U-Turn If You Want To

Can Starmer's Supermajority get anything done?

Towering Columns

In The Telegraph, pollster James Frayne says Starmer’s Britain is now gripped with buyer’s remorse.

As the pandemic faded but chaos under the Tories continued, Starmer had one clear advantage: voters saw him as a low-drama politician. While the Tories delivered years of turmoil under Boris Johnson and Liz Truss, Starmer quietly kept his own show running. Under his leadership, Labour stopped saying “mad” things, and the eccentricities of the Corbyn years disappeared. This is a big achievement, and it’s to Starmer’s massive credit that he pulled it off. But the scale of his success is lost on most voters. Most people have no idea – how could they? – about the challenge of running a bureaucracy like the Labour Party, with ideological enemies everywhere and rivals waiting to steal your job. All they really knew was that he was low-drama.

Even as Starmer built a formidable poll lead, he lagged badly in focus groups, with sceptical voters raising persistent doubts about his character. Things began to shift in late 2023. By spring 2024, focus groups finally mirrored the polls, and the popularity Labour and Starmer enjoyed in the surveys became a reality. People started saying he “looked” like a leader, contrasting his calm demeanour with the headless chickens who had run the Conservative Party. But the shift in most voters’ attitudes was driven by the head, not the heart, and was therefore never truly “real.” They never fully came to respect Starmer. Instead, they calculated that backing him was the best way to remove the Tories without placing the country in peril with a high-risk alternative – and that was most voters’ priority by the election. People still said they knew little about him; they simply hoped he would be better than the Conservative option.

People simply didn’t know who he was. In the Public First poll on Starmer conducted on the eve of the general election, nearly twice as many respondents incorrectly believed he was under 60 (when he is over 60). By a similar margin, many said he had never had to worry about money, despite his family struggling financially when he was a child. Other questions about who Starmer cares most about – whether young or old, business leaders or workers – also produced large numbers of “don’t know” responses. If Starmer’s lack of clear definition helped him just before the election, what was once a weakness early in his leadership has now returned as a weakness in his premiership. Being low-drama compared to the Tories was briefly an asset, but now it once again makes him seem unsure of what to do.

For The Times, Fraser Nelson says Keir Starmer has failed drag Britain out of welfarism.

Once on sickness benefits, claimants are unlikely to work again. This is especially tragic given how many under-35s are claiming: up 60 per cent in five years. It would be callous, if those in charge realised what was going on. Which, even now, they largely don’t. Jeremy Hunt, a former chancellor, is a case in point. He recently claimed to be responsible for the sickness benefit surge because, as health secretary, he gave mental health the same status as physical health. But his mea culpa was wrong. A steady fall in sickness benefit claimants, which started under Blair, was suddenly and viciously reversed not following Hunt’s 2014 Care Act but in 2019. Why? The Office for Budget Responsibility (OBR) has gone into this in detail. The answer lies in bureaucratic mistakes that were never spotted and lie uncorrected even now.

During lockdown, in-person interviews for sickness benefits were replaced with cheaper phone interviews. The new system had a big, unexpected side effect. Assessors told me the prospect of a sit-down interview deters those who are, actually, not too sick to work. Large numbers of them dropped their claims at the last minute. But a phone call? Far less daunting, especially if it’s a scripted process that can be easily gamed — and whose questions (and accepted answers) are now all online. Something dull and technical — a reduction in the pre-interview dropout rate — is responsible for a half a million extra sickness benefit awards since 2019. But that figure accounts for only half of the overall surge of one million extra awards in that time.

Another factor is the rise in approval rates, now at 80 per cent, double the 2010 level. Why so high? Assessors are incentivised to get through as many claims as they can, and are paid an £80 bonus for every one over a certain minimum. The only way of speeding up is to assess someone as too sick to work. Do so and you can “curtail” — end the interview — and move on to the next claim. You can be hauled up for rejections (in case the claimant appeals) but approvals are almost never checked. One assessor, a former NHS nurse, told me how appalled he was that the interviews are not recorded. This, he said, leaves the system wide open to abuse.

