Cracks in the coalition on immigration

Cable comes out swinging against Cameron’s cap.

Given that the Lib Dems went into the election promising an amnesty for illegal immigrants and ended up supporting the Tories' unworkable cap, it's hardly surprising that Vince Cable feels the need to reassert his liberal credentials.

Cable's declaration that he wants to see as "liberal an immigration policy as it's possible to have" has succeeded in bringing the cabinet's internal divisions out into the open. Pushing the principle of collective ministerial responsiblity to the limit, he revealed that he was "arguing within government" for "the most flexible regime possible".

But as the Spectator's Fraser Nelson points out, the fact that David Cameron's pledge to reduce net migration to "tens of thousands" a year was not included in the coalition agreement means that the policy is up for negotiation -- and rightly so.

Immigration fell significantly during the recession, but net migration of 142,000 in 2009 indicates that Cameron would need to cut immigration by at least 30 per cent to bring the total to less than 100,000. Privately, Tories speak of an even more unrealistic target of 50,000.

Cameron's promise remains unfeasible for several reasons. For a start, the government cannot limit immigration from within the EU without restricting the free movement of labour and throwing the UK's continued membership into doubt. The policy also ignores the 39,000 people who come to the UK on spousal visas after marrying British citizens abroad.

In the case of his India trip, Cameron's declaration that "Britain is open for business" sits uneasily with his belief that the door must be closed to some. Cable may be aware of this, but his call for a "flexible cap" -- a contradiction in terms -- reveals the tangle the government has got itself into.

The most practical and liberal policy would be to abandon the cap altogether but, for now, it looks like the coalition will try to muddle through.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.