Corbyn - Historical Relic or Visionary?

The accusation that Labour leadership contender Jeremy Corbyn is trying to “turn the clocks back” serves to obscure much more than it explains.  In fact, take any time to dig beneath the headlines and we find that Corbyn has not argued for a return to the policies of the 1980s at all.  He did not, it turns out, call for the nationalisation of the means of production, distribution and exchange.  Rather, he made the case that some "natural monopolies" such as the railways and the energy companies should be operated on a not-for-profit basis.  He did not even stipulate that these utilities should be taken into state ownership – a sensible position given the ease with which neoliberal governments have been able to sell off state assets.  Similarly, while the tabloid headlines screamed out that Corbyn wanted to reinstate Clause 4 of the Labour Party constitution, it turned out that he had called for a fundamental rethinking of Labour’s purpose which would arrive at a modern equivalent of Clause 4.

In fact, it is very difficult to make the case that Corbyn is attempting to recreate the politics of a bygone age.  However, this allegation can be made of his opponents.  The New Labour dinosaurs – Alistair Campbell, Alan Johnson, Peter Hain, etc. – all claim that the road to electoral victory lies in recreating the glory days of 1997 when an evangelical Blair (as yet untainted by war crimes and corruption) effectively out-Thatchered the Tory Thatcherites.   In case you haven’t noticed, that was eighteen years ago!

Nor is it just the Blairite wing of the Labour party that is trying to turn the clocks back.  Labour’s Tory opponents have an even bigger problem on their hands since the economics of neoliberalism failed so spectacularly in 2008.  Insofar as Osborne and Cameron have a long-term plan at all (and for the most part, the slogan is little more than a means of deflecting attention away from short-term failure) it is to recreate the politics of 1984 – a confident Tory party that had just secured a massive majority on the back of the Falklands war, freed to deregulate the banking and finance industry; sell off public housing on the cheap in order to pump up house prices; and sell off state run industries on the cheap in order to pump up the stock market.  Today, schemes like Help to Buy and the plan to force housing associations to sell off their housing stock; the sale of the remaining state assets; and using taxpayers’ money to keep the banks solvent, are each intended to revive the glory days of Thatcherism.

There is a major flaw in both the Tory and Blairite positions.  We – those of us who live and work outside the City of London – have been in a depression since 2008.  That depression is the result of the policies put in place in the early 1980s, and developed to their conclusion by Blair.  For more than thirty years, the wages of working and middle class people in the UK have been falling in real terms.  The Thatcherite solution to this was threefold:

1. Encourage female employment.  While this may have been a positive choice for some women who were able to move into relatively high-paid professional careers, for most women it meant low-paid/low-skilled work in the service sector in order to maintain their families’ standard of living 
2. Offshoring manufacturing served to keep the price of goods low, even as it undermined employment and living standards within the UK 
3. The explosion of credit after the “big bang” in 1986 gave working people the illusion of increasing wealth as the value of their homes grew faster than the real value of their wages.  So long as we could keep rolling over the debt, we could keep the economy growing.

All of this came to an end in 2008.  While much of the media has focused on the growing level of government debt, it was actually the limits of private borrowing that provided the underlying crisis.  Although most people (including most MPs) continue to believe that government creates money, in fact more than 95 percent of the money in circulation is borrowed into existence every time a bank makes a loan.  As a recent Bank of England paper explained:

“In the modern economy, most money takes the form of bank deposits.  But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans.  Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.” (my emphasis)

This was the dynamic and liberating policy that the Thatcher government unleashed in 1986, and that New Labour took to its logical conclusion between 1997 and 2008.  It worked in the 1980s because the UK economy was emerging from a series of crises and recessions in the 1970s and early 80s.  Businesses were seeking investment to grow, but the old system in which the Bank of England controlled the money supply left business starved of cash.  A similar situation prevailed in the housing sector – people’s mortgage applications were routinely turned down not because they had poor credit ratings, but solely because the banks had already loaned up to the limit set by the central bank.

By 1986, the Thatcher government had largely won the “state v market” argument.  With the deregulation of banking and finance (which was also pursued by Reagan in the USA, and quickly spread across the developed world) the money supply would be determined by the collective actions of bankers – who (probably correctly) were deemed to be wiser than civil servants.  Since banks were thought to be risk-averse, government assumed that they would not engage in reckless lending.  But by underwriting successful business, and by extending prudent levels of credit to consumers, they could play their part in generating economic growth.