Also in The Times, Juliet Samuel says Britain has been credulously open to Chinese infiltration.

Fortunately, the British government just this week launched a new legal tool to address this threat: the foreign influence registration scheme (Firs). This was conceived of as a way of responding to the sheer range of United Front activity. A free society such as Britain cannot ban people from spouting CCP propaganda and wheedling their way into political circles. Such things aren’t and should not be illegal. But such individuals ought to be required to disclose if they are doing so at the behest of the communist party or Chinese government, by registering those relationships in a publicly searchable database. And if they don’t do so, that ought to be an offence. This is the only way a free society can hope to defend itself from covert mass interference by a much larger, richer police state, across so many channels.

Unfortunately, thanks to delusional Treasury and Foreign Office dogma, which holds that the only correct response to a threat of bullying by Beijing is to roll over, on the ludicrous grounds that we will be rewarded (we’re still waiting for the “golden era” to transform our economy, remember?), the Firs has been set up to fail. It’s been decided that its “enhanced tier”, which has the most stringent registration requirements precisely in order to cover agents of the United Front, will not actually apply to China. Iran and Russia are covered, but not China. That’s right: ministers have decided to exempt Beijing from scrutiny by a legal tool that was specifically designed, with the support and advice of our security services, to unmask its secret meddling.

It’s not as if Tang is a single case. There is Christine Lee, a United Front agent outed by MI5 in 2022. There is Xuelin Bates, wife of Lord Bates, linked to a United Front organisation while ferociously networking her way through the Tory establishment (she has said she cut her links with the United Front after 2020). There is Yang Tengbo, who became a confidant of Prince Andrew before being banned from the UK. There is Edmond Yeo, who ran a charity offering help to Hong Kongers fleeing Chinese oppression, while repeatedly meeting a Chinese embassy United Front official (Yeo has denied working on behalf of the UFWD). There are more, probably hundreds if not thousands, and the Firs was meant to be a vital tool by which British civil society could be informed about and protected from them. Instead, we’ve decided to turn an official blind eye, and let individual journalists and tiny organisations like UKCT do the government’s job, picking off one agent at a time, slowly, painstakingly, constantly outgunned by a CCP organ of some 40,000 people. It’s almost as if some in government don’t want this problem tackled. They struggle to see that you can enjoy the lion dance, admire Chinese civilisation and welcome its talented diaspora without kowtowing to the sinister, meddlesome flunkies of its mafioso-communist regime.

In The Telegraph, Shadow Justice Secretary Robert Jenrick says there are many reasons to be bullish about Britain.

Most of our challenges stem from a relatively small number of very big things we are getting wrong which are compounding each other. If we start to get them right – like we have for so much of our history – we can turn things around. We have built homes and infrastructure quickly and cheaply before. We have harnessed cheap and reliable energy to power forward British industry before. We have operated a lean and efficient state before which attracted the very best and took pride in our country. Before the turn of this century we mostly had sensible, controlled migration. The answers have not changed: we have proved before they are possible and within reach.

The times are changing. The old order is collapsing – and its architects like Tony Blair are yesterday’s men and women. Keir Starmer doubled down on our failed consensus, tinkering here and there, and his political honeymoon has ended faster than ever. After a wasted year he is in office, but increasingly not in power. The public’s patience has snapped and they will no longer tolerate politicians and parties that fail to act on the frustrations voters feel.

We live in a political interregnum, the period of stasis between two orders. What follows is often reinvigorating as latent, suppressed creativity, entrepreneurship and innovation suddenly flowers and lifts the whole nation. In the words of George Orwell, “nothing ever stands still. We must add to our heritage, or lose it. We must grow greater or grow less. We must go forward or backward.” We have no choice but to advance.

