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The UK Powder Keg

January 6, 2011

There has been roiling dissatissfaction with high immigration in the UK and with good reason – the over-crowded island admitted more than five million foreigners between 2000 and 2009. The three main parties avoided the issue as far as they could. Now the coalition government is winding back the intake. It knows the simmering discontent is serious and it has no alternative. The political class and the business lobby had stretched public tolerance and now nervously they’ve got to wind back the annual level from around 200,000 to somewhere in the tens of thousands by 2015.

Yes, just like the doubling of the intake under Howard – done surreptitiously, in the dead of night – which because of a public backlash has now to be corrected. And can only be corrected with an unambiguously lower net annual intake. And the Gillard government will have to make it real and make it stick.

That aside, my source – an Australian living here – is struck by the shocking inequalities in UK society. They are now being aggravated by the biggest tax increases in peacetime history. How this works out politically and socially will be the big story of 2011.

The good news is that the Lib- Dems are being devastated. Deservedly. They would face a wipe-out in an election, their support the lowest for any third party in 30 years. Their 57 members would be reduced to just 15 according to the latest polling . They, more than the Tories, are taking the blame – appropriately, given the gap between their third party, “plague on both their houses ” rhetoric in the campaign and the reality of what they have had to do in office.

Here, however, is a somewhat heretical view of the Gordon Brown record. While some of the Labour government’s social reforms were welcome ( see below on their childrens’ programs ) there seems little doubt Brown pushed public spending beyond what was wise. And Blair did not rein him in when it came to ambitious public sector expansion – Brown had too much support in the party not to get his way.

This did not produce a debt crisis – British borrowings are among Europe’s lowest. But it did leave the budget vulnerable to a world downturn. Here’s the old story ( also see below ) : if social democratic governments do not base their programs on fiscal responsibility then the resultant conservative backlash can sweep away most of their achievements in social reform.

And that’s happening here now.

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