How Starmer’s crackdown on immigration could backfire on the economy

Despite the shadow of the ubiquitous Nigel Farage, Keir Starmer needs to remember that immigration can be a good thing, writes Andrew Grice. It will be crucial to securing growth

Another day, another crackdown on immigration. New rules say claims for British citizenship from people who arrive illegally will normally be refused – even if they have been given indefinite leave to remain and regardless of how long they have lived here.

Critics say it is a barrier to integration and treats refugees as second-class citizens.

On the face of it, it could stop someone like the Afghan pilot who served alongside British forces in Afghanistan – and was granted asylum in the UK after a campaign by The Independent – from becoming a British citizen because he arrived on a small boat. Afghan interpreters who worked with Britain and its allies could also be affected. Two out of three people crossing the Channel illegally eventually win asylum, but virtually all will now be barred from citizenship.

Last August, Keir Starmer vowed to end the era of “politics as performance" under the Conservatives, but now some Labour MPs think that, on immigration, he is aping the "performative politics" of Boris Johnson and Donald Trump.

Starmer's frustration that Labour is not getting credit for increasing the number of migrants being removed from the country led to the Home Office releasing videos of raids and people being put on deportation flights.

It was also a response to the momentum of Nigel Farage's Reform UK. Many Labour backbenchers report that their constituents are worried about immigration, and Starmer told the cabinet last Friday: “Progressive liberals have been too relaxed about not listening to people about the impact of it.”

But others fear the government is merely amplifying Farage's message – and won't be able to outbid him any more than Kemi Badenoch can. Diane Abbott is far from alone in thinking that. As one Labour MP told me: “It’s like the Coke advert: people will vote for the real thing.”

Peter Kellner, the former president of the pollsters YouGov, argues persuasively that to defeat the populists’ arguments, Labour will need to convince the public the government is competent. But one night's TV news bulletins about migrant removals will soon be eclipsed by never-ending pictures of people arriving on small boats, sending an unmistakable message: the government is not in control of the country’s borders. When pollsters ask people whether they trust Labour or the Tories on immigration, the most common response is “neither”. That is a big opening for Farage.

Like its Tory predecessor, Labour is finding that the courts are also a headache. A family of six Palestinians from Gaza has won the right to live in the UK under a scheme meant for Ukrainian refugees. The Home Office will contest similar claims in future.

A demonstration against the far right outside the Reform party’s headquarters in London last summer (AFP via Getty)

Soft-left Labour MPs, including some ministers, detect a wider agenda beyond immigration. They think Morgan McSweeney, Starmer's powerful chief of staff, is doubling down on last year’s successful election strategy of wooing working-class traditional Labour voters in the red wall, many of whom are now drifting off to Reform.

McSweeney’s internal critics claim Labour is also dialling down its commitment to green energy – on Heathrow Airport expansion and the expected go-ahead for the giant Rosebank oil and gas field – to head off Farage's attack on net zero. To combat his criticism of "wokery", Labour will delay a manifesto pledge to make it easier for people to legally change their gender. The critics fear all this will alienate progressive voters who now have "somewhere else to go" in the Liberal Democrats, Greens and SNP. "There's a risk we are fighting the last war," one Labour adviser told me.

This week’s intense debate about immigration shows it will be hard to keep everyone in Labour’s 2024 coalition happy. McSweeney's allies insist his approach is tactical rather than ideological. Some suggest Labour can square the circle with a left-of-centre approach on the economy combined with social conservatism. The Blue Labour faction, which advocated for this during Ed Miliband’s Labour leadership, is back in fashion and being encouraged by McSweeney.

Such a left-right fusion helped Johnson win a red wall-based majority of 80 at the 2019 election. I think it’s no coincidence Starmer is recalibrating his strategy now Trump is on the scene: the president seems to make the political weather here as well as in the US.

Ministers admit privately that a big cabinet battle looms over immigration as they draw up a white paper designed to reduce legal migration. There's a huge tension between more headline-grabbers aimed at Reform-minded voters and securing economic growth – the government's "number-one priority".

Rachel Reeves’s growth measures will require more foreign skilled labour for infrastructure projects and to get anywhere near building 1.5 million homes in five years. Net migration will likely drop from its 906,000 peak under the Tories to around 315,000 in the medium term, but the $64,000 question is whether Labour will allow it to rise again.

Despite the shadow of the ubiquitous Farage, Starmer will need to remember that immigration can be a good thing. For Labour, it will be crucial to securing the growth on which its entire project hinges.