Both Umunna and Cameron discussed "consensus". Photos: Getty
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Chuka Umunna and David Cameron's consensus on what business rifts mean for Labour

Both the shadow business secretary and Prime Minister suggest how harmful business rifts could be for Ed Miliband.

Watching the British Chambers of Commerce (BCC) conference today, the link between David Cameron and Chuka Umunna's speeches to business leaders was striking. Both made points about political consensus on business policy, and it appears they have both concluded what party political business rifts mean: bad news for Labour.

The Prime Minister made a crafty political point when he compared Ed Miliband's attitude to enterprise with those of his predecessors:

I want to say something very frank. I’ve sat in parliament from 2001 to 2015. For the first nine years of that, I had opposite me on those green benches Tony Blair and Gordon Brown . . . and whatever else we disagreed on, we agreed that business is the generator of growth. That long-held consensus in British politics is now over.

His aim was clear: capitalise on the New Labour figures, like Peter Mandelson, who are making unwelcome interventions concerning Miliband's relationship with business, and suggest to the country that there is now only one party on the side of business.

Chuka Umunna also referred to "consensus":

Maybe it's controversial to say this in Westminster – there is a lot more consensus around business policy than [you're] led to believe.

The emphasis of the shadow business secretary's comment, made during a Q+A following his speech, was that the gulf between Labour and Tory approaches to British business is nowhere near as great as suggested by the press and Labour's detractors.

Both seem to subscribe to a consensus on one thing: Labour being perceived as too distant from the Tories, or the previous government, on business could harm the party electorally.

Update 17.14

A source close to Umunna tells me: "The context of Chuka's remarks on consensus was Cameron's overly party political tone. By turning up and making such a party political speech today, and by using Tory donors to attack Labour, he is undermining what business leaders want – political parties working together where they agree, and not simply abolishing what previous governments have done."

Indeed, Umunna mentioned in his speech his "motto" for if he becomes Business Secretary in the next governement: "Continuity wherever possible; change only where necessary." This approach will appeal to a business community exasperated by party politics and the electoral cycle hindering its stability.

Anoosh Chakelian is deputy web editor at 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.