We’re talking about hugely divisive issues here – will you begin by summarising what multiculturalism is?

Multiculturalism is an enormously contested term. In everyday use, what many people really mean by multiculturalism is multiracialism, ie living in a multiracial society. It isn’t that. It’s a term describing the management of majority-minority relations and immigration. Britain is multicultural as opposed to France being, supposedly, assimilationalist. And usually it is not meant in a neutral way. Multiculturalism implies an accommodating attitude to newcomers and minorities – giving people space in order to remain different, up to a point. I think it’s usefully subdivided into soft and hard, or liberal and separatist, multiculturalism.

Hard multiculturalism puts your ethnic identity before your citizenship. Soft multiculturalism ensures citizenship comes first. Liberal multiculturalism is about giving space to newcomers to adjust themselves over time to a country. Separatist multiculturalism says that so long as you do the absolute minimum – obey the law and pay your taxes – then you can use that space to barricade yourself off and create a sort of internal colony. That’s a problem, and I think it has happened to a certain extent with some groups.

So multiculturalism both works and doesn’t work. The space metaphor is a useful one. Some groups have used their space to better become British, or British Pakistani or British African. Even the laissez-faire form of multiculturalism works for those who use it to launch themselves into British society. But other groups have not been so successful. Separatist multiculturalism doesn’t work for either the minority or the majority.

In a nutshell, what is the historical context of today’s multicultural Britain?

Britain had an open door policy from 1948 to 1962, when anybody from the empire or Commonwealth could come and live in Britain. That is essentially saying to some 600 million people around the world, most of them from the working classes or the peasantry, that there are no restrictions on their entry. Which was a magnificent idea, but also a bit of a disaster. Those who framed the legislation thought that no-one would come, but they did – half a million came between ’48 and ’62, albeit a small number compared to today’s figure.

Which is over half a million during the last year alone.

Yes, in terms of inflow – although there is also quite a bit of outflow. We had a parallel situation two generations later in the early 2000s, with Eastern Europeans coming to Britain from the EU. Only 15,000 were meant to come, but in reality a much larger number did.

What are some of the problems thrown up by large scale immigration?

If immigration levels are too high, or it happens too quickly and the pace and scale of change is too great, then it causes people to turn in, to hunker down as Robert Putnam puts it – they become less willing to share resources and do all the things we require of people in a modern welfare state. In the long run, that is a problem. Because of our laissez-faire multiculturalism in Britain, we have never been very good at integrating people. That goes all the way back to the way British colonialism worked.

We had a light touch to our colonialism, often ruling through local elites like maharajahs in India. We had, if not an equal philosophy, then a respect for different cultures. We didn’t want to turn everybody into a Brit, and we brought that idea back to post-war immigration. When the empire came home, we had the notion of the imperial family. We assumed that because of our colonial relationship with people from Pakistan, for instance, they would be absorbed into British society and the white working class would embrace them. The reality was very different.

What is to be done?

I think levels of immigration must be reduced. I certainly favour a cap, although it’s a little arbitrary and difficult to manage. But we also need to relearn how to encourage people to join in. We need to develop better ideas of integration and of what it is to be a British citizen, particularly in areas with high immigration settlement like Tower Hamlets in London, dominated by Bangladeshis, or Bradford in Yorkshire dominated by Pakistanis.

Britain has not set up patterns of residence, schooling and employment that make it easy for people to join in. Certain groups that have the cultural resilience do join in and often flourish, even if they often remain residentially segregated. But other groups tend to live separately in all areas of life, and have reproduced many of the institutions of their home country in England.

So the point is that as well as privileges, there are responsibilities to being a British citizen. But what does it really mean to be British?

I hope it just happens organically in everyday life. It’s about creating a common life. And that common life remains completely compatible, in my view, with hanging onto most of the traditions of where you came from. Obviously we believe in freedom of religion and cultural expression, but within the context of a British system and polity – a British way of life.

National identity is an invitation to become more alike over time. That obviously conflicts with many of our modern liberal notions of diversity. I think national identity and a degree of diversity are compatible, but you have to be careful about the relationship between them – particularly if you are a supporter of a generous welfare state, or of a political system without too much balkanisation or voting by ethnicity, which is the case in the United States with ethnic lobbies fragmenting the notion of citizenship.

Separatist multiculturalism has allowed – even encouraged – people to live apart. It also says that in certain areas the majority must change to accommodate the minority. We saw that over censorship, in the fatwa against Salman Rushdie or the Danish cartoons. Or often you see it in trivial ways, like not serving alcohol at a party because there are Muslims coming.

On top of that, there’s a feeling among many majority taxpayers that their money goes into a welfare state which is drawn on by a minority who are somehow less British.

One of the models we don’t want to follow is that of the United States. The US has a relatively ungenerous welfare state, by our standards anyway. That is partly because of a historic anti-state sentiment but it is also because of racial segregation. Too many people on benefits are African Americans or Hispanic. That’s why a lot of the US social security budget has been very unpopular. It is seen as funding minorities.

The welfare state in Britain is seen by most people as a cross-generational club, where you give in what you have to and draw out what you need. It’s a perfectly reasonable, common sense idea that you have to pay in first for a period before drawing out. There is also a separate issue about who is using the system. About 40% of minority Britain is classified as poor, compared to 20% of white Britain. This is why I worry about the American trend – that a disproportionate number of minorities are in poverty and therefore drawing disproportionately, one assumes, on the welfare state through housing benefit, income support and so on.

And that feeds resentment among other Brits.

Yes. I do think people are reasonably fair-minded. They see immigrants as coming here, working, and paying into society. But they also see others coming here and immediately becoming unemployed – which is not always their fault. If immigrants are well integrated this all doesn’t matter so much. But too many are not.