Demography is destiny
Mass migration and low birth rates are fundamentally reshaping society
Towering columns
For The Telegraph, James Johnson warns that failing to keep their promises on immigration will permanently damage voters’ trust in the Conservatives.
Three in four Tory defectors say levels of legal immigration should be lower. Fury about small boat crossings almost blows the roof off focus group venues. It’s an issue that unites the country. More than seven in 10 of defectors in the North and South alike voted Leave in the Brexit referendum, and 75 per cent of Tory defectors in the South want migration to be lower, close to the 79 per cent in the North who say the same.
Southern Tory MPs in Lib Dem seats who are squeamish about going hard on immigration need to wake up to electoral reality. Home Counties or Red Wall voters will punish the Conservatives if they do not get tough on migration – fast. Mr Sunak made stopping boats one of his five promises, and he cannot go back on it now. Robert Jenrick and Suella Braverman, who both resigned over the compromise legislation the PM put forward, are right – to abandon the priority would be devastating for both public trust and Tory fortunes.
That is why ruling out leaving the European Convention on Human Rights, as some briefings suggest, is a serious error. Efforts to reduce legal immigration might not show up in the statistics by the time of the next election, but bold measures will be rewarded. The leader of the Canadian Conservative Party has said new immigrants should match the availability of housing stock. A “net zero” brake on legal immigrants, with exceptions for key sectors, is also an option. These are the sorts of measures that speak directly to the voters Sunak must win back.
On his Substack, Neil O’Brien makes the case for a “New Deal for Parents” to improve the lives of families and helps those who want children to start them.
The UK’s tax-benefit system is not very child friendly compared to most of our major European peers. We recognise children in the benefit system, but (unlike lots of other countries) we no longer recognise children in the tax system. Between 1909 and the late 1970s people got an extra tax allowance if they had children, on the solid logic that providing for their children meant they had less left over to pay tax. This is the same “ability to pay” concept that justifies higher earners paying more tax. I will come back to why it was removed in a moment.
But the upshot is that in the US and many other European countries parents pay much less tax than similar people without. But that’s not the case in the UK…Like other countries we recognise children in the benefit system - but because we don’t in the tax system, the overall effect of the tax-benefit system is less favourable to parents than in other countries…
…The net effect of the tax-benefit system is that children in the UK is not enough to offset the costs of having children for most households. So children are more likely to be in poorer households, after equivalising for the composition of different households. 27% of children are in the poorest fifth of households, just 13% are in the top fifth after housing costs.
At UnHerd, Miriam Cates urges both the Left and the Right to be more courageous in addressing the problem of falling birth rates.
Governments of all political persuasions should be deeply concerned about collapsing fertility rates. To ensure that there are enough young people entering the workforce to replace (and pay the pensions of) those who retire, average fertility must sit at roughly 2.1 children per woman.
Yet in many Western countries, this number is now well below 1.5. This means that there is a significant and growing “birthgap” with alarming consequences for the future of the economy. If in 2024 you think taxes are too high, the labour market too tight, the NHS underfunded and care workers too scarce, then buckle up because you ain’t seen nothing yet. In Japan, where low fertility has not been masked by high immigration, national debt now stands unsustainably at 250% of GDP.
Given the scale of the economic challenges now unfolding, it should be surprising that the UK Government is paying so little attention to declining fertility rates. But the hysterical reaction from some sections of the French media to Macron’s relatively minor intervention on the issue demonstrates why so few mainstream politicians dare speak out. Within the Westminster bubble there seems to be an automatic assumption that any MP like myself who expresses concern over low birth rates is somehow calling for women to be forced to have children. And while this response is mostly confected outrage, it reflects the fact that while fertility is a serious economic issue, it is more importantly a very sensitive personal issue for women in particular.
For The Times, Juliet Samuel highlights the closure of the Grangemouth refinery as the result of inaction from government in building economic resilience.
To be fair, if resilience can be measured in pages of policy documents, Britain is well on the way to success. The government published its “Critical imports and supply chains strategy” this week, four years in the making and comprising a muddled round-up of miscellanea related to trade, net zero and data collection…
…Far from providing any serious analysis of why the UK and its allies have lost competitiveness in critical industries, what risks this poses and how we might improve it, the paper is a compendium of underwhelming or failed half-measures — like the “semiconductor strategy”, the “net zero strategy”, the “powering up Britain strategy” and the “energy security strategy”, whose mere existence apparently stands in for any actual measure of success, such as productivity, prices or market share.
