Sell: Cable, Umunna, IDS; Buy: sensible backbench Tories

The New Statesman’s political investment guide for 2013.

It has been a turbulent year for Westminster trading. Stock in pretty much everyone and everything has fallen. It’s bearish out there. The outlook for next year is hardly less gloomy. National reserves of trust are at an all-time low. Scarcity of imagination and competence will continue. The market is over-supplied with mediocrity.

Here we present the New Statesman’s political investment guide for 2013.


All three of the main party leaders Ed Miliband, Nick Clegg and David Cameron all look relatively secure in their positions. Miliband is unassailable as long as his party is leading opinion polls. Cameron will be undermined by rebellious backbenchers but will, true to past form, make sufficient concessions to ward off the threat of a credible challenge. The overwhelming majority of Tories recognise the absence of a ready alternative. The Liberal Democrats can hardly be satisfied with their position but a majority seem to accept that unpopularity is a necessary consequence of becoming a party of government and that Clegg, as the man who is leading them on that journey, deserves more time to make it work.

George Osborne and Ed Balls  Alike in more ways than either man likes to admit, neither is liked but both are proven operators with serious staying power.

Boris Johnson The London Mayor can’t advance up the political ladder any further until he is an MP and he can’t run for parliament before the next general election without it looking like the start of a leadership bid but with no vacancy – a very exposed position. So he has to bide his time. But too many disgruntled Tories find him useful as a theoretical foil to Cameron for his stock to fall yet.


Sensible backbench Tories The Conservative leadership will be desperate next year to push forward some moderate voices to counteract the high profile enjoyed by Anglo-Tea Party, Ukip-lite fanatics. Conservatives who sound reasonable and do a good impression of belonging to 21st Century Britain are bound to start cutting through a little bit more. Lesser-known moderate Tories, such as Damien Hinds, MP for East Hampshire, and Alok Sharma, MP for Reading West are worth a look.

Fiscally serious Labour people The premium on Labour MPs who actually think about practical policy responses at a time of austerity is sure to go up. Liz Kendall, shadow social care minister, has a realistic understanding of the fiscal challenge and a detailed grasp of a vital brief. Likwise, Stella Creasy, MP for Walthamstow and scourge of payday lenders. She combines a clear attack line on the rapacious end of immoral capitalism with a quiet commitment to budget discipline. And she doesn’t speak in tedious robotic jargon as pumped out by the party press office.

Chris Huhne? One for the bargain-hunters. There are reports – as yet unconfirmed – that charges of perverting the course of justice that finished the former Energy Secretary’s cabinet career might be dropped. That would open the way for a return to active politics. He’s far too unpopular among Tories and mistrusted by Clegg to get a front line job. But he has enough support in the party rank and file to start causing mischief and right now the price is at rock bottom.


Vince Cable The Business Secretary is seriously over-priced as a consequence of Labour and Tory people ramping up the idea of him replacing Clegg as Lib Dem leader, largely just to destabilise the third party. It won’t happen. Cable doesn’t have a big enough base among Lib Dem MPs and, in any case, he wouldn’t want to be the man to wield the knife against Clegg, knowing that doing so would diminish his chances of wearing the crown. The Cable leadership talk is a bubble.

Chuka Umunna Shares in Cable’s opposite number on the Labour front bench, Chuka Umunna, have also been trading high for most of 2012. Umunna is talked up as a potential leader of his party one day. He looks and sounds good on television; he has avoided being associated too strongly with any wing of the party. But his rapid elevation through the ranks and high profile have made him a figure of envy and irritation on his own side. Questions are also starting to be asked about the rigour and depth of his economic analysis. As shadow business secretary he should be the face of Miliband’s quest for more responsible capitalism, which means leading an economic operation of sufficient gravitas to rival the more reactionary story coming out of the shadow chancellor’s office. Is Umunna heavyweight enough to counter-balance Ed Balls? Doubtful.

Andrew Mitchell On the Tory side there has been a sudden rally in Andrew Mitchell’s stock, following revelations that cast doubt on the police version of events in the “plebgate” story that finished his career as International Development Secretary. Westminster has been piling into Mitchells on the assumption that he can now return to front line politics. I’m not so sure. He didn’t resign exclusively because of what he was alleged to have said but because so few Tories felt like defending him and plenty were gleefully putting the boot in. The angry temperament that got him into trouble in the first place has plainly left a long trail of resentment that will not be forgotten quickly. This is not a man who can easily slot back into government where he left off. His current rehabilitation is a dead-cat bounce.

