Why Miliband would be foolish to match the Tory EU referendum pledge

Such a clear U-turn would cement a corrosive narrative that could prove far more damaging to his prospects of becoming Prime Minister – that of weakness.

Those of a nostalgic bent might find the enduring ability of 'Europe' to cause such disruption in British politics somewhat reassuring. After all, it has been a reliably consistent source of crisis for both Labour and the Conservative Party for nearly 40 years. Labour’s European troubles are often forgotten but the party was at least as exercised over Europe in the 70s and early 80s as the Conservative Party has been since the 90s. Indeed, the last referendum on Britain’s EU membership nearly split the Labour Party in 1975, while the party eventually did split, in large part over Europe, in 1981.

Now it seems Labour’s turn to be the party engaging in undignified convulsions over Europe has come round again. The Conservatives probably can’t believe their luck.

Incredibly, given the inordinate amount of time spent addressing the issue by all parties, Europe has never registered as more than a blip on the most important concerns of British voters. Even now, at a time when Europe is rarely out of the news and politicians and journalists alike fixate on the future of the UK’s EU membership, just 7% of voters mention it when asked to identify "important issues facing Britain today" (43% mention the economy; 38% immigration) and just 1% identify it as the "most" important.

Put simply, a pre-occupation with Europe is not a useful trait for winning elections (something to which former Conservative leader William Hague’s disastrous 'Save the Pound' campaign of the 2001 election attests).

And yet Labour bigwigs like Ed Balls and Jon Cruddas are convinced that neglecting to match or better David Cameron’s promise of an in/out EU referendum by 2017 could be an election-losing move.

In fact, the opposite is likely to be true. Such a clear U-turn, made in response to pressure from Miliband's (notional) subordinates, would cement a corrosive narrative that could prove far more damaging to his prospects of becoming Prime Minister – that of weakness.

Miliband has refused to match David Cameron’s pledge to hold a referendum in 2017 on the grounds that to do so now would create a long period of uncertainty over Britain’s membership which would be detrimental to British business. The party is committed to retaining the coalition's 'referendum lock', however, meaning that in the event of a further transfer of powers from the UK to the EU, a referendum would automatically be triggered.

This current position is a perfectly reasonable one. Deviating from it would play into the hands of the Conservatives and raise further questions about his competence as a leader. Beyond the leadership issue, there are two other reasons why it’s frankly a lousy idea:

1) It suits Labour to focus on the economy and public services and leave the European issue to the Conservatives. Matching the Tory pledge would cast the Conservatives as a party leading the way on Europe, rather than one that simply cannot help itself from obsessing over an issue that means relatively little to most of the public.

2) The electoral benefits of doing so would likely be negligible – Labour is a pro-European party; voters ready to change their vote based on the offer of an in/out referendum are likely to be voters who want to leave the EU and are thus probably beyond Labour’s reach regardless of its stance. 

There has been some discussion in Labour ranks of calling for a referendum before the next election. Those in favour argue that it would throw the Tories into disarray, while remaining consistent with Labour’s position that a referendum with a long lead time would undermine investment in British business. Such a move would risk charges of rank opportunism but far more importantly would open the door to Labour’s worst-case scenario – a British exit from the EU. Add to that the fact that polls indicate most voters to be in favour of renegotiation, rather than an immediate referendum and it begins to look like a less than astute move.

Ed Miliband should be wary of those who would put so much public pressure on a leader to reverse a position he is known to hold on principle, particularly when, as now, he is vulnerable to charges of weakness and indecision. Calling for a referendum at the Labour conference in September, as some are suggesting, would not look bold in this context, it would look spineless – quite possibly a 'quiet man turning up the volume' moment…

Ed Miliband attends a Q&A session at the Eric Liddle centre on 23 August, 2013 in Edinburgh, Scotland. Photograph: Getty Images.

Richard Mylles is a political analyst at Absolute Strategy Research, an independent consultancy based in London.

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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.