Meanwhile, the assets we do have, like North Sea oil and Grangemouth, which should be the basis for stabilising domestic energy supplies and building up potential new industries in offshore wind, energy storage or carbon capture, are being allowed to decline at precipitous pace. It’s true the government has allowed through a few new North Sea projects after years of dithering, but the damage had already been done by windfall taxes and botched climate policy. Now, for every mention of the term “green jobs”, which don’t yet exist, a skilled worker, engineer or apprentice in an industry that does exist is laid off or driven abroad by premature closures, reckless new schemes and ludicrous official forecasts of our actual energy needs.
At Compact, Dan Hitchens looks at how the Post Office Horizon scandal has laid bare the economic divide between asset-owners and workers.
If the British economy doesn’t work for workers, then whom does it favour? According to an arresting analysis by Brett Christophers, what Britain sustains is a form of “rentier capitalism.” The rentier’s success depends on what he controls, rather than what he does.
The obvious examples are landlords who charge rents on land and the owners of patents who can demand big fees for their medicines. But Christophers argues that lots of things are actually rentierism, even when they look like something else. Take the huge outsourcing companies that hoover up a third of Britain’s public spending. The trouble with such companies, Christophers says, is that their speciality can become winning contracts, rather than doing a good job. “When simply securing new contract assets becomes companies’ raison d’être, the adequate performance of the work stipulated by those contracts tends to become a secondary consideration.” Such companies’ reports for investors, Christophers notes, generally “place a much stronger emphasis on securing new contracts, and thus shoring up existing stocks of rent-generating assets, than on the business of seeing those contracts fulfilled.”
It is dangerous to generalize from one instance. But the Horizon case is at least a parable of the perils of outsourcing. Fujitsu, which provided the bug-ridden software to the Post Office, is certainly a successful contractor. Since 2012, the firm has won 197 government contracts worth a total of £6.8 billion ($8.7 billion), according to the consultancy Tussell. The Post Office work has been especially lucrative—indeed, the contract was recently renewed. But how has it been fulfilled? As early as 1998, a government aide described Fujitsu’s then-nascent Horizon system as “hugely expensive, inflexible, inappropriate, and possibly unreliable.” Wallis interviewed an early employee who was shocked by the incompetence he witnessed: “Everybody in the building,” he claims, “knew that it was a bag of shit.” When Fujitsu had originally bid for the contract, it came bottom in eight out of 11 categories. But the government thought it was the best value for money.
At UnHerd, Tom McTague examines Labour Party history to demonstrate the essential truth of politics that to govern is to choose.
The conservative philosopher Maurice Cowling wrote that the essence of liberalism was the belief that “there can be a reconciliation of all difficulties and differences” in life (which he said was plainly false). In The Meaning of Conservatism, Roger Scruton argued that this was the liberal faith that lay at the heart of today’s “spirit of improvement” — the inclination of the liberal, as he put it, to “change whatever he cannot find better reason to retain”. Conservatives like Scruton and Cowling, by contrast, do not believe all difficulties and differences can be reconciled — or, in fact, should be. To govern is to weigh up competing goods and to make least worst choices based on incomplete information.
The fate of all Labour prime ministers, then, is to campaign with the “spirit of improvement” but to be forced, once in power, to choose between options which you previously hoped could be reconciled. Harold Wilson promised to modernise Britain and to protect its global influence, but as prime minister was forced to sacrifice one to save the other — maintaining the value of the pound to protect Britain’s overseas commitments at the cost of dousing the flames of his very own “white heat of technology”. (In the end, of course, the austerity he chose to protect the pound did not work and he lost both his economic plan and Britain’s global influence.)…
…There is little reason to believe Keir Starmer can avoid the fate of his predecessors. In one obvious sense, he has already been tried and found guilty of betrayal by the Left for breaking the promises he made to secure the leadership. During the Labour leadership campaign, Starmer pledged to “reverse the Tories’ cuts to corporation tax” only to then order his MPs to vote against the Tories’ own decision to reverse their own cuts themselves. He also pledged to “defend free movement as we leave the EU”, only to then make keeping out of free movement a red line in any future relationship with the EU. But the fundamental challenge for Starmer is that it is impossible for him to reconcile all of the competing promises he has made to the wider electorate and so will, inevitably, betray someone.
Wonky thinking
Onward released a new report, Reality Check: What voters really think about immigration, by Jim Blagden and Sebastian Payne. Polling conducted by Stack Data Strategy reveals that the average estimate for migrants entering the UK was 70,000 per year, 17 times lower than the 1.2 million gross figure. Almost nine in ten constituencies want lower immigration levels and 80% want migration to be below 100,000.
