Left and right agree: Ed Balls shouldn't fall on his sword

Anthony Seldon's New Statesman column provokes debate.

Anthony Seldon’s column in today’s New Statesman, calling for Ed Balls to resign, has provided plenty for the chattering classes to chew on.

Responding to Seldon’s piece, the Guardian's Jonathan Freedland defends Balls’s record and highlights his prescience in predicting a double-dip recession.

Balls is one of the very few people in politics able to utter those golden words: I told you so... Asking a politician to resign when they get things wrong is one thing. Demanding they quit when they get things right is a kind of madness.

Freedland also doubts whether the shadow chancellor stepping down would benefit Labour in the way the co-author of Brown at 10 envisages.

David Cameron turns a shade of puce every time he finds himself facing Balls. Why is it the Tories hate him so? In politics, such loathing is a compliment. It suggests Balls is one of the few Labour figures they fear. The same goes for the right-leaning commentariat's regular demand that Balls go, a chorus Seldon has now joined.

And he warns that, rather than ending factionalism in the Labour Party, Balls's departure would reignite it: "there will be a sizable group that believes it lacks a voice. Resentments will grow. Call it a team of rivals, pissing out of the tent or keeping your enemies closer – the idea is the same. It's best for Ed M to have Ed B on board."

LabourList editor Mark Ferguson is similarly unconvinced, describing Seldon’s article as "a piece that is character assassination just about dressed up in the faux-niceties of "advice". Ferguson also defends Balls’s economic credentials, praising his August 2010 Bloomberg lecture as "written by someone who understands the global economy – which should be the first thing Labour is looking for in terms of potential Chancellors." Although Balls "needs to articulate how he’d make Ed Miliband’s vision of a radically different type of economy a reality", Ferguson says he has been vindicated "on the fundamental call of the day." And he implores his party to "stop pretending that there are an array of alternative to Balls as Shadow Chancellor".

This view was echoed by the tweet that it "would be madness to dump either of the Eds. Please don't. Please, please, please." But given that the author was ConservativeHome editor Tim Montgomerie, perhaps that isn’t the support Balls needs.

The story was also covered by Guido Fawkes, Guardian politics and ConservativeHome

Update: Elsewhere, Iain Dale says he was "incredulous" when he read Seldon's piece and describes Balls as a politician "respected and feared by the Conservatives".

Dale writes: "They [the Conservatives] try to pretend that he is their biggest asset. Some may really believe that, but for most it is pure bravado. He knows how to needle Tories, he knows which buttons to press to rile them and his attacks invariably hit home."

Shadow chancellor Ed Balls speaks on the second day of the annual Labour Party Conference in Manchester on October 1, 2012. Photograph: Getty Images.

Tim Wigmore is a contributing writer to the New Statesman and the author of Second XI: Cricket In Its Outposts.

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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.