Iain Duncan-Smith The Work and Pensions Secretary is feted as a pioneer of “compassionate” Conservatism. Few question his moral determination to make welfare reform a mechanism to rehabilitate poor communities by helping those on benefits back into work. Sadly, that ambition is being undone by cuts inflicted by the Chancellor and by general lack of competence at every level in DWP. 2013 is the year flagship welfare reforms run aground.

Then of course there’s the alternative investment market. George Galloway’s price surely peaked in Bradford in 2012. His ambition is plainly to use Respect as the vehicle for a hard left personality cult built around him. His personality isn't attractive enough to make that work at a national level. On the right, Ukip will continue to make angry mischief up until at least 2014 elections to the European parliament. It could be worth dabbling in Farages now, but switch to safer Tory stocks before the general election.

General warning: the New Statesman is not responsible for views formed on the basis of this advice. Remember, politicians’ reputations can even further down as well as just down.

Vince Cable: "the Business Secretary is seriously over-priced". Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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A third runway at Heathrow will disproportionately benefit the super rich

The mean income of leisure passengers at Heathrow in 2014 was £61,000.

The story goes that expanding Heathrow is a clear-cut policy decision, essential for international trade, jobs and growth. The disruption for those that live around the airport can be mitigated, but ultimately must be suffered for the greater good.

But almost every part of this story is misleading or false. Far from guaranteeing post-Brexit prosperity, a new runway will primarily benefit wealthy frequent flyers taking multiple holidays every year, with local residents and taxpayers picking up the tab.

Expanding Heathrow is not about boosting international trade. The UK is only marginally reliant on air freight to trade with the rest of the world. Total air freight traffic in the UK is actually lower now than it was in 1995, and most UK trade is with Europe, of which only 0.1 per cent goes by air. Internationally, as much as 90 per cent of trade in goods goes by ship because transporting by plane is far too expensive. And in any case our most successful exports are in services, which don’t require transportation. So the idea that UK plc simply cannot trade without an expansion at Heathrow is a gross exaggeration.

Any talk of wider economic benefits is also highly dubious. The Department for Transport’s forecasts show that the great majority of growth in flights will come from leisure passengers. Our tourism deficit is already gaping, with more money pouring out of the country from holidaymakers than comes in from foreign tourists. What’s worse is that this deficit worsens regional disparities since money gets sucked out of all parts of the country but foreign tourists mostly pour money back into London. As for jobs, government estimates suggest that investing in rail would create more employment.

As for the public purse, the aviation sector is undeniably bad for our Treasury. Flights are currently exempt from VAT and fuel duty – a tax subsidy worth as much as £10bn. If these exemptions were removed each return flight would be about £100 more expensive. This is a wasteful and regressive situation that not only forfeits badly needed public funds but also stimulates the demand for flights even further. Heathrow expansion itself will directly lead to significant new public sector costs, including the cost of upgrading Heathrow’s connecting infrastructure, increased pressure on the NHS from pollution-related disease, and the time and money that will have to be ploughed into a decade of legal battles.

So you have to wonder: where is this greater public good that local residents are asked to make such a sacrifice for?

And we must not forget the other sacrifice we’re making: commitment to our fair share of global climate change mitigation. Building more runways creates more flights, just as building more roads has been found to increase traffic. With no clean alternatives to flying, the only way to meet our climate targets is to do less of it.

The real reason for expanding Heathrow is to cater for the huge expected increase in leisure flying, which will come from a small and relatively rich part of the population. At present it’s estimated that 70 per cent of flights are taken by 15 per cent of the population; and 57 per cent of us took no flights abroad at all in 2013. The mean income of leisure passengers at Heathrow in 2014 was £61,000, which is nearly three times the UK median income.

This is in stark contrast to the communities that live directly around airports that are constantly subjected to dirty air and noise pollution. In the case of London City Airport, Newham – already one of London’s most deprived boroughs – suffers air and noise pollution in return for few local jobs, while its benefits are felt almost entirely by wealthy business travellers.

Something needs to change. At the New Economics Foundation we’re arguing for a frequent flyer levy that would give each person one tax-free return flight every year. After that it would introduce a charge that gets bigger with each extra flight, cracking down on those that use their wealth to abuse the system by taking many flights every year. This is based on a simple principle: those who fly more should pay more.

A frequent flyer levy would open up the benefits of air travel, reducing costs for those struggling to afford one family holiday a year, while allowing us to meet our climate targets and eliminate the need for any new runways. It would also generate millions for the public purse in an efficient and progressive way.

We have to take back control over an airports system that is riding roughshod over communities and our environment, with little perceivable benefit except for a small group of frequent flyers.

Stephen Devlin is a senior economist at the New Economics Foundation.