Business Secretary Vince Cable speaks at the Liberal Democrat conference in Glasgow last year. Photograph: Getty Images.
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Cable's warning to the Tories: lower immigration will harm deficit reduction

The Business Secretary tries to appeal to fiscal conservatives by highlighting that reduced EU migration will lead to "a much slower reduction in the public debt".

With the exception of the EU, there is no issue that the coalition parties are more publicly divided over than Europe. While the Tories have pledged to reduce net migration to "tens of thousands" a year by the end of the parliament (it rose from 154,000 to 212,000 in the most recent period), this is not, as the Lib Dems have emphasised, a government target. As a result, ministers from the two parties are able to adopt diametrically opposed positions on the subject. 

In his first speech as immigration minister, Conservative James Brokenshire will declare at Demos today that "For too long, the benefits of immigration went to employers who wanted an easy supply of cheap labour, or to the wealthy metropolitan elite who wanted cheap tradesmen and services – but not to the ordinary, hard-working people of this country". This despite the supressed government report revealed by Newsnight showing that the number of UK workers unemployed as a consequence of immigration is well below the figure used by ministers of 23 for every 100 additional migrants. In a rebuke to Cable, Brokenshire will add: "In the past year net migration from the EU has doubled, and this figure is – frankly – just too high. Some have tried to claim that this rapid increase is somehow 'good' for the country. Well, just like the Home Secretary, I disagree." He will also claim: "Uncontrolled mass immigration can force wages down and house prices up and put pressure on social cohesion and public services. And let me be clear – it can also cause displacement in the labour market."

But as luck would have it, Cable will deliver his own speech on the subject at Mansion House tonight, giving him the chance to deliver a rapid-fire rebuttal. It's the kind of stage-managed row that both parties believe will benefit them. The Tories get to remind a sceptical public that they are pushing for an even tougher line on immigration, while the Lib Dems get to remind their liberal target audience (the 25 per cent of the electorate who would consider voting for them) that they are fighting back against Conservative dogma. 

Cable will say: "We just have to stop treating people coming to work here as if they are a problem. We need to kill off all the scare stories" and will rightly warn that "Bear down on immigrants, and you lose some of the most dynamic, innovative and imaginative workers in your economy". It is certainly odd that those who are so supportive of the free movement of capital are so opposed to the free movement of labour, but perhaps a more promising line of argument is his warning that reduced immigration will hinder deficit reduction. He will point out that a "marked reduction" in newcomers from the EU will lead to "an increase in the budget deficit and a much slower reduction in the public debt". 

Since immigrants are net contributors to the economy, paying far more in taxes than they receive in benefits and service (they are younger and more economically active than the population in general), their removal increases fiscal pressures on the government. As the Office for Budget Responsibility has shown, we will need more, not fewer migrants, if we are to cope with the challenge of an ageing population and the resultant rise in the national debt. Should Britain maintain net migration of around 140,000 a year (a level significantly higher than the government's target of 'tens of thousands'), debt will rise to 99 per cent of GDP by 2062-63. But should it reduce net migration to zero, debt will surge to 174 per cent. As the OBR concluded, "[There is] clear evidence that, since migrants tend to be more concentrated in the working-age group relatively to the rest of the population, immigration has a positive effect on the public sector’s debt…higher levels of net inward migration are projected to reduce public sector net debt as a share of GDP over the long term relative to the levels it would otherwise reach."

One might expect David Cameron and other fiscal conservatives to act on such advice but, as so often in recent times, the PM is determined to put politics before policy. The irony is that by exacerbating, rather than easing, public fears over immigration (thus handing a propaganda victory to UKIP), he isn't even succeeding in these debased terms. 

George Eaton is political editor of the New Statesman.

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle