Is ‘Fortress UK‘ a vote-winner?

This is an audio transcript of the Politics Fix podcast episode: ‘Is ‘Fortress UK‘ a vote-winner?’

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Miranda Green
Parliament is on its Easter break. But if you plan to nip over the Channel for your own little holiday, well, good luck with that.

Suella Braverman
What I would say is acute times when there is a lot of pressure crossing the Channel, whether that’s on the tunnel or on ferries, then I think that there’s always going to be a back-up. And I just urge everybody to be a bit patient while the ferry companies work their way through the backlog.

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Miranda Green
Welcome to the Political Fix, your essential insider guide to Westminster from the Financial Times with me, Miranda Green. Coming up, getting out of the country and indeed getting in — has it ever been more difficult? We unpick Home Secretary Suella Braverman's tough talk on the British borders with FT columnist Stephen Bush and Rhys Clyne, the Institute for Government’s home affairs expert. Plus, this week marked the death of one of the most consequential and long-serving British chancellors of the 20th century. I’ll be examining Nigel Lawson’s legacy and the long shadow of his tax-cutting, deregulating policies with economics editor Chris Giles and Patience Wheatcroft, veteran business journalist.

Suella Braverman says she has a dream. It’s this: a front page showing a plane full of refugees being flown away from the UK and off to Rwanda. But the government’s handling of our borders post-Brexit has also led to a nightmare for many, as checks on travellers leaving across the English Channel have led to long, painful delays at Dover. Stephen, what’s going on? We’ve got a home secretary simultaneously, it seems, presiding over Brits unable to get on a boat out, refugees about to be parked on a barge. What on earth is she up to?

Stephen Bush
Right. So the golden thread here is, as it’s not gonna come as a galloping shock to any of our listeners . . . 

Miranda Green
Go for it.

Stephen Bush
The United Kingdom has left the European Union and broadly speaking, the EU’s border policy, not to put it indelicately, is that the really horrible, nasty life-ending stuff happens on borders is done by the EU’s near neighbours, whether it’s the various governments in Libya, whether it’s the Turkish government. Now of course, one of the I would say system shocks for the British political establishment is we don’t think of ourselves as being part of the European periphery, right? Even Eurosceptics believe themselves to be at the heart of Europe. But of course, by having a very hard form of Brexit, we are on the European border. We are Libya, Turkey, Ukraine in this analogy.

Miranda Green
Literally geographically.

Stephen Bush
Yeah, literally geographically. And so that means the shift of people illicitly via lorries then happened when we were in the European Union in much greater numbers. But of course, no one lives on the underside of a lorry, whereas people do live in coastal areas. So they see the boats, they see the tangible evidence. So broadly speaking, one of the reasons why we have people seeking to come to the United Kingdom via small boats is we are now on the border of the European Economic Area. But those same greater checks are what cause delays, because as everyone who’s used any of these services knows, they are all built around the idea then we are in the same movement area and you have very limited checks. Now we’re having to have much larger checks so there are bigger delays at Dover and various airports, Eurostar. So that creates, as you say, this slightly weird political situation where on the one hand the government is going, oh, no, this is dreadful, but don’t worry, we’re somehow gonna find a way to make this faster. And the other hand, you’re going, oh, no, this is dreadful. We’ll have even more onerous barriers to entry.

Miranda Green
So you’re basically saying the deliberate friction added on top of the inevitable friction of leaving the EU causes problems for British travellers as much as it causes the desired problems that the home secretary would like to increase for asylum seekers and refugees coming in.

Stephen Bush
Yeah, pretty much.

Miranda Green
Rhys, you are an expert on Home Office policy and I know you’ve been looking closely at some of the government’s plans and the asylum bill. Is it right, as we’ve been saying, to link the chaos at Dover, which we’re told is gonna become worse and worse over the Easter weekend with people queueing in coaches to try and get on ferries, with the friction that the government is trying to introduce for people coming to the UK? Is this all part of one post-Brexit package of tougher borders and sort of Fortress UK, which unfortunately turns out is quite hard to leave as well as to enter?

Rhys Clyne
Yes, I think deliberate friction, as you put it, there is a good way of describing it because as Stephen was saying, these are inevitable consequences of not being in the single market and customs union. And also this is a problem in terms of leaving the country and checks at the border both for passengers and goods. That’s going to get worse before it might get better. So we know that the French are going to introduce finger scanning and then eventually advanced visa systems, which are going to create more of that friction.

Miranda Green
This is for people going from the UK to France.

Rhys Clyne
Exactly.

Miranda Green
Right.

