Learning to manage multiculturalism

This week David Cameron's Conservatives were forced to address the policy area that dare not speak its name: immigration. Cornered on BBC Two's Newsnight programme, David Cameron averred that immigration over the past ten years had been too high, but that the concerns people had on the issue were not to do with race and culture, but with the increased pressures on public services.

The Conservative immigration spokesman Damian Green also weighed in yesterday, telling BBC Radio 4's Today programme:

"Inevitably many of the incoming communities do cluster together, it’s a natural thing to do, and therefore if that’s unplanned and unexpected then it’s very difficult for the local authorities to cope.

So actually having a firm immigration policy is a way of contributing to better community cohesion in this country."

Whether or not this represents a "lurch to the right", or a desperate reversion of Team Cameron to a "core vote strategy", it is fair enough that the new Conservative Party have the opportunity to address this issue. Unfortunately, while it is still true that immigration must be controlled, for a number of reasons, it is no longer the case that immigration controls can enhance social cohesion to any great extent.

The reason for this is revealed in today's Daily Telegraph:

Ludi Simpson, a social statistician at Manchester University, said the Pakistani population in Birmingham was likely to double by 2026, but with two-thirds of this increase due to the relatively younger age profile of Pakistanis, rather than increased immigration.

Dr Simpson said: "The overall picture is one of rapid natural growth plus some immigration, mainly of young spouses.

"Birmingham is likely to become a minority white city in 2027, but a diverse one in which the white population remains more than twice the size of the Pakistani population which is predicted to become one fifth of the district's population by then."...

Nissa Finney, also from Manchester University, told the Royal Geographical Society's annual conference that 35 towns and cities in Britain had at least one ward which was "minority white". These included Birmingham, Burnley, Slough, Peterborough, Bolton and Derby, as well as Brent, Tower Hamlets, Ealing and Newham within London.

Miss Finney said the increasing proportion of non-whites in these wards was more linked with "natural population dynamics" like moving areas to be nearer family or friends, than with immigration.

She told the conference: "Clustering is the result of benign and natural population dynamics. There is no evidence of self-segregation or exceptional 'white flight'."

The implication is that immigration is no longer the principal driver of increased cultural and racial diversity in Britain. Natural population growth and population movements within the United Kingdom are now of greater significance.

Furthermore, as has recently been reported, emigration from the United Kingdom has reached a new high:

The number of Britons emigrating in the 12 months to July 2006 reached 385,000, the highest since present counting methods were introduced in 1991, new figures show.

This is almost certainly the greatest emigration since the 1960s, when thousands left to start new lives in Australia. It could even be the highest since before the First World War, though official figures are not available. Latest figures show that one British citizen leaves the country every three minutes.

Almost 200,000 of those leaving for a year or more were British citizens - one every three minutes - and the rest were foreign nationals returning home or going elsewhere.

Since 1997, 1.8 million British nationals have left the country and about 900,000 have returned. At the same time, more than three million foreign nationals arrived and about half that number left.

The departure of so many Britons is exacerbating the demographic and cultural changes wrought by high levels of immigration.

Despite the exodus, the population is rising - because emigrants are more than balanced by immigrants, with 574,000 arriving.

Those who hope that calling a halt to immigration will substantially limit the pace of demographic and cultural change are deluding themselves. We actually need immigrants to offset the loss through emigration. Differential birth rates between communities are also a major factor in altering the demographic balance of the nation. The goal of immigration control should be to allow for legitimate population movement and to meet our own economic needs, while ensuring that undesirable criminal elements and security threats are excluded. These objectives are largely independent of the need to build and maintain social cohesion, which promises to be a major challenge of this century not just in Britain but also in other western countries. Political parties need to make clear that the clock cannot be turned back, and that the transition to a multicultural society is already past the point of no return. The process cannot be reversed: we need to learn how to manage it.

Tax cuts for the poor

Remember Flat Tax? This is the idea, all the rage a couple of years ago, that the tax regime should be simplified to a single, low, flat rate, and that all (or most) allowances and exemptions should be abolished. The main exception would be a generous personal tax allowance (much higher than we currently enjoy in this country).

The idea is that by simplifying the tax system and minimising the tax rate you achieve several desirable objectives: reduced tax rates encourage enterprise and discourage tax evasion; simplification of the system further discourages evasion, and lower tax rates combined with a large personal tax allowance helps those on low incomes by taking them out of the tax system altogether. Countries which have adopted flat-tax strategies have tended to see substantial increases in economic growth, such that there is actually an increase in tax revenue as the benefits of the system kick in, offsetting and then outstripping the short term deficits that introducing the system will incur.

For a while the Conservatives were looking seriously at the flat tax option. George Osborne came back from a trip to Estonia enthused by the possibilities. The Adam Smith Institute showed how with a 22% flat rate of tax and a £12,000 personal allowance economic growth could be boosted, tax revenues could be increased and the poor could be encouraged back into work.

So what went wrong? Mainly the Conservative Party. These days the preoccupations of the Cameron/Osborne Tory Party are such that they want their taxes green, not flat. The suggestion that lower taxes could actually benefit those on low incomes does not chime with the pseudo-centrist position that modern Tories are obliged to adopt. The Tories, like Labour, would rather we go on paying high taxes and oblige lower income families to rely on substandard nationalised public services as a compensation for having access to their own cash.

Nevertheless, in central and eastern Europe, and parts of Asia, the Flat Tax goes from strength to strength. Tom Clougherty of the Adam Smith Institute blog comments:

"A total of 11 Eastern European or former Soviet-bloc countries have now eschewed progressive taxation and have a version of the flat tax, with rates ranging from 27 percent in Lithuania, 12 percent in Macedonia and Georgia. After adopting flat tax systems, these countries have generally experienced increased economic growth, greater tax compliance, and lower unemployment (all of which, by the way, add up to increased tax revenue - despite the low overall rates). The remaining laggards don't want to be left out any longer...

The tax-cutting trend started by Reagan and Thatcher in the 1980s has spread across the world, and the UK is quickly being left behind. Even if a true flat tax is too radical a step, its essence (i.e. a much simpler and fairer tax system) should be driving serious reform. Tax competition is a reality of globalization, and we must embrace it if we are to prosper."

This is an issue which all main parties ought to be addressing. Unfortunately, however, the high tax, big government mindset of our present Prime Minister is shared by both the Tories and the Liberal Democrats. It's time to leave the tired mantras of 20th century socialism behind. Tax reform is an issue for the poor at much as the rich. Social justice demands that those on low incomes are protected from the burden of excessive taxation, and dependence on tax funded welfare (especially the "tax credit" con-trick) and poor quality public services. The flat tax option needs to be reconsidered for the good of all our citizens.