taken up with an issue that will strike voters as a perverse distraction from economic woes.  One Conservative MP described it to me recently as “a test of the government’s legitimacy” – in other words, if it goes ahead, the coalition will look as if it is giving up on trying to fix the economy and engaging in displacement activity instead. The counter-argument from Lib Dems - echoed a little more discreetly by Number 10 - is that governments can do many things at once and Lords reform only threatens to become a legislative quagmire because recalcitrant Tories want to make it one. Lords reform of some kind is in the coalition agreement, say those who treat that document as a sacred text, so Tory MPs should get behind it. Lib Dem MPs also point out how much marching behind government policy they have done with clothes pegs on their noses. It’s about time the Tories did the same, they say.

But there are a whole lot more Conservative MPs than there are Lib Dems and Lords reform is in danger of becoming a lightning rod for wider discontent with David Cameron’s leadership, much as rebellions on Europe have done in the past. As I write in my column in this week’s magazine, there is a feeling on the Tory benches that the Prime Minister and the Chancellor have been outwitted in a few too many coalition negotiations; that they are overestimating the strength of the Lib Dems and giving away too much. By some estimations, over 100 Conservatives could rebel on Lords reform. This cannot be dismissed as mischief by “the usual suspects” (although Downing Street is currently deploying that line).

There is some room for manoeuvre. The precise shape of a new upper House has yet to be decided – how many members, what proportion will be elected and by what voting system etc. The question of whether a new settlement should be put to a referendum also has to be resolved. (The Lib Dems think not; Cameron has kept the option open.) But every dilution of the principle of a more democratic parliament will require compromises from Cameron on something else and the boundary changes do not lend themselves so easily to the pick and mix approach. Either they happen in time for the next election or they don’t.

The importance that Cameron and Osborne attach to the new constituencies is in itself revealing. It is a symptom of their anxiety about the next election and the difficulty their pollsters are having finding people who didn’t vote Tory in 2010 but might do next time. It is a sign that they are relying on fairly desperate tactical ploys to collect seats in what looks, on current projections, like being another hung parliament. It expresses the fact that they haven’t hit upon a big, overarching campaign message.

But while the boundary review helps the Tory party in aggregate terms, it makes life pretty tricky for many Tory MPs. Some of their seats will be abolished, others will be less safe and many will be forced to seek reselection in battles with neighbouring MPs.  In other words, the price that the Lib Dems would demand for shelving Lords reform feels much higher inside Downing Street strategy seminars than it does in the parliamentary Conservative party – just another reason why the forthcoming battle will be gruesome.

The House of Lords. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Brexit is teaching the UK that it needs immigrants

Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past.

Why did the UK vote to leave the EU? For conservatives, Brexit was about regaining parliamentary sovereignty. For socialists it was about escaping the single market. For still more it was a chance to punish David Cameron and George Osborne. But supreme among the causes was the desire to reduce immigration.

For years, as the government repeatedly missed its target to limit net migration to "tens of thousands", the EU provided a convenient scapegoat. The free movement of people allegedly made this ambition unachievable (even as non-European migration oustripped that from the continent). When Cameron, the author of the target, was later forced to argue that the price of leaving the EU was nevertheless too great, voters were unsurprisingly unconvinced.

But though the Leave campaign vowed to gain "control" of immigration, it was careful never to set a formal target. As many of its senior figures knew, reducing net migration to "tens of thousands" a year would come at an economic price (immigrants make a net fiscal contribution of £7bn a year). An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent. For the UK, with its poor productivity and sub-par infrastructure, immigration has long been an economic boon. 

When Theresa May became Prime Minister, some cabinet members hoped that she would abolish the net migration target in a "Nixon goes to China" moment. But rather than retreating, the former Home Secretary doubled down. She regards the target as essential on both political and policy grounds (and has rejected pleas to exempt foreign students). But though the same goal endures, Brexit is forcing ministers to reveal a rarely spoken truth: Britain needs immigrants.

Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. On last night's Question Time, Brexit secretary David Davis conceded that immigration woud not invariably fall following Brexit. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (while sounding rather unconvinced), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

The UK’s vote to leave the EU – and May’s decision to pursue a "hard Brexit" – has deprived the government of a convenient alibi for high immigration. Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past. Brexit may have been caused by the supposed costs of immigration but it is becoming an education in its benefits.

George Eaton is political editor of the New Statesman.