Rhys Clyne
On Wednesday, the Cabinet Office released details of its latest plan for when it would phase in further checks on different sorts of goods. And obviously the government has tried to delay that as long as possible, but that is going to be another source of that deliberate friction, partly as a consequence of Brexit. On the asylum side and the coming into the country, we are out of the Dublin arrangement.

Miranda Green
The Dublin arrangement having been whilst we are an EU member.

Rhys Clyne
The ability to remove people to other EU member states . . . 

Miranda Green
That they had travelled through on their way. Yeah.

Rhys Clyne
And ultimately that is one reason why the government is in the position it is in now, where it has very limited capacity to remove people from the UK. And that there is the source of the friction on the asylum side in that it’s trying to make people inadmissible to the asylum system if they’ve travelled here by small boat, but it doesn’t have anywhere to send them.

Miranda Green
You’ve been looking, I know, at the legal problems that some of the government’s plans might hit in terms of removing asylum seekers and deterring immigrants as they see it.

Rhys Clyne
Yes.

Miranda Green
Choppy, choppy waters ahead for them, even if they think they’re doing . . . 

Rhys Clyne
Very choppy waters. We saw earlier in the year the High Court judgment that said that in principle the government’s Rwanda asylum scheme was lawful but that there were a raft of considerations the government needed to make when making decisions about individual cases. And that process means that the Rwanda scheme is not going to be imminently enacted if it is, as the prime minister seems to have hinted in his answers to press questions on it recently. But even beyond that, we see legal challenges everywhere the government turns. You’ve seen Conservative MPs and councillors in Dorset suggesting that they will challenge the barges policy, for example. So another potential legal challenge there. And the home . . . 

Miranda Green
This is the barge on which they are planning to house 500 male asylum seekers off the coast of Dorset.

Rhys Clyne
Exactly. And you’ll see there a more extreme version of the tension that we have seen playing out over the past couple of years, where councils have been deeply unhappy about the way in which the Home Office has procured accommodation in their local areas for asylum seekers waiting decisions. Now in the past that has involved a lot of hotel accommodation, but what we’ve seen playing out with the Dorset council statement on the proposal to use the barge is another sort of challenge to that Home Office procurement of sites.

Miranda Green
Stephen, it’s really interesting, isn’t it, ’cause Rhys is talking there about a whole new level of political tension between local Tory MPs and councillors about the barge, for example, and the central policy direction of Rishi Sunak and Suella Braverman, ’cause you have to assume Rishi Sunak is backing her in these policies. What’s going on here politically? They must think there is some massive political boon to this Fortress UK thrust of policy, but clearly it’s not gonna impress people sitting in coaches waiting to get on a ferry over Easter. Who is it designed to impress?

Stephen Bush
I would say actually, Rishi believes this stuff. It’s not a posture. Yes, it is also true to say that when he was running for leader the second time and he knew that if he got above a certain number of MPs, he would be able to see off the membership round and win by default. And he knew that getting Suella on board was a big part of that. But when they were talking about migration policy, they are aligned on a lot of this stuff. Now she is visibly in the Commons not particularly across the brief and doesn’t respond very well and sends Robert Jenrick an awful lot. But he does think very strongly that the history of the United Kingdom is you have fairly liberal migration policies, then you have a backlash. That backlash is very painful, particularly for visible minorities. That’s the history of Britain since the war. So some of it is just about avoiding that.

But it is also, of course, about the fact that they do have a very real problem losing votes, firstly to reform the successes to the Brexit Party, but also to abstention to the Sofa. And if we think about the last two elections, we’ve had, right, 2017 very close election; 2019, a landslide defeat for the Labour party. The big difference was that a bunch of Labour voters transferred from the Labour column to the Sofa and the fear, if you don’t get control over this stuff, is a bunch of Conservative voters transfer from the Conservative column to the Sofa.

But exactly as you say, there is a really important division here between the national impulse to go restrict, restrict, and what that does locally. In many ways, this is the same dynamic as New Labour had from 2001 onwards, right, where they had a problem with free movement. So they had a bunch of things, you know, restricting asylum seekers’ right to work, which made voters nationally go, oh, you’re tackling it. But it was a bit of a social and economic disaster for the areas around Kent and Dover. And the problem for the Conservatives now is, do you end up in a situation where you give these speeches, the voters nationally like them, but it makes the social and economic problems in Kent, Dover and other border areas worse. When you talk to conservative strategists, they go, look, we will always be seen as being more concerned about this problem than Labour. So as long as we look like we’re trying to tackle it, we will get rewarded electorally.

