Lib Dem rebellion over cuts highlights post-2015 dilemmas

The decision by Tim Farron and four other Lib Dems to rebel against local government cuts is a reminder of the more open debate needed about the austerity to come.

Largely unnoticed, there was a small but significant Lib Dem rebellion over cuts to local government last night. Party president Tim Farron, former defence minister Nick Harvey, Andrew George, Stephen Gilbert and Adrian Sanders all voted against this year's funding settlement. Harvey, who led the rebellion, warned during the debate: 

The whole model of local Government funding is now so fundamentally broken that there needs to be a cross-party endeavour to rebuild something from scratch on a blank sheet of paper. The situation that we are in now is untenable. Somehow or other, Whitehall convinces itself that by putting this degree of hardship on to local government, the public anger at seeing some of the services that impact on their daily lives most directly will miraculously be focused solely upon the local authorities that send out the bill. I say to my right hon. and hon. Friends that I simply do not believe that that is a sound political calculation. The public are not stupid and they will see the difficulties that local government, regardless of the party running any particular council, is facing at this time, and they will hold central Government to be responsible for it.

He is right to highlight both the undesirability and the unsustainability of the huge cuts to local government. By the end of 2015-16, the budget of the Department for Communities and Local Government will have been reduced by a remarkable 60.6 per cent, with several years of austerity still ahead. On the current timetable, publicly-funded libraries, swimming pools, youth centres, museums and parks will soon cease to exist in parts of the country. 

The rebellion last night, then, is a reminder of the far more open debate needed over the pain to come after 2015. Vince Cable has long argued that it is untenable to ring-fence some areas (the NHS, pensions, schools, international development) from austerity, while cutting others (local government, working age welfare, universities, the police) to the bone. As he said last March, "You get a very unbalanced approach to public spending. I went along with the overall ringfencing approach in this parliament – as part of the coalition we have had to work as a team – but I think as a long-term approach to government spending, it isn't very sensible." But we have heard little from him, or any other major Lib Dem figure, on this subject recently. 

With the party set to back the triple lock on the state pensions, it is worth asking whether it will take the same approach to the NHS, schools and international development. Back in 2010, Nick Clegg declared: "We’re not entering into this dutch auction about ring-fencing. Good outcomes aren’t determined by drawing a redline around government departmental budgets." But more recently he has argued: "I am absolutely convinced that at a difficult time like this, protecting our NHS spending, protecting spending on schools and honouring our international obligations to developing countries around the world was a big decision, was a controversial decision but I think was the right one to take."

The alternative, of course, to cuts to protected departments is greater tax rises. But none of the measures proposed by Labour and the Lib Dems to date, such as a mansion tax or the reintroduction of the 50p tax rate, even come close to bridging the fiscal gap. As the IFS has warned, around £12.5bn of tax rises are required merely to keep departmental cuts at their current pace. One left-wing economist, speaking very much off-the-record, recently told me that the parties ultimately may need to discuss openly the possibility of raising the only taxes that reap reliably large revenues: the basic rate of income tax, National Insurance and VAT. But that is the kind of genuinely "tough choice" that all sides seem desperate to avoid before May 2015. 

Liberal Democrat president Tim Farron was one of five Lib Dem MPs to vote against cuts to local government. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Freedom of movement didn't start with the EU - it's the norm for Britain

Britain has only had full controls on immigration for one 11-year period. There's a reason. 

There was a short period of just 11 years between 1962 and 1973 when free movement of people did not apply in the UK. Other than during that time, businesses and public services have had easy access to workers from other countries. Following Brexit, the UK will be embarking on a similar period. If the full force of UK immigration law is brought to bear on all foreign nationals, this will require major adjustments in economy and society.

One wonders how long the interregnum might last this time.

Before British citizenship

We often talk casually about “British citizens”, but British citizenship is a relatively recent innovation. There has only been such a thing as a British citizen for just the last 34 years, since the British Nationality Act 1981 become law on 1 January 1983. Before that, there were Citizens of the United Kingdom and Colonies, or CUKCs.

Born in Swindon in 1959? You would have been a Citizen of the United Kingdom and Colonies. Born in Swahililand in 1960? You would have been Citizen of the United Kingdom and Colonies.

