Could Nick Clegg be the price for a Lib/Lab coalition? Photo: Getty
Show Hide image

Could Nick Clegg be the price for a Lib Dem coalition with Labour?

Would the Lib Dems manage to keep Nick Clegg as leader during coalition negotiations with Labour?

There’s an adage in business that a principle isn’t a principle until it costs you money. The political equivalent is red lines – and a red line isn’t a red line, until it costs you government.

When it comes to the possibility of coalition negotiations after the election, the Lib Dems have several red lines but these are being kept firmly under the proverbial hat (ostensibly to strengthen our hand in discussions, although it does also suggest that some of those red lines may have a certain pinkish hue about them). There seems to be just one publicly stated red line, other than the party's mental health care promises unveiled at their conference last year, a no-go area that’s not for discussion or open for debate – the leadership of the party. Or as David Laws put it last Friday on Radio 4’s PM programme:

We’re willing to negotiate if we end up in hung parliament scenarios on policy substance but it’s not for somebody else to dictate to us who our leader is.

Which is admirable. But a bit of a problem. Because it’s not a principle the party was willing to extend to its political opponents. Here’s Laws again, describing events on 10 May 2010 in the midst of the last coalition negotiations in his book, 22 Days in May:

The messages seemed finally to be getting through, because at our Cowley Street HQ, a morning phone call between Peter Mandelson and Danny Alexander finally confirmed agreement by Labour to the Lib Dem requirement for Gordon Brown to announce his resignation if serious Lib-Lab discussions were to start.

Now – of course it’s admirable that the party would be willing to forgo government rather than allow decisions about its leadership to be dictated by a political opponent. But Labour hasn’t forgotten that 2010 ultimatum (and probably feel it rather let itself down by acquiescing back then anyway) – and that suddenly explains quite a lot of their recent actions.

For example, why they devoted a party political broadcast during last year's European elections attempting to belittle a domestic political opponent. Why they are ploughing huge resources into winning a seat that doesn’t figure in their top 106 targets when they supposedly pursuing a "core votes" (or 35 per cent) strategy. And why, when asked, Ed Miliband said he’d be willing to come and campaign personally against Nick Clegg in Sheffield Hallam.

Should Labour end up as the largest party but needing Lib Dem votes to form a majority government, it will create an interesting dilemma for both parties. Labour refusing to form a government in which Nick Clegg features – and the Westminster Lib Dems refusing to join a Labour coalition if a requirement is changing their leader.

And imagine how the huge swathe of Lib Dem activists who favour a deal with Labour over the Tories will feel if they know the reason this won’t get delivered is the presence of Nick. Especially if this results in doing a deal once again with the Tories.

Those 2010 late night phone calls to Tony Blair and Peter Mandelson to get Brown to resign make the three days of coalition negotiations sound like an episode of House of Cards. Back then it seems Labour were willing to sacrifice their leader in order to find a way of clinging on to office. In 2015, the calls are more likely to be going the other way, senior Labour figures making late night calls to the great and the good in the party to persuade Nick to stand down "for the good of the country". I imagine Gordon Brown has got his speech mapped out already.

And then we’ll see just how thick that red line is likely to be.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

Getty
Show Hide image

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.