On his Substack, Sam Dumitriu says the UK should lift its near-ban on residential air conditioning.

At the moment, just 5% of households have AC. That’s extremely low by international standards. In Germany, the rate is almost four times higher and in France, five times as many households have AC. Britain’s AC units are typically inefficient mobile units that, crucially, can’t be used for efficient home heating. Britain may lack Norway’s cheap hydro power and Japan’s humid summers, but rising temperatures are leading more Brits to look into getting AC. The Government predicts that by the end of the century AC usage will be the norm in large parts of Britain. In the South, where most people live, they reckon four-fifths of households will have AC by 2091. Admittedly, that’s a long way off but there’s a clear direction of travel. Why not piggy-back off that trend to get consumers to switch to a technology that most experts believe is essential if we are to get anywhere near hitting Net Zero by 2050?

There’s some progress on this front. One major barrier to getting consumers to install reversible heat-pumps has been removed and the Government is consulting on removing another is under threat. Until recently, households looking to install a heat pump to heat and cool their home were required to apply for planning permissions. By contrast, heat pumps solely used for heating were considered permitted development in most cases. A recent expansion of PD rights for heat pumps, which allows them to be installed in more locations without getting planning permission, also expanded the right to heat pumps that “may provide cooling as well as heating”.

That’s one big hurdle removed, but cost is another. There may be progress on this front. DESNZ recently closed a consultation on extending the Boiler Upgrade Scheme (BUS) to air-to-air reversible heat pumps. Options included allowing buyers to access grants if they paired them with a heat pump water-heater or offered 50% BUS grants for reversible A2A units paired with gas boilers. Britain’s current approach to ‘clean heat’ has assumed that Whitehall is able to pick the best technology. They may be right this time, but the government's track record of picking technologies is far from spotless. Making these changes would, like other countries, put consumers back in control.

In The Spectator, Miriam Cates says Britain’s birth collapse will spell economic disaster.

[T]he absolute size of the population is not the most important factor. What matters, socially and economically, is the ratio of young to old. In our modern context of long life-expectancy, we need enough people of working age to support those who have retired. In the UK, pension age benefits cost the state more than £125 billion a year, a cost that is shouldered by working-age taxpayers. In the early 1960s, Britain had up to 4.5 people of working age to support each pensioner; but, thanks to falling birthrates, we now have a ratio of just three to one. By 2070, that number could fall to just two working people to support each retiree. This steady decline is a major reason why taxes are at record high, national debt has ballooned, and public services are chronically under-resourced. In these circumstances, the idea of returning to economic growth is just a pipe dream; it will be a miracle if we stave off economic collapse.

In Britain, politicians have failed to grasp the enormity of the threat headed our way. Other nations have not been so complacent; South Korea, Hungary, France and others have all pursued ‘pro-natal’ agendas, using tax breaks and cash handouts to encourage people to have children. The British media often reports that such policies have failed, presumably because none of these countries have managed to achieve replacement birth rates. But this is fake news: multiple studies indicate that pro-natal strategies do increase fertility. Natalist policies in France have arguably resulted in the births of between five and ten million babies that might not otherwise have been born. The evidence shows that there are effective actions that can be taken to improve fertility rates. To deny or dismiss this is both wrong and dangerous; we can’t afford to be defeatist when so much is at stake.

Collapsing birth rates are the most serious threat humanity faces. By the end of this century it is thought just six countries in the world will have above replacement fertility rates. There are many complex reasons for this – economic, social and cultural – all of which should be explored. But I suspect the underlying problem is that modernity has broken the link between having children and personal economic security. We often romanticise the reasons why people choose to become parents, but the fecundity of our ancestors had nothing to do with ‘feeling ready,’ ‘finding Mr Right’ or owning a three-bed semi. Before industrialisation and social security, having children was not a luxury: it was essential for a family’s material survival. Yet in our modern world of centralised economies and socialised welfare, individuals can live comfortably and be provided for in old age even if they have no children of their own. In fact, most of us will be financially better off if we don’t have children, given that the costs of parenthood are privatised, while the economic benefits of those children – a lifetime of tax contributions – have been entirely socialised.

