The UK won't become Europe's biggest economy if we slash immigration

The Tories are hailing the UK's projected growth while promoting policies that would strangle it.

Tory MPs are busy hailing what they regard as a late Christmas present: the news that the UK is forecast to become Europe's largest economy by 2030. According to the Centre for Economic and Business Research (CEBR), Britain will overtake France by 2018 and Germany within the next two decades, leaving it as the second biggest western economy after the US.

The response from the Conservatives could be summarised as "See? We told you George knows what he's doing!" But here's one point they're conveniently avoiding: Britain won't win the growth race unless it maintains a high rate of immigration. As the CEBR states, "positive demographics with continuing immigration" is the main factor (along with non-membership of the euro) behind the UK's projected success. While Germany's population is forecast to decline sharply over the next few decades, the UK's is expected to rise to 75 million by 2043, making it the biggest country in Europe.

That a significant part of this increase is expected to come through immigration helps explain why Britain will grow strongly. An OECD report last month, for instance, found that migrants make a net contribution of 1.02 per cent of GDP or £16.3bn, since they are younger and more economically active than the population in general. Far from being "benefit tourists", migrants contribute far more in taxes than they receive in welfare payments and public services. Of the 5.5 million people claiming working age benefits in February 2011, just 371,000 (6.4 per cent) were foreign nationals when they first arrived in the UK, meaning only 6.6 per cent of those born abroad receive benefits, compared to 16.6 per cent of UK nationals.

Were immigration to be cut to the level most Tories would like to see (little or none), growth would be dramatically reduced. According to NIESR, a halving of net migration over the period to 2060 would shrink GDP by 11 per cent and GDP per person by 2.7 per cent. This leaves the Tories with two options: they can either welcome immigrants as contributors to the economy, or they can turn them away and accept growth will suffer as a result. What they can't do (at least if they wish to retain any credibility), is to boast of our projected growth while promoting policies that would strangle it.

David Cameron talks to UK Border Agency officials in their control room during a visit to Heathrow Terminal 5. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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