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The Economist
May 5th 2018
Britain 55
2
Citizenship applications
No sex, please, we’re the Home Office
I
N ITS drive to get net migration below
100,000 per year, the government has
made it drastically harder to gain British
citizenship. The number of foreigners
getting British passports plummeted
from194,370 in 2012 to just123,229 last
year, following a tightening of the rules
for bringing over familymembers and a
steep increase in the cost of applying.
Themost common reason that sub-
missions are rejected, however, is a rather
vague one. Since 2012 the number of
applications thrown out under a “good
character” clause has doubled (see chart).
In 2016, themost recent year forwhich
data are available, thiswas the cause of
44% of all refusals.
What constitutes bad character, in the
eyes of the Home Office? Committing
terrorismwill do the trick, official guide-
lines explain. But somight receiving a
police caution, skipping a tax bill or
“recklessly” accruing debt. Immigration
lawyers believemost of the increase in
rejections is down to stricter consider-
ation ofminor offences. In one case, a
Botswananwho had served in the British
army failed the character test because he
had broken the speed limit on amotor-
way (the decisionwas later reversed in
court). Solange Valdez-Symonds, head of
the Project for the Registration of Chil-
dren as British Citizens, an advice service,
reports an increase in youngsters being
turned down because ofminor offences
committed by their parents.
Yet the definition of bad character is
extraordinarily broad. The guidelines list
characteristics that “should not normally,
of themselves, be relevant”, including
drinking, gambling, divorce, promiscuity
and “eccentricity, including beliefs, ap-
pearance and lifestyle”. But, they go on,
somewhat ambiguously, applicantsmay
be rejected if “the scale and persistence
of their behaviour” hasmade them
“notorious in their local or thewider
community”. The Home Officewas
unable to say howmany of the 5,525
people rejected for their character in 2016
were turned down for being persistently
and notoriously promiscuous. Lawyers
say notoriety is very seldom invoked.
Still, for a department under intense
pressure to get migration numbers down,
the vague character clause offers a simple
way to increase rejections. Officials can
turn down a candidate if they have any
unspecified “doubts about their charac-
ter”. For applicants, it canmake the pro-
cess an expensive lottery. And after the
events of recent weeks, manymight
wonderwhether the Home Office, of all
departments, iswell placed to judge
others on their good character.
Promiscuous? Divorced? Eccentric-looking? Youmaybe denied a passport
Out of character
Source: Home Office
Britain, citizenship rejections under
the “good character” clause, ’000
0
2
4
5
3
1
6
2002 04 06 08 10 12 14 16
that led to Britons being shabbily treated.
Still, the retired home secretaries’
chorus has won some converts. William
Hague, a former Tory leader, agrees that
the case for cards is now stronger. “We
Conservatives were against this a decade
ago, but times have moved on,” he wrote
this week. Britain already issues migrants
from outside Europe with
ID
cards in all
but name, andmight do the same for Euro-
peans who stay after Brexit. Some say it
would be fairer for everyone to get them.
Charles Clarke and Mr Johnson were
among those given the cards in 2009. Mr
Johnson still carries his in his wallet. Mr
Clarke used to produce it at airports “just to
prove that I could”. When the scheme was
ditched, “they refused to refund me my
£30, which I thought was tyrannical.” It
could yet prove a long-term investment.
7
W
AITING in a studio for a
TV
inter-
view on April 30th, Mike Coupe, the
boss of Sainsbury’s supermarket, was
caught on camera quietly singing “We’re in
the money” to himself. Having just an-
nounced the biggest deal in the grocery
business for over a decade, it is easy to see
why the tunemight have come tomind.
Nonetheless, hehad toapologisequick-
ly, for fear of appearing rather smug—and
for getting ahead of himself. Sainsbury’s
proposed merger with Asda might boost
the two supermarkets, but the competition
authorities could well rule against it. The
proposed deal is another example of the
unwelcome and increasing concentration
of capitalism in Britain.
Some consolidation in the cut-throat
supermarket business had been expected.
A tie-up between the second-largest store,
Sainsbury’s, and third-largest, Asda,
owned by America’sWalmart, makes a lot
of sense for both parties. Combining mar-
ket shares of 15.9% and 15.5% respectively,
according to Kantar Worldpanel, the new
entity would leapfrog the current market
leader, Tesco, which has 27.6%.
Scale is vital to grocers, giving them
more muscle to negotiate with suppliers.
Sainsbury’s and especially Asda have
beenhit by the success ofAldi and Lidl. Ten
years ago the German discounters had
about 4% of the market. Now they have
nearly 13%. Mr Coupe says the proposed
merger could cut prices across the new
group by 10%. Whether this would be
enough to compete with the discounters
remains to be tested.
Synergies between the two companies
could save £500m ($680m). Sainsbury’s
bought Argos, a home retailer, in 2016 and
would roll out Argos stores inAsda aswell.
Sainsbury’s could exploit Asda’s advanced
logistics systems, while Asda would bene-
fit from Sainsbury’s much stronger pres-
ence online. In that market they face a new
competitor in Amazon, which started sell-
ing groceries in Britain in 2016.
The two firms have got a lot of what it
takes to get along. But competition regula-
tors may feel differently. There are many
places where Sainsbury’s and Asda stores
are close by. Regulators may thus insist on
the sale of one or other. They could even
block the deal altogether.
The deal comes in a context of increas-
ing concentration in many industries. In
the past decade Britain has witnessed
about $2trn-worth of mergers and acquisi-
tions of domestic firms. Our analysis sug-
gests that, relative to the size of the econ-
omy, that is over a fifth more than in
America over the same period. American
economists and politicians are increasing-
ly concerned that their economy has be-
come too concentrated, limiting competi-
tion and eroding consumerwelfare.
Perhaps Britain should worry more,
too. Over the past two decades corporate
profits as a share of
GDP
have been roughly
50%higher than their long-termrate. Profit-
ability, as measured by return on capital, is
also near a historical high. Regulatorsmust
askwhether companies are in themoney a
littlemore than is healthy.
7
Sainsbury’s and Asda merge
In the money
Abig shake-up in the grocerymarket
could be blocked by regulators
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