Concerns about the levels of migration are rife across all ages. This research has found that there is not much difference between 40-year-olds’ views of immigration and 75-year-olds. Younger cohorts have more favourable views on the cultural impact of migration than their elders. Every political and demographic group believes that immigrants receive more than they pay in taxes. The same is true on public services, with around a third stating that migration has helped the NHS and two-thirds stating it has harmed it.
Although older demographic cohorts state much higher concerns — especially on economic matters — younger voters do not automatically say they are in favour of migration for these reasons. In fact, 62% of 18-24 year olds want fewer migrants and have more sceptical views than older generations on its potential economic benefits. But they do state they are in favour of migration for its cultural benefits.
There are also split opinions on where migration to the UK should come from. Just under half (49%) say that the Government should prioritise immigration from countries with similar cultures to Britain. The most popular countries of origin for migrants were Australia, Germany and Poland, while Pakistan, China and Somalia ranked last. For occupations, doctors, nurses and scientists proved to be the most popular options; hospitality staff, cleaners and barbers were the least popular. Yet looking at the types and professions of migrants to the UK over the last few years, people are not getting what they want.
Migration is particularly important for the Conservative party: since 2020, there has been a fifty-point gap between how important its voters place the issue versus the Labour Party. Every single corner of the Tories’ voting coalition — the party’s continuing supporters and those who have flipped to Reform, Labour and Lib Dems — care much more about immigration than the average voter. Those who currently aren’t sure how to vote are especially hawkish on numbers.
A new, better model of migration is vital for revising the Conservatives’ electoral prospects and it is imperative for the Government to make tangible, clear progress on reducing migration. With such a stark difference between perception and reality on levels of migration, it’s no surprise that the public are in favour of tough measures.
William Freer and James Rogers have produced the primer Why Britain needs a larger navy for the Council on Geostrategy. Russian and Chinese naval expansion has put Britain at a disadvantage and the rise of state-based threats in an increasingly tense geopolitical environment requires renewed investment in the Royal Navy. This means building more destroyers, frigates, and submarines to project British power in Euro-Atlantic and Indo-Pacific waters.
In 2021, the Defence Select Committee published a report titled ‘We’re going to need a bigger navy’, which concluded the British fleet was not large enough to fulfil the objectives laid out in the Integrated Review. While total displacement has grown, the number of hulls – which provide the Royal Navy with the means to foster presence (the prerequisite for both sea control and denial) – has been decreasing at an alarming rate and will only increase slightly by 2040. Presently, in terms of major combatants, the Royal Navy has two large aircraft carriers, two amphibious vessels, four ballistic missile and six nuclear attack submarines, six destroyers, and 10 frigates (see: Graph 1). It plans to procure eight Type 26 and five Type 31 frigates. Other programmes – such as the Type 32 frigate and Type 83 destroyer – remain up in the air; it is also unclear how many of either class of vessel will be procured, though an overall escort fleet of 24 vessels has been proposed by the mid-2030s.
If the UK is to continue to lead NATO in terms of affecting sea control in the Euro-Atlantic against an aggressive Russia, enhance its contributions to sea denial in the Indo-Pacific to dissuade an expansionist PRC, and protect international shipping lanes (e.g., in the Red Sea), a larger navy is needed. In the Strategic Defence Review of 1998, HM Government deemed 32 destroyers and frigates and 10 nuclear attack submarines sufficient for the more benign environment. It is hard to believe that the mere five Type 31 and eight Type 26 frigates on order and a like-for-like replacement of Type 45 with Type 83 destroyers will now be enough, even if those vessels are all significantly more potent than their predecessors. Although additional forms of strategic advantage can be generated, in today’s more volatile era, the Royal Navy requires more frigates, destroyers and nuclear attack submarines than contemporary plans envisage.
Undoubtedly, a larger fleet would require more personnel, despite the likely introduction of greater autonomy – in fact, increasing hull numbers may, in and of itself, aid with retention by reducing the workload placed on sailors and officers. Further, to amplify and extend the striking power of its naval forces, the UK should: furnish both aircraft carriers with a full suite of aircraft – meaning more F35B ‘Lighting’ Joint Combat Aircraft, as well as new autonomous and remotely-piloted air systems; end the practice of designing warships ‘for but not with’ key weapons systems; cease delays in constructing warships and submarines to make short-term financial savings; maximise the survivability of new vessels from the outset with the largest possible number of vertical launch silos; equip the Type 83 destroyers with a potent land attack capability; and introduce more novel weapons such as directed energy systems and specialist complementary vessels, such as arsenal ships to provide a strike group with additional defensive or offensive firepower.
