How Osborne's benefit cuts could hurt the Tories in marginal seats

Labour releases data showing that thousands of working families in Conservative marginals will be hit by the cuts.

Labour is increasingly confident that it is not just right in principle to oppose George Osborne's 1 per cent cap on benefit increases but also right politically. While Osborne, the Conservatives' chief election strategist, believes that the measure will increase support for the Tories among those voters who considered the last government too soft on welfare claimants, Labour argues that he has miscalculated by hitting the very "strivers" he claims to support. Sixty per cent of the real-terms cut to benefits will fall on working households and, according to the Institute for Fiscal Studies, the average one earner couple will be £534 a year worse off by 2015.

Overnight, Labour released some fascinating HMRC data showing how the cuts to tax credits will hit voters in Conservative marginals. In the Tories' 60 most vulnerable seats, there are an average of 15 working families receiving tax credits for every one marginal voter. For instance, in North Warwickshire, the party's most marginal seat (held by 54 votes at the last election), there are 6,800 families receiving working tax credits. In Broxtowe, the 10th most marginal (held by 389 votes), the figure is 5,700, in St Albans, the 40th most marginal (held by 2,243 votes), it is 6,700.

A Labour spokesman said: "Everyone knows the next election will be a living standards election. George Osborne's strivers' tax is going to hit working families in Tory-held seats. He thought he was playing a clever political game, but instead he is likely to find he has cost the seats of dozens of his colleagues."

If this sounds a lot like wishful thinking, the thesis that austerity will cost the Tories votes at the next election remains a plausible one. A frequent complaint heard by Conservative candidates on the doorstep in 2010 was that the party planned to take away their tax credits. Now it has done so, the electoral fallout is hard to predict. But the belief that in-work voters deprived of their benefits will be assuaged by the knowledge that others are suffering more is no more convincing than the belief that they will fall into the arms of Labour.

Chancellor George Osborne is seen during a visit to the offices of HM Revenue & Customs. 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