Labour divisions over EU emerge as MPs launch pro-referendum group

Labour for a Referendum, which has the support of 15 MPs, aims to force Miliband to commit to holding an in/out EU referendum after the next election.

In recent weeks, Ed Miliband has had much fun mocking the Tories' divisions over Europe, but his party now faces some of its own. A new group - Labour for a Referendum - will be launched today with the aim of forcing Miliband to commit to holding an in/out vote on EU membership after the next election. The organisation has the support of 15 Labour MPs, including Keith Vaz (a former Europe minister) and former Northern Ireland spokesman Jim Dowd, three Labour council leaders and more than 50 councillors. It is directed by Labour activist Dominic Moffitt and chaired by John Mills, the founder and chairman of JML and a party donor. 

Vaz said:

I believe that it is the democratic right of the people to make that decision for themselves. I support Labour for a Referendum’s call for the party to support a referendum in our next manifesto.

Dowd said: 

I have been a supporter of this cause for many years and firmly believe the Labour Party must commit to a referendum before the European elections  next year. As the Tories tear themselves apart over this issue, Labour for a Referendum provides the opportunity to unite the party on giving the people a say on our future in the EU.

Its parliamentary supporters are a mixture of the Labour left, who regard the EU as a capitalist club, and the Labour right, who lament its erosion of national sovereignty. Here's the full list: Ronnie Campbell, Rosie Cooper, John Cryer, Ian Davidson, Jim Dowd, Natascha Engel, Frank Field, Roger Godsiff, Kate Hoey, Kelvin Hopkins, John McDonnell, Austin Mitchell, Grahame Morris, Graham Stringer, Keith Vaz.

Three of these MPs, Cryer, Hoey and Hopkins, have also offered their support for the Tory amendment "regretting" the absence of an EU referendum bill from the Queen's Speech.

After Miliband used his speech at the weekend to Progress to reaffirm his opposition to an EU referendum pledge (at least for now), the group warns that Labour "must not let the Conservatives and Liberal Democrats steal a march on this issue and potentially prevent Ed Miliband standing on the steps of Number 10 in 2015." While most in Labour rightly recognise that the EU is not a priority for voters (just 1 per cent name it as "the most important issue" facing Britain and just 7 per cent name it as one of "the most important issues"), some shadow cabinet ministers are concerned that the party could suffer if Miliband is seen to be denying the people a say.

With this in mind, the group highlights past quotes from Ed Balls and Jon Cruddas suggesting that Labour should consider pledging to hold a referendum if elected. Balls said in February: "As long as we don’t allow ourselves to be caricatured as an anti-referendum party, which we’re not – we’ve absolutely not ruled out a referendum...if we allow ourselves either to be the ‘status quo party’ on Europe, or the ‘anti-referendum party’ on Europe, then we’ve got a problem...I think we would be pretty stupid to allow ourselves to get into either of those positions", while Cruddas, speaking before his appointment as the head of Labour's policy review, said in October 2011: "This is about democracy. This is about respecting the people. Successive generations have not had a say on the European debate. This will fester until a proper open discussion is allowed. If we do not have a real referendum then anger and resentment will grow. We have to be bold and let the people into this conversation."

While Miliband has (rightly, in my view) refused to match Cameron's offer of an in/out referendum, it's worth noting that he has said that Labour would not repeal the coalition's EU "referendum lock" under which a public vote is triggered whenever there is a transfer of powers to Brussels. But today's launch will increase the pressure on him to signal that the promise of a referendum on EU membership is at least under consideration for inclusion in the party's manifesto.

It's worth remembering, of course, that it was once Labour, not the Conservatives, that was most divided over Europe. The 1975 referendum on EEC membership was called by Harold Wilson after his cabinet proved unable to agree a joint position (Wilson subsequently suspended collective ministerial responsibility and allowed ministers to campaign for either side, an option that David Cameron may well be forced to consider) and Michael Foot's support for withdrawal was one of the main causes of the SDP split in 1981. Today's launch is a reminder that those divisions have not entirely been consigned to history. While the Tories are now split between 'inners' and 'outers', in Labour the fundamental europhile-eurosceptic divide persists. 

Labour for a Referendum warns that the party "must not let the Conservatives and Liberal Democrats steal a march on this issue". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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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.