Demand, not supply

jobs, migration, UK politics

Author(s):  Matt Cavanagh
Published date:  30 Mar 2012
Source:  Progress magazine

Labour can again contest the centre-ground if it untangles the web of immigration, jobs and wages. But are there strong principled as well as pragmatic reasons why it should actively engage in the immigration debate and contest the centre-ground as it now stands, rather than hoping it will drift back towards it.

In the February edition of Progress Liam Byrne urged Labour to ‘keep the insight that elections are won in the centre-ground’. He did not mention immigration, though as a former holder of the ministerial brief I am sure he would agree the insight applies here. Labour has understandably been quiet on immigration since the election.

The pragmatic reason is clear: immigration is central to our politics and likely to remain so. For a decade it has never dropped out of the top five issues. It is currently third, below only the economy and unemployment. The Conservatives will be trying to keep it there, and unemployment and sluggish growth will heighten concerns about migrants competing for jobs and holding down wages, while spending cuts will sharpen resentment over migrants claiming benefits or adding to pressure on stretched public services. Labour might have won handsomely in 1997 and 2001 with a policy that was far more pro-immigration than most voters’ views, but returning to such a stance now would be reckless. Rejecting the centre-ground is even riskier on immigration than, say, the economy, since moving left on immigration would not even unite Labour’s core vote, let alone the coalition of voters it needs to win a majority.

The principled reason is that on such a divisive issue all national political parties have a responsibility to try to set out a position which can unify the country. They must avoid any suggestion that immigration policy will be handed over to judges, or ‘experts’, and insist that it be decided through democratic debate. Some on the left are uncomfortable with this, given the hostility of much of the media and the extent to which voters’ views are influenced by false beliefs: for example, on average British voters think the proportion of foreign-born residents is three times as high as it actually is. But this kind of challenge is not unique to immigration, and political parties need to refute, not reinforce, the sense that immigration policy is being decided by an elite.

The immigration debate continued to run along old left-right dividing lines up to and including the 2005 election, with Labour broadly happy to be seen as pro-immigration, the Conservatives happy to be seen as against. This was at best a mixed blessing for Labour, though it only became seriously damaging towards the end of its time in office, as the public moved further right on the issue at the same time as it rose up their list of concerns. But since 2005 both parties have tried to shed their old polar positions, and have been competing for a new, more centrist position: roughly, ‘pro-immigration, but less of it’.

The Conservatives made the first move when David Cameron became leader and distanced the party from its previous approach as part of his efforts to decontaminate their brand. With a few inevitable lapses, they have stayed more or less on the centre-ground ever since, a task made easier as the ground itself continued to drift right.

Labour’s pitch for the centre-ground came later, in its last two years of power. The party tried to reassure people that it would use the new points-based system to ensure that, when growth returned, it would benefit those already here, through more jobs and rising wages, rather than rising immigration. It also tried to address the sense of unfairness around some aspects of immigration, encouraging councils to give priority for social housing to people with an established local connection, and making it harder for migrants to qualify for a range of benefits in the early years after arrival.

Despite this late move from Labour, the battle for the centre-ground was won comprehensively by the Conservatives. Their flagship policy of placing a ‘cap’ on immigration had the virtue of simplicity – even if what looked simple in opposition is starting to look simplistic in government, as people realise that less than five per cent of immigration is actually ‘capped’. More important than the Conservatives’ strength on the issue, however, was Labour’s weakness: by the time it made its move, people had stopped listening. And in terms of the challenge Labour now faces, it remains the case that reclaiming the centre-ground depends on first regaining the permission to be heard.

Part of this is being seen to admit that Labour ‘got it wrong’ in government, which the current frontbench team has shown itself willing to do. Another part is re-establishing a reputation for competence, and holding ministers to account. Labour was badly damaged during its time in government by the perception, fed and exploited by the rightwing media, that immigration was simply ‘out of control’. This was only partly fair: critics relied on an unrealistic view of visas and border security which turns every lapse into a national scandal, as was brought home to the Conservatives in their first scandal in November. One of the strategic questions facing Labour is whether to take its turn at exploiting these stories to the full, or whether to offer to work with the government on building a more realistic narrative on border security, one which compels voters to confront the real trade-offs that exist between control, convenience, and cost.

Either way, admitting past mistakes and regaining a reputation for competence will not be enough: in the end Labour will require fresh ideas to convince voters it has learned from the experience of the last decade. The best place to start is the argument over immigration, jobs and wages. Here too the main parties are already less far apart than many suppose. Leaving aside employment minister Chris Grayling’s attempts to blame immigrants for being welfare scroungers, or for pushing British people out of jobs (he has yet to argue both on the same day, though it is probably only a matter of time), most senior politicians in both main parties talk about immigration as the symptom of Britain’s problems rather than the cause. The difference is what they believe those underlying problems are – and so what they think the solution should be.

The Conservatives believe that the real problem is welfare dependency, and so the solution is welfare reform, which they argue will incentivise the unemployed to compete harder with immigrants for low-paid jobs. Labour’s view is that the real problem is our model of capitalism, which is not generating enough ‘good’ jobs at the lower end of the income distribution, instead generating the kind of jobs which attract migrant workers rather than the unemployed: demanding but low-paid and low-skilled, often temporary, and lacking career progression or development. At least, we are to assume this is Labour’s view: so far the link between immigration and policy ideas like increasing the minimum wage and enforcing it more rigorously, or using public procurement to require employers to train their workforce, has been left much more implicit than in the Conservative version.

If this is the key difference between the parties on immigration, then a more useful and honest political debate would be one that focused not so much on how we can control the supply of immigration – where the Tory ‘cap’ squares up against Labour’s points-based system – as on how we can influence the demand for immigration. This would be more honest not least because neither party’s policy on controlling the supply of immigration covers migrants from eastern Europe, who are the most obvious competitors for low-skilled jobs.

If the debate did shift onto this new ground, how would the two parties fare? The Labour view has vulnerabilities, mirroring the bigger narrative of which it is a part. Critics will argue that raising the minimum wage will depress job creation more than it stops migrant workers undercutting residents; they will say it is vague, unrealistic or dangerous for governments to talk about intervening to promote ‘good’ jobs over ‘bad’ ones, just as it is to talk about intervening to promote ‘good’ companies over ‘bad’ ones. But these are arguments Labour needs to win anyway.

At the same time, the vulnerabilities of the Conservative argument look even more serious. Even if welfare reform is successful – which is a big ‘if’ – the scale and pace of the reforms mean they will not have a big effect on the demand for immigration during this parliament. Moreover, the reforms are not geographically well-targeted as far as immigration is concerned: the places where chronic welfare dependency is concentrated are not typically the places where local jobseekers have to compete for jobs with large numbers of migrants – indeed, they are often places where there are not any jobs, and therefore no migrants either.

So neither party’s view will convince voters easily, especially given the depth of distrust on the issue. And winning this argument is only one part of what Labour needs to do: equally important will be rethinking how it deals with the sense of unfairness around the allocation of social housing and benefits to newcomers, and engaging properly – as the blue Labour project started to do, before Maurice Glasman drove it off the rails – with the debate around the impact of immigration on our culture and way of life. But the debate over immigration, jobs and wages is the right place to start: it fits with Labour’s wider political and economic narrative, and though it is harder work than jumping on the next border scandal, the potential pay-off could be far greater.