Labour will listen and learn but Eastleigh was a disaster for David Cameron

It will terrify Cameron that even after making so many concessions to the right, the Tories were still beaten by UKIP.

No one who saw the scrum of photographers surrounding the Tories' defeated Eastleigh candidate Maria Hutchings, could have been in any doubt about how significant a catastrophe Thursday's by-election defeat was for David Cameron. In assessing the significance and cause of the Conservatives' demise it's worth reminding ourselves of the lessons that emerge from this election and what it means for One Nation Labour.

The Eastleigh by-election was a tough fight for the dedicated Labour activists who worked so hard over the past three weeks for John O'Farrell. Any by-election in which you start in third is a tough ask, particularly when it's your 258th target seat. This was a very different seat from Corby, where we captured a key marginal from the Conservatives. John O'Farrell fought the odds in an excellent campaign and his result bears comparison with by-elections past. I want to thank everybody who made the trip to deepest Hampshire to help him. It says much about the enthusiasm for John's candidacy and Ed Miliband's One Nation message that people came from across Britain (and particularly the south east) to support the campaign.

The real story of yesterday's result, however, is the failure of David Cameron's Conservatives. The conditions could not have been more favourable for them to beat the Lib Dems - this was their 16th most winnable Liberal Democrat seat. The by-election was triggered by Chris Huhne standing down in disgrace after pleading guilty to a criminal offence. Coming third behind the Liberal Democrats and UKIP was clearly a disaster for the Conservatives and their hopes at the next general election in 2015.

This by-election was a test of Cameron's judgement and on that count he failed. It will terrify him that, after making so many concessions to those on the right of his party by offering an EU referendum, a campaign focused on immigration and a candidate who - horribly exposed under the scrutiny of a by-election - wanted to leave the EU and opposed same sex marriage, he was still beaten into third place by UKIP. In the battle on the ground, the small band of Conservative foot soldiers appeared out of touch with voters on issues like living standards and fairness.

However, whilst our result stands favourable comparison with many by-elections of the past in seats where parties have started as long shots, this result shows that we need to redouble our efforts to reach out to every part of the country, including areas where Labour hasn't traditionally been strong.

Labour listened to voters on the doorstep, and we will learn from what they told us. All mainstream political parties need to take seriously the concerns people have about the country, whether it is the cost of living, fairness or immigration. Under Ed Miliband's leadership, Labour is determined to meet those concerns.

But we should be in no doubt - this was a disaster for David Cameron. If he can't win a seat like Eastleigh, the Tories will be very worried that he can't win the other seats they need at the next general election in 2015.

Toby Perkins MP was Labour’s campaign manager in Eastleigh

David Cameron leaves 10 Downing Street in London on 27 February, 2013. Photograph: Getty Images.

Toby Perkins is Labour MP for Chesterfield and shadow minister for small business

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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 our energy 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 windfarsm, 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 the statements 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.