Miranda Green
Right. And you certainly get that feeling from Labour politicians, don’t you, that they feel they’re on the defensive on this issue rather than being able to go in for the kill on Tory mistakes, even when those mistakes are quite egregious. Rhys, what do you think about this aspect of what the government thinks is the political reward for these policies and also this idea, I suppose, that they need to look as if they’re in control? Because some might argue that the scenes at Dover this week do not demonstrate a government with grip. And grip is obviously the sort of number one hygiene factor, as it were, that the public depends on for a government to provide.

Rhys Clyne
Yeah, well, I think Stephen’s first point was bang on that we can over-egg the extent to which the prime minister and home secretary are further apart on their attitude to this. And one of the ways in which it’s useful to stress test that is to look at their different answers to questions on what is known sporadically in the Home Office as sort of pull factor orthodoxy. So what I thought was really interesting in the latest liaison committee, for example, was Rishi Sunak was asked about the provisions in the illegal migration bill that would allow the removal of children who have arrived in the UK irregularly. He suggested that it was important that the government did not create incentives that would make it more attractive for families to try to make those crossings across the Channel. And essentially, that he’s echoing that same pull factor orthodoxy which is — and if you make the system harsher — you can deter people. And that’s what’s behind the bill. That’s what’s behind the Rwanda scheme. That’s what ultimately is behind the barges announcement on Wednesday. And that is step in tow with the home secretary.

Miranda Green
And what do you think then, about who they’re aiming these policies at and the political pay-off?

Rhys Clyne
Well, there’s clearly been the assumption that there is sort of a contingent of voters, of sort of red wall voters, if you like, that this will appeal to.

Miranda Green
They’re former Labour voters.

Rhys Clyne
Absolutely. But what I think is really interesting, and Stephen will know more about this than me, is the extent to which views on those issues are contingent on delivery.

Miranda Green
Yes.

Rhys Clyne
And the prime minister has pledged to stop the boats. He set a timeline on clearing the legacy backlog of asylum cases, which is really tough. What happens when we get towards the end of the year and these haven’t delivered?

Stephen Bush
Yeah. So the only interesting thing is, is that it would be very easy to imagine having a conversation not unlike this in 2014, where the Conservatives had a net immigration target you could only have achieved by, basically by having a very deep and painful recession. They didn’t hit this. Now, when you talk to Labour veterans of a certain age, they go, well, it doesn’t matter, they’re not gonna hit this target. Because of course what happened from 2014 onwards, basically after the euros, and in fact, I remember senior people in Downing Street coming round to various people in the rightwing press and going, look, you’ve had your fun flirting with Ukip, but it’s time to stop Ed Miliband. And the rightwing press did go into loyalty mode in the run-up into 2015. Stories about the net migration target did vanish from the front pages and although they hadn’t hit the target, they were able to imply through the silence that they had.

There’s no prospect that the boats are gonna be stopped. But will stories about the boats vanish from the Mail and the Telegraph? Hmmm, maybe. They’re clearly gonna vanish from the Times, right? The Times is clearly now on a trajectory where they’re Rishi Sunak’s biggest supporters’ club in the media. But I was speaking to a Conservative MP and we were talking about this dynamic, and they said, but look, the big change is in 2015. My headache about immigration stories came from the front page of the Mail and the Telegraph. And they said, now my headache comes from Facebook and WhatsApp. And the prime minister can’t sit down in a room with every like, active online sort of boomer who’s on WhatsApp sharing memes about boats and go, no, no, no, no, my dear chap, don’t you understand, we need to focus on beating Keir Starmer. So I think we are now in a very different media situation where we probably are going to have stories about the failure on boats running all the way up into the election.

Rhys Clyne
The other point is, it buys them space on the wider immigration argument, right? I mean, Braverman had a huge bust-up with Truss last year about liberalising market rules. Being tough on asylum sort of buys space to be a bit more liberal on that side of the policy.

Stephen Bush
Yeah. The ironic thing is, in many ways we’ve left the EU to end up with basically the same immigration policy mix as we had under New Labour, where they would go, there’s lots of free movement, but don’t worry, there’s a lot of cruelty towards asylum seekers.

Miranda Green
And interestingly we’ve also potentially created a whole new category of local Tory Nimbys to protest the central government policy.

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Miranda Green
Stephen Bush, Rhys Clyne, thank you both very much.

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Miranda Green
Margaret Thatcher called him “my brilliant chancellor”. Prime Minister Rishi Sunak said he was an inspiration. Nigel Lawson, who died this week, loomed large during the 1980s, presiding over an economic boom and credited with the tax cuts, privatisations and deregulation that released those animal spirits in the City of London. That wasn’t the whole story. A bust followed the boom and he fell out dramatically with Mrs T. But here’s a reminder of Lawson in his pomp. The Budget announcement on BBC Television back in 1986.

