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Middle East crisis shows why “security” and “resilience” are the new economic buzzwords

What this week’s by-elections, and the Gaza crisis, mean for the new economy.

By Jonny Ball

It’s been a grim week, with the horrendous news out of Israel and Gaza dominating headlines. At the time of writing, the conflict has caused untold damage within Israel and the occupied territories but is still relatively contained. Yet energy markets have already priced in the risk of escalation and a direct confrontation with Iran, with the cost of a barrel of crude oil jumping in recent days. Some have even suggested that China could use the opportunity of thinly stretched Western diplomatic focus – on the war in Ukraine as well as the Middle East – to blockade or invade Taiwan, in which case all bets are off (and a Third World War is potentially on).

Just as the 1973 Yom Kippur war led to sky-high oil prices that fed into the inflationary spiral of the 1970s, and just as Russia’s invasion of Ukraine precipitated our contemporary energy crisis, this month’s events demonstrate the necessity of turning those new economic buzzwords – security, resilience – into reality.

Reliance on energy imports from despotic regimes or regions riven by conflict is no longer sustainable. The green transition isn’t just about net-zero imperatives, but ensuring the country can withstand global shocks without punishing cost-of-living crises.

Coupled with all of this is the desire of many Western economies to “reshore” and “friend-shore” their high-end manufacturing jobs and supply chains, particularly for goods in strategic net zero industries like renewables, batteries, semiconductors and electric vehicles. Stand-offs between Great Powers aren’t good for trade. Hand-in-hand with the new vogue for active, interventionist government is a desire to insulate national economies from the fallout of challenging global events, reducing our carbon footprint and staving off global heating above 1.5°C in the process. Even the centre-right think tank Onward has a new report citing support for a strategic, muscular state, driven by these missions, as the “future of Conservatism”.

[See also: Danger still lies ahead for Labour]

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Prescient parochialism

Against this dangerous, depressing backdrop, two by-elections in separate Tory shires may seem parochial. But the results last night (19 October) do have implications for the way the UK approaches the new era of geopolitical, economic and climate volatility.

Labour secured two massive victories in Mid Bedfordshire and Tamworth, the former seats of Nadine Dorries and Chris Pincher. In Tamworth, Labour ate away at a gigantic Conservative majority, with 43 percentage points between the two parties at the last general election. In former true blue Mid Bedfordshire, you have to go back to the year of the Wall Street Crash before you see a non-Tory victory. Labour’s winning candidate there, Alistair Strathern, who has held a climate change role at the Bank of England, was attacked by his rivals when pictures emerged of him appearing dressed as a zombie at a Greenpeace demonstration. But it doesn’t seem to have done him any harm. One suspects he will be a key environmental advocate in parliament, and certainly one to watch.

King of the Psephologists Professor John Curtice was on hand to tell BBC News viewers that “no government has hitherto lost a seat as safe as Tamworth to the principal opposition party in a by-election”. This was yet another signal that Labour is on course to win a big majority at the next election.

Sizeable enough, even, for Keir Starmer to start dreaming of having enough leeway to push significant planning reforms through the Commons. Any route to a large Labour majority runs precisely through constituencies like Tamworth and Mid Bedfordshire that will be home to strong opposition to hundreds of miles of pylons and cables connecting new renewable energy projects to the grid through leafy, green fields. The failed Conservative by-election candidate in the latter constituency even attempted to turn the issue to his advantage in the campaign, launching a petition to protect the area’s green belt.

At Labour’s conference almost a fortnight ago, we learnt in numerous fringe events and from the conference podium that planning reforms are the sine qua non of unlocking the essential upgrades in grid and energy infrastructure that will, theoretically, power us to net zero. When it comes to “getting Britain building” Starmer said he’d “get tough” with nimby Labour MPs (and there will be plenty) who side with local opposition to housing and infrastructure developments.

But what the by-elections confirm is that it will almost certainly be the Labour Party that the British public chooses to steer the ship of state in this increasingly unpredictable era. Onward may be calling for a renewed One Nation Toryism to face the geopolitical and security challenges of the age, but they’re unlikely to get it from the achingly orthodox Rishi Sunak or Jeremy Hunt. The Prime Minister and Chancellor’s adherence to a tired, outmoded policy agenda sets them dangerously against the spirit of the times, leaving Britain rudderless in an uncertain world.

This article was originally published as part of Spotlight’s weekly Green Transition newsletter. Subscribe here.

[See also: “Security”: The inside story of Labour’s new buzzword]

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