Immigration

"State multiculturalism has failed." Angela Merkel put voice to that sentiment last October. Now it David Cameron's turn to do the same. In a speech in Munich today, the Prime Minister has taken a rhetorical torch to Islamic extremism. "Frankly," he says, "we need a lot less of the passive tolerance of recent years and much more active, muscular liberalism." It is, at the very least, a significant political moment. What Cameron is doing here – as explained by Charles Moore and Paul Goodman – is publicly signing up to a philosophy of the world. It is a philosophy that rejects the idea that extremism should simply be contained. Instead, it says that extremism must be fought – and that means engaging in a battle of ideas.

It's Christmas Eve, and the Daily Telegraph have wrapped up their sting operation in time for tomorrow. The final victims are the Foreign Office minister Jeremy Browne and the children's minister Sarah Teather. As it happens, Teather gets off without blemishing her copybook: her greatest indiscretion is to claim that Michael Gove is "deeply relieved" to be in coalition, as it means more funding for schools. Browne, though, is a touch more forthright: he says that Tory immigration policy is "harsh" and "uncharitable," but that Lib Dem involvement will provoke a "more enlightened" outcome. He adds that the Tories' EU grouping contains parties that "are quite nutty and that's an embarrassment to them.

The High Court has just declared the government's temporary cap on non-EU immigration is unlawful. Its ground was that the cap was not introduced with proper parliamentary scrutiny. However, the annual cap, which will not be in place until April next year, is not affected by this decision. But without a temporary cap there'll be a spike in applications as people try and beat the cap. It'll be fascinating to see how the PM and the Home Secretary respond to this ruling. At the moment, the government is playing it softly, softly. But there are Tories who think that the government cannot just allow a key part of its flagship immigration policy to be struck down by the courts. The combination of judges and immigration is a red rag to large sections of the Tory party.

The FT’s Alex Barker has made an important discovery in the OBR’s report. The coalition’s immigration cap will make no impact on net migration. ‘The interim OBR’s June Budget estimates of trend growth estimates were based on an average net inward migration assumption of 140,000 per annum…. Since June, the Government has announced a limit of 21,700 for non-EU migrants coming into the UK under the skilled and highly skilled routes from April 2011, a reduction of 6,300 on 2009. At this stage, we judge that there is insufficient reason to change our average net migration assumption of 140,000 per year from 2010, which remains well below the net inflows of 198,000 seen in 2009.

Agreement has been reached on the troublesome immigration cap. The BBC reports that skilled non-EU migration will be limited to 43,000. This is just a 13 percent reduction from this year’s cap and there are numerous exemptions to be made; notably, inter-company transfers will not be included when workers earn more than £40,000 per annum. This is a considerable moment for the coalition because the cap was thought unworkable. The Conservatives have their cap, a pep pill for the embattled Home Secretary.  But this is also a victory for Vince, who is being feted by businessmen across the airwaves this morning. Cable and May have also been praised by Migration Watch’s Andrew Green for formulating policy to tackle Britain’s net migration.

IDS has played the party politics of welfare reform adeptly. He has built a coalition beyond the government, convinced of the need for urgency and dynamic reform. Even Labour is on side, only criticising when valid and necessary. It has not proposed a comprehensive alternative because it is protecting its record in government - sensing, correctly, that it is vulnerable to its history. Douglas Alexander rallies to New Labour’s defence in the Independent on Sunday. Labour’s record on welfare was not uniformly baleful: Purnell, Hutton and Murphy did important work, on which IDS has drawn. But Alexander overlooks some inconvenient truths.

An intriguing argument from the Economist’s Bagehot this week: the government’s liberal prisons policy will force Coalition 2.0 to tack to the right on Home Affairs. ‘If the Lib Dems’ sway on these issues was foreseeable, so are its political dangers. One is Tory anger. Even some of the Conservative MPs who agree with the Lib Dems on control orders worry about their liberal line on crime. Behind the scenes, figures from both parties are coming together to plan “coalition 2.0”—a policy programme for the second half of the parliament. Among the rumoured Tory representatives are confirmed hawks such as Michael Gove, the education secretary, Owen Paterson, the Northern Ireland secretary, and Tim Montgomerie, a well-known blogger.

Putting Ed Balls into Home Affairs is like trapping a bee in a jar: he’ll come out furious, and anxious to sting. In his new brief, he has immigration. And he’ll know Cameron’s vulnerabilities. The greatest threat facing the coalition doesn’t come from Ed Miliband. It comes from a deep dysfunction in Britain’s economy: that when it grows, we just suck in more workers from overseas. Balls knows this, and the resentment it causes in affected communities – which is why he was talking tough on immigration during the leadership contest. He knows where the economic bodies are buried: he dug the graves. He also knows that unless Cameron manages to make work pay, he’ll end up with what is – for UK workers – a jobless recovery.

I wonder if Theresa May felt faintly apprehensive this morning. It must bad enough to awake and remember that you’re the Home Secretary, held responsible for every immigrant, every strike and every crime committed in Britain. Northern Ireland is more poisoned ministerial chalice, just. Now, she is being shadowed by Ed Balls, a ravening attack-dog liberated by the opposition. Balls has re-invented himself as a traditional Labour politician, casting himself as the champion of the working class. He says, accurately, that the poor are the victims of crime and the victims of unbridled immigration and social dislocation and his opposition will be ardently authoritarian. May will have to cut police numbers: Balls will attack her.

The coalition’s immigration cap is, as several Conservative Cabinet ministers have pointed out privately, flawed. It threatens to cap the kind of immigration that bothers almost nobody, high skilled foreign workers coming to this country to do a specific job. As Ken Clarke has told colleagues, the problem is that Labour — albeit right at the end of their time in office — stopped non-EU low-skilled immigration. So all there was left to cap was high-skilled immigration.   But there is a potential solution that would enable the cap — a Conservative manifesto promise — to remain in place, but also deal with Vince Cable and businesses’ objections http://www.thisislondon.co.