The Lib Dems' family feud on welfare

Party activists are seething about the welfare reform bill.

An awful lot of the Lib Dem grassroots spent last week feeling the pain of the betrayed spouse. And it's nothing to do with Chris Huhne

Two weeks ago it was all chocolates and flowers from those on high with the promise of the raising of tax thresholds, and all the arguments and flirtations with other party's policies seemed like another life. We wandered around starry eyed...

...until last Wednesday, when we walked into the smack of firm government, as our MPs - with some very notable exceptions - undid all the good work of so many members of the House of Lords on the Welfare Reform Bill. And it's left a lot of members of the party feeling bruised, bloodied and ignored.

They're not taking it lying down. And it's not just the usual suspects - right across the party, folk are asking our Parliamentarians just what were you thinking?

And what's really riled the troops this time - over and above the fact that they fundamentally disagree with lots of the Bill - is that, particularly where Employment and Support Allowance (ESA) is concerned, it flies in the face of party policy. A policy agreed not in some far distant conference in the long years of opposition, but last September, in Birmingham. And when they get answers - and it's to their credit that our MP's do front up - they don't like them much.

In other parties, policy is generally decided by a small elite. For example, in the Tories, it's pretty much one man, one vote, that man currently being called David. There are plenty in Labour who wish they could say exactly the same.

In the Lib Dems, it's meant to be different. In all those long years of opposition, the final decision on policy has rested with the members through conference. Which apparently worked fine then, but less well now we're in government - because our MPs appear to find themselves conflicted.

Should they represent the views of the party, their own opinion , or the will of the people -like it or not, the welfare reforms are hugely popular with the electorate at large. And to be fair, it's a conundrum Lib Dem backbenchers struggle with over and over again. Every single backbencher in the parliamentary party has rebelled against the government at least once since May 2010, bar one (step forward David Laws).

Nevertheless, there are a lot of disgruntled Lib Dem activists sitting at home right now seething about the WRB. And questioning the way we agree - and execute - policy as a party. There's going to be a right old barney about it, and we'll do well to keep much of it behind closed doors. But I hope we do.

Letting family feuds spiral into the public domain seldom ends well for anyone involved, does it....

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.