Ideally, a larger and more potent navy would result from increased defence investment; HM Government has acknowledged the need to spend at least 2.5% of Gross Domestic Product (GDP) to secure British interests in a more contested world. In 2023, the defence budget was £52.8 billion – approximately 2.1% of GDP. So, assuming the UK economy does not contract, increasing defence spending to 2.5% of GDP would generate at least £10 billion more per year. But no date has been set to reach this target.
Book of the week
We recommend Mass Challenge: The Socioeconomic Impact of Migration to a Scandinavian Welfare State by Tino Sanandaji. The author examines Sweden as a case study in how the European experience of migration differs in significant ways from that of America. Sanandaji argues that there is no uniform effect of migration, and that refugee migration in particular has undermined European welfare states.
Sweden is facing problems. A country long known as one of the world's most prosperous and idyllic is about to turn into an ethnic class society, where parts of the population feel like second-class citizens, and where assaults against firefighters are only reported in brief unless they lead to fatalities. The number of neighborhoods that are defined as social exclusion areas has increased from three in 1990 to 186 in 2012, while gang crime, bitterness, alienation, and multi-generational poverty have taken root in a short time. Sweden must deal with social problems that are not in the least inspiring, which are hard to paraphrase into something uplifting, and where there are not even any definite solutions. It is hard to have to face all this, but it is necessary; few social problems have been solved by being swept under the rug.
It is painful to admit the link between social problems and immigration. Most Swedes have great goodwill and tolerance toward immigrants, and wish that immigration would have been more successful. Sweden's experiment with large-scale immigration from the Third World to a welfare state has been unique in its scope, but is in many respects a failure. Today, Sweden's social problems are increasingly concentrated to the portion of the population with immigrant background. Foreign-born people account for about 19% of the population, and second-generation immigrants an additional 6%. Despite this, foreign-born represent 53% of individuals with long prison sentences, 58% of the unemployed, and receive 65% of social welfare expenditures; 77% of Sweden's child poverty is present in households with a foreign background, while 90% of suspects in public shootings have immigrant backgrounds.
The increase in social problems is also driven in large part by immigration. Since the early 1990s, those with immigrant background have accounted for half of the increase in the proportion of low-income earners; more than half of the reduction in high school eligibility of students leaving primary school; about two-thirds of the increase in social welfare expenditure; and more than 100% of the increase in unemployment - which, consequently, has dropped among Swedish-born. Problems such as rioting and unrest are also highly concentrated in immigrant areas. We must develop concrete actions that give all immigrants Sweden has received a place in Swedish society. This, in turn, requires a frank and evidence-driven analysis of how Sweden ended up here and, more importantly, can move on.
Quick links
Inflation increased for the first time in ten months to 4% in December.
Real wage growth increased for the fifth month in a row at 1.3% in September to November 2023 according to the ONS.
A new MRP-model from YouGov predicted that Labour would win a 120-seat majority with the Conservatives reduced to 169 MPs…
…but new analysis also showed that Labour needs a record-swing of 12.7% to win a parliamentary majority.
Pro-Palestine protests were viewed as legitimate and supported by 55% of ethnic minority respondents, 1/4 white respondents, and 7/10 Muslim respondents.
The Israeli Defence Forces discovered that the Hamas tunnel network is between 350 and 450 miles in length in a territory, running for 25 miles at its longest point.
42% of voting-age adults believe small boat migrants should be removed from the country immediately, a poll found.
The median monthly rent for a one-bedroom home in London is enough to afford a three-bedroom home in all other English regions.
The number of 18 to 34-year-olds with children in Britain and America owning their own property has fallen from half in 1980 to one in five today.
Lecturers at a King’s College London counterterrorism course claimed that an organisation could not be labelled as “terrorist” as it “implies a moral judgment”.
Private sector productivity has risen by over 60% since 1997 but flatlined in the public sector.
The Chinese navy is now the largest in the world, with the number of European frigates and destroyers falling by 32% in 1999 to 2018.
Contracting by 0.3%, Germany was one of the worst-performing major economies in 2023 due to high inflation, interest rates, and energy costs.
Former Prime Minister Liz Truss lobbied ministers to ‘expedite’ a licence for defence exports to China made by a manufacturer in her constituency.
Pakistan launched retaliatory strikes against Iran, killing seven people.
Estonian Prime Minister Kaja Kallas warned that Europe has three to five years to secure Nato’s eastern borders.
Chinese brands want to capture a sixth of the UK electric car market by 2030.
A High Court challenge was brought against headteacher Katharine Birbalsingh over school’s ‘prayer ban’.
The last steel blast furnaces in Wales will close due to the costs of green transition.
Barclay Primary School might close and switch to online learning after receiving death threats due to dispute over pupil wearing a Palestinian flag badge.
Research found that the Lower Thames Crossing planning application runs to almost 360,000 pages.