Nigel Lawson
And that’s why am making it possible for the first time for ordinary people to buy shares in British industry without having to pay a penny of tax on the proceeds. We’ve come a long way together In the seven years since you first entrusted us with the job of governing Britain. But there’s still a long way to go and a lot to do.

Miranda Green
I’m joined now by Chris Giles and Patience Wheatcroft to discuss his enduring influence on Conservative economic policies. Chris, it’s said that Sunak even has a picture of Nigel Lawson on his wall in Downing Street and the FT this week wrote of the long shadow cast by his policies. And of course, he did also champion Brexit. Are we still living in the Lawson era? Tax cuts are certainly on the agenda.

Chris Giles
I think we’re not quite living in the era, but he is one of the most consequential chancellors of the postwar period and certainly in the last 40 years, only Gordon Brown as chancellor would rival him for his importance. So what is the legacy? I think, you know, tax cuts being one of the key aspects that the Conservative party at least, is looking back to the Lawson period with some sort of nostalgia. When he became chancellor in 1983, taxes as a share of GDP, sort of taxes as a proportion of the whole economy that is, was 33 per cent and he got it down to 30.7 per cent. These are the current figures. Now on the same measure, they’re 30, nearly 37 per cent and going up. So taxes are a lot higher. That’s why I say, we’re not quite still living with Lawsonism, but it has a huge influence over just some of the way we think about taxes as well, particularly cutting income tax, raising some other taxes, trying to change the way we have incentives flowing through the tax system. And it was an era that if any Conservative chancellor, in fact, any Labour chancellor now would kill for the sort of economic performance of the ’80s, leaving aside the Lawson boom right at the end of it.

Miranda Green
Patience, thanks so much for interrupting your Easter break to give us your perspective. During all those years that you’ve covered business and indeed the City as a journalist and newspaper editor, he must have been a giant figure?

Patience Wheatcroft
Absolutely. He was an absolutely pivotal figure. And if Liz Truss had her way, we’d be right back into the throes of a Lawson-style environment now. But as Chris points out, things are very different. I think, however, that the legacy is by no means all positive, and it has affected this country really in quite a deleterious way over a long period. Because while Lawson was a great believer in low taxes and how they would motivate the private sector, he and Mrs Thatcher both shared a real dislike for the state. And that meant that really he didn’t espouse the idea of major investment. And certainly, we’re still suffering from a lack of public investment going back to when he was in charge.

Miranda Green
And even at the time I guess, in the wake of the Big Bang, the deregulation of the City, it was quite politically divisive even during the boom times, right?

Patience Wheatcroft
It was hugely divisive. And he very much shared Mrs Thatcher’s view that the unions had to be curbed. And that was absolutely right. They had become a really destructive force in this country. But the Lawson boom gave a lot of people their head. But before that, there had been real misery and many people did find themselves in straitened circumstances. And of course, the boom eventually, as almost inevitably happens, led to a bust which did huge damage to an awful lot of people. So it was by no means an unadulterated success.

Miranda Green
Chris, we’ve talked a bit there about the bust that followed the Lawson boom. What do you think were his great successes and failures as chancellor for you?

Chris Giles
I think the great successes were sorting out a lot of the problems along with the rest of that government that clearly existed in Britain. So some of the deregulation, we’ve really not gone back on that at all. We now celebrate a market economy, relatively flexible labour markets. That wasn’t the case in the early 1980s when Lawson came in, but I think he suffered from a very great deal of hubris, and when he saw the economic data going in his direction, he thought that was because he was brilliant and the government was brilliant rather than it just being a boom that was gonna turn into a bust.

And as he’d said in his memoirs, he does regret some of the things like abolishing double mortgage interest relief. That was when couples, unmarried couples, could get twice the mortgage interest relief at £60,000. But he announced it in the 1988 budget to come in in August of ‘88 from March to August. And in that period, the housing market went completely potty as everyone wanted to get in before it was taken away, because if you had it, you could keep it. And it caused a huge housing boom, and then the housing bust, which we lived with until about the mid-1990s. And so there was a big hangover, and a lot of it came from hubris.

Miranda Green
But you’ve also talked about the laws and tax reforms a bit. Could you explain briefly what was significant there?

