There must be no right turn on immigration

There is no path to victory for Labour through the thickets of anti-immigrant politics and I am confident that Ed Miliband knows this.

Everyone is still talking about the lessons of Eastleigh. But the worst lesson that any mainstream political party could learn, in the light of the UKIP's surge, is the necessity to move right on immigration. It is true that the issue was often raised on the doorstep. And, since 2010, opinion polls have shown high levels of public concern. But what public policy needs is common sense policies on immigration

Sadly, immigration has served as a proxy for race in the British political narrative for so long, that it is still not possible to totally deracialise it. This is true, even though the would-be immigrants currently causing anxiety are eastern European. And there is a small group of people who use immigrant as a generic term for all kinds of people, like refugees, asylum seekers and third generation families from the British Commonwealth, who are not immigrants at all.

But the experience of the Republican Party in the United States is an object lesson in how fierce anti-immigrant rhetoric can rebound. They lost the 2012 presidential election, not just because legally settled Hispanics voted against them in record numbers. But because other voters of immigrant descent (like the Chinese and those from the Indian sub-continent) also fled the party. They read the relentlessly anti-illegal immigrant rhetoric of the party as being hostile to all immigrants, however settled and respectable.

Effective immigration policies are more challenging to implement than the rhetoric of Nigel Farage suggests. The Tory Home Secretary, Theresa May, boasts about cutting the number of immigrants. But in reality, half the drop is down to students (with calamitous results for our universities), while 30 per cent of the net migration reduction is down to more British people leaving. No wonder the coalition's opinion poll lead on immigration is collapsing.

Anti-immigrant policies can have contrary and embarrassing results. The last Labour government tried to deter asylum seekers by giving them cash vouchers instead of money. But vouchers were widely criticised as both stigmatising and impractical. Nor did they do anything to bring down the numbers of asylum seekers - because these are people compelled to flee by war and economic devastation. So the policy was eventually scrapped. Now the Tories are looking at denying access to the NHS to certain categories of immigrant, asylum seeker and visitor. No one defends health tourism. But doctors and GPs are emphatically not interested in being immigration officers. More importantly, if you drive certain members of the population away from seeking treatment for communicable disease, there is a real danger to public health.

It should not surprise anyone that people whose parents or grandparents were immigrants complain about immigration. Anti-immigrant fervour is actually a proxy for economic discontent and will inevitably rise in a recession. As Ed Miliband has pointed out, immigrants don't cause low wages; unregulated labour markets and predatory employers do. There is no path to victory for the Labour Party in 2015 through the thickets of anti-immigrant politics and I am confident that Ed Miliband knows this. There is certainly a pressing need to sort out the chaos at the UK Border Agency. And I warmly welcome the practical policies that my party is shaping around the real discontents of ordinary people; ranging from building more homes to the principle of a living wage.

A couple walk past eastern European shops in Boston, in Lincolnshire. Photograph: Getty Images.

Diane Abbott is Labour MP for Hackney North and Stoke Newington, and shadow secretary of state for health. 

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.