Budget 2010 -- first steps to a new decade

Labour has to show it has a plan for global growth. And that starts with jobs.

The Chancellor's Budget message is clear: we are optimists about Britain's future. We believe that Britain can win in global markets. And here at home, the right decisions -- about jobs, tax and public services -- can spread that wealth fairly.

It's a message that matches the mood on the doorstep. And it sets the scene for the decades ahead. Let me explain.

Knocking on doors throughout the winter, I've felt the national mood change. People have gone from thinking a week ahead -- would they still be in a job? Would their hours be cut again? Would another shift get taken off? -- to thinking about the future.

They're asking how we will help them get and keep good jobs. Will they and their kids get public services that help them turn their aspirations into success? And can we regain and retain a sense of community in a world which is changing before their eyes?

These are themes that must be taken forward in our offer to the British people at the next election, which, as Gordon Brown says, will be the first election of the global age.

Globalisation has dominated the years since I left university. Before the crash, the past decade had seen the greatest lift in world trade and world wealth since the Second World War. This great global growth helped Britain grow faster than Japan and continental Europe for the first time in a century.

But the 200-plus residents' meetings, the school-gate surgeries and street surveys I've done in Hodge Hill have taught me a great deal about how people in my constituency think about their community's connection with this new "globalised" world. And it's fair to say that they are not exactly head over heels in love with it.

 

Looking for a payback

Unless we share the "prizes" of globalisation with those who feel like they are paying a "price", people will not vote for it. In Europe, the far right is on the rise. In the US, only 59 per cent support the idea of the free market. There is nothing inevitable about "open".

So, looking ahead from this Budget, we need a manifesto for global gain -- not global pain -- for the aspirational voters who decide the outcome of every election fight. And that starts with jobs.

In Hodge Hill, residents are not just interested in work that simply pays a wage. They want work that paves the way to a better life for their family.

They know that might require them to improve their skills. And they are happy to do it. But they want to know it will have a payback. Which is why skills have to be part of our agenda.

New Labour should be prepared to strike a new bargain with business. We should say: We will invest in the innovation and infrastructure that make you more profitable. But if your workers get skills that help your profit grow, then you should give them a pay rise. This will require us to forge a new partnership with business whereby employees can make progress and get the rewards.

Second, we have to show how public services will add to people's ability to get on and have the quality of life they are aspiring to. As I have argued before, I don't think that means we can limit our agenda to more and more choice.

What people really want is control. Sometimes that means being able to choose a different GP, or a better school a bit further away. But sometimes it means more power to change the school that is at the end of the road, or the beat patterns and priorities of your neighbourhood police team.

We have transformed the quality of public services in Britain. We should be so proud of this that we should never flinch from trumpeting what's changed.

But I think we can also admit that we have spent too long pushing an account of "supply-side" reform in public services and too little about giving users more power. "Choice" promised more than it could deliver because it came without greater control and personalisation. More emphasis on "demand-side" reforms -- guaranteed entitlements to service, online access and customisation, individual budgets -- which in turn shape public-sector provision, must be next.

Third, let's be the party of strong communities. I serve a very multi-ethnic community. But every corner of my community would be more comfortable with change if the people felt the place they lived would still feel like home in ten years' time. People know nostalgia does not pay the bills. But they treasure familiarity. Of habits. Or traditions. Of strong connections with their neighbours.

Yet, right now in Britain, we drastically underestimate how much we have in common with our neighbours: there is no moral schism today in Britain because, overwhelmingly, the law-abiding majority is not only bigger than it has ever been, but it shares some common causes.

Like being a law-abiding neighbour. Like getting a job if you can work. Like being a good parent. Labour is the party of these ideas. But we must also be more imaginative about ways of renewing civic life -- as our great-grandparents were when they built Britain's urban fabric in the 19th century.

 

A network with a purpose

Policymaking in government can help foster a greater sense of community and reciprocity. But one of the other ways in which this can be done is by changing the way our political parties serve our communities, making them a force for social action.

Pretty soon after being elected, I found out that my constituents were much less interested in the minutiae of Westminster-focused constitutional change than I am.

They wanted to know what the Labour Party would do to change what going on outside their front door.

Make no mistake, traditional forms of political reform, such as a democratic House of Lords and votes at 16, both of which I support, will be important at the next election. But this is the hardware of political reform. Let's change the software, too.

That is why we built up a new network of community activists and social entrepreneurs -- two of whom are now standing in council seats for Labour in Hodge Hill in May.

That's why we should all want to transform the mission and purpose of the Labour Party, from being a force that mobilises communities for political ends, to mobilising politics for community ends. You might call it a return to our oldest traditions.

So, in this next election, Labour not only has to show it has a plan for global growth, we have to prove we're the party that will bring home the bacon for ordinary working families. Giving them control over their public services; building stronger communities; and reforming politics on every street, not just at Westminster. It's an ambitious agenda for the next five years -- and one that is Labour to its core.

Liam Byrne is Chief Secretary to the Treasury and Labour MP for Birmingham Hodge Hill.

Liam Byrne is Labour MP for Birmingham Hodge Hill, cofounder of the UK-China Young Leaders Roundtable and author of Turning to Face the East: How Britain Prospers in the Asian Century.

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North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry insiders imply that job creation in the UK could rival that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed only one in seven of the jobs the industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that fracking is an essential part of the UK’s future “energy mix”, which, if produced domestically, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we are only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservatives support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This sentiment was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision as a “fantastic opportunity” for fracking.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because they will either run out or force us to exceed international emissions treaties: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.