Chris Giles
I think getting rid of some of the highest marginal rates of income tax. So understanding that if you tax people at 60 or higher per cent, actually you’re not gonna raise very much. And it’s better for incentives for everybody to have a slightly lower rate and the government doesn’t lose out very much. We’ve really not gone back from that. So he brought all the rates down in the ’88 budget from 60, the highest rate of income tax, down to 40. Now, of course, you actually have to earn a lot more money to pay higher rates of tax. And one of the reasons there’s more tax collected these days is that more people are paying these higher rates. But also, take capital gains tax. He set it at exactly the same level as income tax in real terms. Now, if Sunak had paid that sort of capital gains tax, he wouldn’t be facing questions today about why is this all his investment income paying less tax than the ordinary teacher in the classroom or hospital doctor who might have found the politics slightly easier now?

Miranda Green
Really interesting point. Patience, Chris has referred there to his personality. He was a kind of larger-than-life figure in all senses, and he did come across as quite arrogant in a way. And then, of course, in the end, he fell out with Margaret Thatcher, clashed with her over her economic adviser, Alan Walters, and ended up resigning from leading the Treasury. I mean, clearly it was a battle over policy, but was it also just that he was such a big figure and a challenge to Margaret Thatcher’s authority?

Patience Wheatcroft
I think that Mrs Thatcher was absolutely right when she said just before making him chancellor that she had come to share Nigel Lawson’s high opinion of himself and . . . (laughter)

Miranda Green
That’s a wonderful quote.

Patience Wheatcroft
That summed it up. He never, ever doubted that he was right. And I think the other character trait that he showed all the way through his career was that he was not interested in making friends. Nigel Lawson was not a clubbable type at all. In fact, he said a popular chancellor isn’t doing his job. And so both in his private life and his political life, he wasn’t interested in winning friends. He was interested in the intellectual argument. And he certainly took the view that when it came to government, the relationship between the chancellor and the prime minister was all-important. In his view, that seemed to me the prime minister agreeing with the chancellor (Miranda laughs).

That didn’t leave room for anybody else, such as an adviser like Alan Walters, and he was just not prepared to put up with Mrs Thatcher listening to somebody other than the chancellor, particularly when they disagreed. And the main thing they disagreed about at that stage was the European monetary mechanism, and he effectively wanted to be part of that. Mrs Thatcher didn’t. Alan Walters thought it was a crazy idea, but he was not somebody to be told what to do, and if the prime minister wasn’t going to give him her full backing, then it was a case of Walters goes or I go, and he went.

Miranda Green
And Chris, it’s been said that that row between Nigel Lawson, Margaret Thatcher and Alan Walters was the beginning of the Conservative party’s civil war over Europe, in a sense. And then, of course, in later life, Lord Lawson was very, very prominent in the Brexit side of the argument, indeed was chairman of the Vote Leave campaign. The official campaign was very tough about the Remain campaign — scathing, in fact.

Nigel Lawson
So all they’re trying to do is scare the pants off of everybody about leaving. But it is crazy. Most of the countries in the world are outside the European Union and they’re doing very nicely, thank you.

Miranda Green
And he saw the position of the City of London as a financial hub as totally unassailable, which is what he wrote in an op-ed for the Financial Times in 2016, just after the referendum. What do you think about his late, very vocal support for Brexit?

Chris Giles
We knew he’d turn. It was rather ironic; he was on the pro-European side in the 1980s and then he’d flipped like lots of people in the Conservative party did. I think the evidence suggests that he was wrong. The City’s position, as we know at the moment, is not unassailable. In fact, it’s struggling. Economic performance of the UK economy has not been strong, and as far as we know, to date Brexit has been bad for the UK economy and is pretty much going along the lines of all the people he said were scaring the pants off people — that is actually what is happening.

Miranda Green
Patience, I just wondered if you could just give us a feel for what he was like if you came across him in the House of Lords. He also was very vocal on climate change. Well, I suppose you could say he was probably the UK’s most prominent denier.

Patience Wheatcroft
He was always a bit pompous. When I first met him when I was at university as treasurer of the debating society. And we got a very young Nigel Lawson, who was then a journalist, to come and debate with us. He remained actually quite a pompous chap even at the end, and his views were always held with total conviction. And so without being a scientist, he espoused the hostility to the whole climate change debate, but would brook no opposition. Anybody who thought differently from him was clearly stupid, and that was his attitude on virtually everything. And I thought it was a wonderful irony, but while he was absolutely opposed to Britain being part of the EU, he delighted in travelling every Thursday back to France, where he lived in some splendour, only returning to the UK on Mondays. So it was a very peculiar attitude that he exhibited towards our European neighbours, I think.

Miranda Green
There we are, the never-clubbable, always-outspoken Nigel Lawson. Chris and Patience, thank you so much for joining me. And that’s it for this episode of the FT’s Political Fix.

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