Is Labour right in seeking to take action against energy companies?
“IS LABOUR RIGHT IN SEEKING TO ‘TAKE ACTION’ AGAINST ENERGY COMPANIES?”
Professor Wyn Grant, Politics & International Studies; Professor Michael Waterson, Department of Economics
Following Ed Miliband's comments that Labour would "take action" against energy companies if they defied his promised freeze on energy bills, we asked Professors Wyn Grant and Michael Waterson if Ed was right to make such comments - both politically and economically.
Professor Wyn Grant, Politics and International Studies
Whether Ed Miliband’s proposed energy price freeze is good policy is a question for those who understand the energy markets. Monica Giuletti, Associate Professor of Global Energy at Warwick Business School, spoke to The Conversation and her contribution suggests that it may have unintended and perverse consequences. What I want to focus on is whether it is good politics in the sense that it increases Labour’s chances of winning an overall majority at the next election.
Electoral analysis traditionally places voters on a left-right spectrum in terms of more government/less government, more spending and higher taxes/less spending and lower taxes. There are other dimensions that also influence voting decisions, but this one remains significant. Ed Miliband apparently believes that voters have shifted to the left as a result of the global financial crisis, although so far parties of the populist right have been the main beneficiaries of the crisis across Europe, which is what one would expect in a recession. Miliband may also believe that it may be possible to shift voters to the left, in the way that Margaret Thatcher attempted to shift them to the right.
Miliband is evidently following a core vote strategy which the energy prices freeze would help. There is a rationale for this, as given that Labour constituencies tend to have fewer voters, and Conservatives tend to pile up big majorities in safe seats, Labour could win just 35-37 per cent of the vote and obtain an overall majority. Indeed, it’s quite possible that the Conservatives may win more votes and fewer seats than Labour because changes to constituency boundaries were blocked by the Liberal Democrats. Labour has already picked up left-leaning Liberal Democrat voters and hopes to do well among new voters, although the evidence of support there is mixed.
It may be a winning strategy but it is also high risk and may not produce a convincing mandate.
Professor Michael Waterson, Department of Economics
Case Studies in European Competition Policy by B.Lyons (ed). Cambridge University Press, 2009.
Contains the chapter 'Beer: the ties that bind' by Professor Michael Waterson. Working paper available to download for free.
The Consequences of the Global Financial Crisis: The Rhetoric of Reform and Regulation by Wyn Grant and Graham K. Wilson (eds).
Freeze That Bill campaign. Labour Party (UK)