Labour’s immigration curbs come with noticeable cost to public realm

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Good morning. Well, at least no one is pretending that Labour’s number one priority is growth any more. Some slightly longer thoughts on the government’s plans to reduce immigration into the UK below (and see here for the FT breakdown of the contents of the white paper).

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Shortage of care

Keir Starmer says that the damage done by immigration to the UK is “incalculable”. (This is a word that politicians use when they mean “we asked the machinery of government to crunch the numbers and we didn’t like the answer”. Almost everything in public policy is, in fact, calculable.) Without change, he says, Britain risks becoming “an island of strangers”. The prime minister doesn’t believe any of this, and here’s the chart which proves that:

I am going to go out on a limb here and say that the difference between “incalculable damage” and “everything is hunky-dory” is not “we were going to have 88,000 people coming in by the skilled worker visa a year, and now we are going to have 49,000”. We are not even talking about the kind of changes necessary to turn us into an island of nodding acquaintances.

What we may be talking about, though, is something that turns us from a nation with a care industry into one without. The government has scrapped the existing care worker visa, I think rightly. This was not a well-designed visa route, in large part because the original sin was trying to reverse engineer visa routes designed for workers with large numbers of paper qualifications to fill labour shortages in a low-pay, high-insecurity industry. (Worth reading this piece by Delphine Strauss back in 2023 about the problems with the social care visa route.)

But, nonetheless, the UK really is an ageing society with a growing care-dependency ratio, we really do have labour shortages, not misallocated labour. If you scrap the social care visa and leave nothing in its place, you are going to run into trouble, whether in the social care sector, or elsewhere when the government — which is ultimately on the hook for most social care costs — has to raise taxes.

As readers will know, I am a long-term believer that the government does just need to increase taxes if it is going to keep its promises and to provide public services at a level that the British people expect.

But I will be blunt here: I don’t think that the UK government is going to be able to weather the political backlash from increasing taxes if that money largely goes into the social care sector.

There have been various plans to fix the UK’s ailing social care sector. In 2010, Andy Burnham proposed the idea of a flat 10 per cent levy on all estates on top of inheritance tax to pay for social care — the so-called “death tax”. In 2017, there was Theresa May’s “dementia tax”, which would have required elderly people receiving social care to fund the entire cost, until they reached their last £100,000 of assets which the state would allow them to keep.

One reason why these plans were withdrawn is that at any given time, most people are not experiencing the care crisis. We are experiencing one consequence of that: our local governments’ resources and time are consumed by managing it. But we don’t, for the most part, link our ever-rising council tax bills and our declining services with the social care crisis.

More important, while we have lots of evidence that people dislike the net immigration numbers in the abstract, we have absolutely no evidence (and indeed quite a bit of good collateral to the contrary) that anyone is really willing to weather higher inflation or a deterioration in the standard of their public services. Indeed, as Ipsos’ striking survey of the councils up for grabs this month shows, what leaps out here isn’t “who thinks that we are becoming an island of strangers” or who is facing rising property prices. It is who is experiencing a decline in the standard of their public realm:

Of course, that becomes harder and harder to fix if, like the Labour government, your solution to so many of your political problems is to find new barriers and new burdens to heap upon businesses.