Wonky Thinking

Policy Exchange published Education not Immigration: Reforming the UK's International Student Regime, by Zachary Marsh. It argues that higher education must be reformed to prioritise knowledge rather than providing access to the UK.

International students make an important contribution to the UK universities sector and the wider economy. In 2022 the Department for Education estimated that educational exports by the higher education sector amounted to £32.3 billion. International students cross-subsidise domestic students and research, with universities on average making 31 pence in the pound educating international students whilst losing 8 pence in the pound educating their domestic counterparts.

However, the current model of international student migration is not working. Numbers have increased rapidly. Between 2014/15 and 2023/24 the number of international students in the UK increased by 66%. In 2023/24 international students accounted for 14% of all undergraduates and 51% of all postgraduates studying in the UK. Since 2022 over half of international students have remained in the UK after completing their studies, up from less than 20% in 2019 and 2020.

The former Government’s decision to limit the ability of international students to bring dependents has had a significant impact, leading to an 85% drop in the number of dependent visas offered within one year. The current Government’s recent immigration White Paper also made some limited proposals to restrict international student migration. However, neither of these go far enough in tackling the core issue of individuals using the student visa as a route to longer-term migration.

Universities should be selling education, not immigration – yet too often studying has become a path to get to the UK to pursue work and settlement. Whilst only 3% of those arriving on student visas transferred to a different visa within 12 months in 2019, by 2023 this had risen to 40%. The number of individuals transferring directly from study visas to health and care worker visas rose by 560% between 2022 and 2023 from 3966 to 26200. 16,000 of those who claimed asylum in 2024 had arrived in the UK on a student visa – 15% of all asylum claims.

The graduate route has massively expanded the immigration gateway whilst failing to achieve its objectives. 143,900 main applicants and their dependents secured graduate visas in 2023. Rather than attracting the best and the brightest, those on the graduate route have increasingly come to study short postgraduate taught courses at poorly ranked universities. Median income for those in the first year of the graduate route is just £21,000, whilst only 30% work in graduate roles.

The value of cross-subsidy from international student fees has been overstated. Except at top universities, the profit ratio on international student fees is relatively small. International fees at universities ranked amongst the top 200 globally average £23,790, whilst those amongst universities ranked below 1000 average £12,513. Estimates suggest that whilst on average top universities achieve a surplus of £10,400 per international student, low ranked universities achieve an average profit margin of just £2900. The 27 UK universities ranked in the top 200 globally generate 69% of the UK total international student fee income surplus, whilst the 34 universities ranked below 600 generated just 11% of the surplus. In such cases the cross-subsidy potential for domestic students and research is far more limited.

Evidence suggests at some universities international students may be crowding out UK students. At some institutions places given to domestic students have fallen in real terms as those given to international students have risen. At Oxford University the proportion of undergraduate students from overseas increased from 13% in 2010 to 21% in 2023, while domestic student numbers fell by 8%. 15 Russell Group universities offer one-year foundation courses to international students that enable them to passport onto competitive degrees with significantly lower entry grades.

Some international students lack the English skills to effectively participate in UK universities. Although international students are expected to meet certain proficiency standards, these are set too low. Universities can also administer their own proficiency tests – with 18% reporting no prospective student had failed to pass their test. 1 in 4 UK students feel international students require more support from lecturers, whilst 22% feel they slow down the pace of learning.

A new EU ‘youth experience scheme’ could create a black hole in university finances. EU students studying in the UK currently pay standard international fees. UK universities would lose £650 million a year in fee income if EU students once again became eligible for domestic fee rates as part of the new scheme. If the student loan and grants system was also extended to EU students £7 billion could be lent out in the first f ive years if EU student numbers recovered to pre-Brexit levels. This could leave the taxpayer shouldering up to £2 billion over five years in the form of unrepaid EU student debt.