Both had the same rights and entitlements and were allowed to live and work anywhere within the territories of the United Kingdom and Colonies. There was total freedom of movement. Not only that, but that right of free movement was extended to all citizens of the Commonwealth as well, a much larger area even than the colonies, particularly as more and more countries gained independence.

This citizenship status of “Citizen of the United Kingdom and Colonies” was created by British Nationality Act 1948, which came into force on 1 January 1949. It replaced the status of “British subject” which pre-dated it.

After the war, Commonwealth countries decided they had had enough of quite literally being British subjects and decided to establish their own citizenships. CUKC status was the British effort and it applied equally to all within the UK and colonies. But there remained an umbrella status of Commonwealth citizens who retained free movement rights.

In the post-war boom the UK needed immigrants. There was a Royal Commission on Population which reported in 1949 and which stated immigrants “of good stock” would be “welcomed without reserve”.

And so they came, from all over. Irish immigration remained high under separate rules. Many Europeans came to the UK in that period as well, as well as migrants from the Commonwealth. Famously working as bus drivers, manual labourers and nurses, these foreign nationals helped the UK rebuild after the trauma of the war.

Enoch Powell, health minister from 1960 to 1963 in the Macmillan government, famously invited Pakistani and Bangladeshi doctors and nurses to come to the UK because of a staffing shortage in the NHS. And 18,000 are reported to have come. By 1971, 31 per cent of all doctors in the NHS were born overseas.

But pressure to restrict immigration grew.

Commonwealth Immigrants Act 1962: some are more equal than others

In 1962, a Conservative government passed the Commonwealth Immigrants Act 1962, which for the first time curtailed free movement for citizens of Commonwealth countries and the Colonies.

CUKCs all still had the same title, whether born in Swindon or Swahililand, but some had more rights than others. Those who retained the right to live and work in the UK were:

  • CUKCs born in the UK
  • CUKCs with a CUKC passport issued by the UK

Those who were subject to control were everyone else, namely:

  • CUKCs born in the colonies or independent Commonwealth countries or with CUKC passports issued by the colonial governments
  • Commonwealth citizens

A notable group remained exempt from control because they had CUKC passports issued by the UK government. These were the residents of Kenya, Uganda and Tanzania whose families were originally of Indian origin and who had made use of their rights of free movement as British subjects within the Empire to relocate, encouraged by the British and colonial governments.

The accepted norm was that when a country became independent, the citizens of the new country would lose the citizenship of the old country and gain the citizenship of the new country. The residents of these new, independent countries would no longer be CUKCs and would be subject to controls under the existing 1962 Act.

The problem was that some new countries excluded a whole swathe of residents from their new citizenships - the East African Asians. If CUKC status was removed from them, they would literally be stateless. If they were allowed to retain it, they might well move to the UK, as was their right, particularly given that the fact they were being excluded from citizenship in the new countries was a sign of worse to come.

Commonwealth Immigrants Act 1968: an end to equality

The UK started withdrawal from the Commonwealth free movement area in 1962 and finished the job in 1968.

This time it was a Labour government which introduced new controls. Under the new Commonwealth Immigrants Act 1968, a CUKC could only live and work in the UK if they, or at least one of their parents or grandparents, had been born, adopted, registered or naturalised in the UK. This excluded almost all of the East African Asians, leaving them with the empty shell of a useless umbrella citizenship status. The legislation stranded them in countries that would not given them local citizenship.

In short, the 1968 Act explicitly created a two-tier system of citizenship rights based on parentage.

This was further codified in the Immigration Act 1971, which introduced the disturbing language of “patriality” to the right to live and work in the UK.

The European Economic Community

In 1973, the UK entered a huge new area of free movement of labour and people: what was then called the European Economic Community.

There was no “big bang” for immigration, though. The 1970s and then the early 1980s were a period of significant unemployment in the UK and economic contraction or very slow growth. There was no need for migrants, basically, and no-one would have wanted to come. This was long, long before Cool Britannia.

Inwards migration from the EU was a slow burn to begin with. While immigration gradually rose, emigration broadly kept pace. It was only from 2004 onwards that net migration became significant. 

Initially, EU nationals were initially treated the same as other migrants under the same set of laws, but with specific immigration categories which only applied to them. A patchwork quilt of EU regulations and directives enabled specific but wide groups of EU citizens to move around the EU, including workers, the self employed, students and family members from within and without the EU.

