How Labour is preparing for a coalition with the Lib Dems

Shadow ministers have been encouraged to look for "points of agreement" with the party and to consider constitutional reforms that would appeal.

To win a majority at the next election, both Labour and the Conservatives will need to defy recent history. No governing party has increased its share of the vote since 1974; no opposition has achieved an overall victory at the first attempt for more than 80 years. Faced with these odds, it is unsurprising that many on both sides consider another hung parliament the likeliest outcome in 2015. 

Earlier this week, the Telegraph reported that David Cameron is preparing for a second coalition with the Lib Dems by discussing new rules to allow Tory MPs to vote on a new power-sharing agreement. Impressed by the discipline of Nick Clegg’s backbenchers compared with that of his truculent troops, Cameron wants his party’s hands "dipped in blood".

But what of Labour? In my politics column in this week's NS, I reveal that the party is making its own preparations for another hung parliament. One shadow minister recently told me that he had been encouraged to look for "points of agreement" with the Lib Dems and to consider constitutional reforms that would appeal to the party, citing the example of proportional representation for local elections. One of the concessions made by Labour when it entered coalition with the Lib Dems in Scotland in 1999 was the introduction of the Single Transferable Vote for local council elections and many Lib Dem activists now believe the party should have pushed for similar reform for England during the coalition negotiations in 2010. 

Labour MPs have also been struck by the increasing degree of policy overlap between the two sides and improved personal relations. In recent months, Labour has called for the introduction of a mansion tax on property values above £2m, a 2030 decarbonisation target for electricity, the removal of Winter Fuel Payments from the wealthiest 5 per cent of pensioners and higher capital investment (in preference to a temporary VAT cut) funded by a rise in borrowing. Earlier this week, it committed to a reduction in the voting age to 16. What all of these policies have in common is that they have all either been proposed or championed by the Lib Dems. This is far from the only motive for their adoption but Miliband and Balls are too astute not to know that this shift will greatly enhance their chances of striking a deal with the third party in 2015. One of the most popular reads among Labour MPs this summer is Andrew Adonis's 5 Days in May in which the Labour peer and former transport secretary laments the party's failure to prepare for the 2010 hung parliament and urges it to not to repeat this error. His advice has not been ignored. 

In response to the voting age pledge, Lib Dem MP Stephen Williams remarked: "If we can bank that as an agreement then if the next parliament does result in an inconclusive election, which I think is quite likely, the more issues that we know in advance that we're likely to agree on will make the negotiations swifter." His parliamentary colleagues are saying much the same thing. If the Tories want the Lib Dems to gift them the majority they will surely fall short of in 2015 (the party needs a seven point lead over Labour on a uniform swing), they should start to think just what baubles they could offer Cable and co. 

Nick Clegg and Ed Miliband attend a ceremony at Buckingham Palace to mark the Duke of Edinburgh's 90th birthday on June 30, 2011 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry experts imply that job creation in the UK could reflect that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed that only one in seven of the jobs projected in an industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial construction burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that natural gas is an essential part of the UK’s future “energy mix”, which, if produced domestically through fracking, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservatives support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This sentiment was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision and described fracking as a “fantastic opportunity”.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because they will either run out or force us to exceed international emissions treaties: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.