On his Substack, MP Neil O’Brien reveals new data obtained by freedom of information request, showing the impact of migration on rents and wages.

What do we see? We are often told that immigration is a great boon for the economy - rocket fuel for productivity growth. But that doesn’t seem to be the case. What we see is mainly a scatter, but in so far as there is any correlation, it seems to be somewhat negative.

Places that saw a more rapid increase in non-UK employments were more likely to see real wage growth decelerate compared to the pre-pandemic years than places where the non-UK share grew more slowly. If immigration boosted local wage growth we would see the line sloping upward and a nice clear correlation, but in practice there is little correlation and the line slopes down.

There is previous evidence that migrants from the EU have higher earnings than migrants from the rest of the world - in general migrants from richer countries earn more than migrants from poorer countries. As noted above, recent years have seen churn with a small net outflow of EU migrants and an inflow from poorer countries. These two are netted off in the chart above.

But instead, if we strip out the EU and look just at the share of employments held by non-EU migrants we can see that trend above is more pronounced: faster growth in non-EU migrant employment, greater deceleration of wage growth - the line slopes down more sharply. Again, I’m not saying there is a strong negative trend here, there’s massive scatter. But to say the least, there is no evidence that it more migration been good for wages or productivity.

What about housing costs? We know that private rental costs for the UK as a whole have seen a surge over roughly the same period as we have seen higher net migration, following migration numbers with a lag…

…If again, if we look just at non-EU migration, though the scatter is still large, the trend for faster acceleration of rents in places with more migration is even more pronounced. Why I don’t know. The census showed that the employment rate was substantially higher for people from the EU compared to people from outside the EU and work by HMRC suggests the same. So a given number of employments may imply a greater number of people for non-EU migrants, which would imply a greater housing impact.

The new data gives us our best sense yet of how the recent period of high immigration has played out differently across the country. The unevenness of the changes helps to explain why people can have such different perceptions of the issues.

The new data is further evidence against the idea that migration is rocket fuel for growth. The correlation with faster wage growth is just not there. I wouldn’t over-emphasise it, but if anything there is something of a small negative correlation, particularly for non-EU migration.

When it comes to housing and rental costs, there is a lot of scatter, but the trend is pretty clearly towards having faster acceleration in rental costs (and rental costs relative to income) in places where the share of non-UK / non-EU employments has grown faster.

The economic case for a much lower and more selective immigration policy is getting stronger and stronger.

Quick Links

The Chancellor may need to raise upwards of £30 billion based on the current fiscal trajectory, after major amendments to the Welfare Bill.

The UK 30-year gilt yield rose to its highest level since 1998.

41,750 migrants have crossed the channel illegally under Labour’s watch.

The share of UK births to mothers born in Britain has fallen to 66%…

…and in some local authorities the share born to mothers born overseas exceeds 80%.

The police released a recruitment video in Urdu.

The Government will extend visas to HR officers, administrative support staff and debt collectors.

Bob Vylan was dropped by their agent and managers after calling for the death of IDF soldiers at Glastonbury.

Astra-Zeneca’s CEO expressed his desire to relist in the US.

Lindsay oil refinery collapsed into insolvency.

Non-EU fuel imports have more than trebled since 2020.

China is due to triple the number of organ harvesting centres in Xinjiang.

175,000 people die each year in Europe due to excessive heat.

29 countries now have “ultra-low" fertility” - less than 1.3 births per woman.

Ireland is due to restrict migrants’ access to social housing.

California rolled back its landmark Environmental law which inhibits housebuilding.

If England had built at the same rate as France it would have 3 million more homes.

The Royal Navy is now able to deploy crewless minesweeping equipment.

A controlled study found several AI models to be 4x better at diagnosing complex cases than doctors.