When economic growth really got started, migration unsurprisingly rose. This relationship is important. Bear in mind that until the mid 1970s, the post-war unemployment rates were historically very low indeed, which in turn represented a clear need for labour. The migrants who arrived had no problem finding work. There was no issue about them displacing native workers.

By contrast, back in the interregnum period of the 1960s and 1970s, before membership of the EEC started to take effect, the UK was considered the sick man of Europe. Post-war unemployment was low and the economy grew, but at a slower rate than our closest neighbours. That started to change once we joined the EU and after the single market reforms of the 1980s.

Immigration post-Brexit

Voters famously chose to "take back control" on 23 June 2016. Politicians have scrambled to promise controls on immigration. But what does full immigration control mean in practice?

Free movement, whether Commonwealth or EU, is by its nature frictionless. A person can simply be employed as long as they hold the right passport, no further questions asked. The UK immigration rules are not frictionless. They have traction. They chaff. They rub. And they are supposed to, because they are intended to make migration to the UK difficult and to keep people out.

Let us think about a fairly common scenario – falling in love and wanting to live in the same country as your loved one. At the moment, all an EU national need do is show their passport as they enter the country – that’s it.

The cost of a spouse visa under the Immigration Rules is as follows:

Initial application    
£1,464.00

Extension application    
£993.00

NHS surcharge    
£1,000.00

Settlement    
£2,297.00

Naturalisation    
£1,163.00

TOTAL    
£6,917.00

That is for this year. The fees rising by around 20 per cent per year at the moment and the Conservatives will triple the cost of the NHS surcharge after the election, so it will be much higher in future. And that is before legal costs; these days applications are so complex and require so much paperwork that lawyers are routinely needed.

There are other restrictions. The sponsor must earn at least £18,600 for a period of at least 6 months (a rule which separates families moving to the UK from abroad) and the spouse has to pass an English language test. That figure too will rise after the election.

In short, it will be a LOT harder for British citizens to have serious relationships with EU nationals in future.

Another common scenario is to employ a foreign worker. As with a spouse, at the moment all an EU national need do is show their passport as they enter the country – that’s it.

The upfront cost to an employer of employing a foreign worker is currently broadly as follows: £2,356 for a small employer, £6,476 for a medium-sized one and £6,627 for a large one. The Conservatives will double the Immigration Skills Charge by 2020, so those costs are going to increase yet further.

These fees omit several other elements of friction, like the fact a skilled worker can only be recruited if the job has been advertised in a certain way and there were no suitable UK applicants. 

So what will employers do when they need workers? For example, what will a farmer do who needs labour for crop picking? Will the farmer find British workers to do the work? They don’t seem to want to, and there is no pool of unemployed workers as unemployment is low (for now). Or will the farmer leave the crops to rot, grow different crops, or just stop growing crops and try to sell the farm?

How about the house building boom the politicians are always promising is just around the corner? Where will the workers come for that? If you are a construction company looking to make a profit building houses, where will you find the builders? There are insufficient trained UK builders and unemployment is low. Will you pay more and see your profits diminish or disappear but carry on regardless? Will you simply not build houses as it is not worth it? Will you somehow recruit young school leavers and train them up? Even if so, how will you build any houses in the mean time? Or the nurses and doctors needed for the NHS?

When you look at what different ministers are saying, the minister for environment, food and rural affairs wants a sector based scheme for bringing in seasonal low skilled workers. The minister for housing wants a sector based scheme for builders. The Chancellor wants a sector based scheme for bankers. The minister for health wants to be able to retain and recruit doctors and nurses from the EU. Even Liam Fox, the disgraced and so far pointless minister for international trade, has recognised that immigration is part and parcel of any serious international trade deal. 

Debate is needed on the cost of cutting immigration. The fact is that ending free movement and reducing net migration to tens of thousands per year would be disastrous for the UK economy and society. A detailed report published by Global Future suggests net migration of 200,000 is necessary.

But politicians will not admit it. With no proper or meaningful debate, either immigration will be drastically reduced, causing huge damage and making everyone poorer, or immigration will remain high and the politicians will be accused of broken promises.

Neither outcome is a desirable one. We’re always being told that we need a “debate” about immigration, usually a coded way of saying “voters don’t want immigration, therefore we need to limit it”. We do need a debate about immigration. We need one about the need for immigration.

Colin Yeo is an immigration barrister. This is an edited version of a post that originally appeared on the Free Movement blog.

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