By the time New Labour came along, there was no real opposition to this belief.  Rather than reining in the banking and finance industry, Blair removed much of the remaining regulation (mirroring the Clinton administration in the USA).  New Labour became “extremely relaxed” about people getting filthy rich – largely on the back of government contracts and Private Finance Initiative deals that were spectacularly poor value to taxpayers.

The problem was that, despite their celebrity status under Blair and Brown, bankers were not particularly wise.  In fact, after 1986, bankers behaved in more or less the way that bankers have always acted throughout history: 

• Initially conservative as a result of the recessions of the 1970s and early 80s, the bankers tended to lend only to the safest businesses and consumers 
• Since the majority of these tended to be successful and profitable, the bankers convinced themselves that they had some kind of Midas touch, and began lending to riskier ventures and less credit worthy consumers 
• As by now the economy was growing, even these riskier loans tended to be successful and profitable, so the bankers began to take even greater risks, fuelling asset and housing bubbles barely different from the Dutch tulip bulb bubble 
• By the early 2000s, what was in reality a global Ponzi scheme was reaching its limits.  People who should never have been considered credit worthy were being offered 125 percent loan to value mortgages with very low initial interest rates in the belief that rising prices would allow the debts to be repaid.  
• Then2008 happened!

There is one key reason why Osborne and Cameron cannot hope to recreate the conditions of 1986.  Put simply, the 2008 crash was the unforeseen consequence of the Big Bang “solution”.  Our current crisis does not concern the supply of credit (money), but rather the demand.  Private (i.e. company and household) debt is higher today than at any time in our history.  The credit card is maxed out.  Too many people and companies are struggling to service the debts they already have to allow for a new round of credit-fuelled economic growth.  Indeed, without quantitative easing and historically low interest rates the private sector debt bubble would implode, rendering most of the banking and financial sector insolvent.  Put simply, you cannot pump up a debt bubble that is already at bursting point.

If Osbourne and Cameron cannot hope to recreate the conditions of 1986, then any Blairite attempt to regenerate the glory days of the late 1990s are doubly doomed.  The whole New Labour project was based on the myth of what economists called “The GreatModeration” – that somehow globalisation had ended the cycle of boom and bust, and replaced it with a perpetually growing economy based around manageably low rates of inflation.  Governments would be able to afford things live exorbitant PFI deals if the economy kept growing.  Firms could increase workers’ wages in line with inflation.  Consumption could continue for ever.  But each of these has now turned into its opposite.  Government debt is much harder to pay off; companies have stopped investing; wages are falling; and consumers are reluctant to take out new loans.

Another way of looking at this picture is to understand that cyclical crises are an inherent component of capitalist economies.  Every 30-40 years, the economy is plunged into a crisis that is largely the result of the unforeseen consequences of the “solutions” to the previous crisis.  So, for example, the Keynesian state funding in the aftermath of the Second World War created both the boom of the 1950s and 60s, and the conditions for the recessions of the 1970s and early 80s.  Similarly, the privatisation and deregulation that generated the boom of the 1990s also created the conditions for the collapse since 2008.

This change in economic fortunes can also be seen in the radical political fracturing that occurs every 30-40 years too.  Reforms introduced in 1870 to manage industrialisation and the growth of the urban population had run their course by the turn of the twentieth century.  The fracture came in 1906 with the election of a Liberal government that introduced a series of (in their time) radical social reforms, including state pensions and labour exchanges.  They were also the last government to make serious changes to Britain’s unelected House of Lords.  Interestingly, following the First World War, it was the Tories who became the beneficiaries of the Liberal reforms – remaining in office for almost all of the 1920s and 30s, yet not attempting to reverse the reforms.

Something similar began to occur prior to the Second World War.  The depression of the 1930s persisted, particularly in the old industrial regions of the UK.  Many of the political movements that had arisen out of this discontent coalesced around the Labour Party which had entered government in 1940 as part of Churchill’s coalition, and which was swept into office in July 1945.  This government introduced far more radical policies than those of 1906, including the National Health Service, social security and pensions, public housing and nationalised utilities. Once again, it was not the party that introduced the reforms that became its inheritors.  After 1951, three successive Tory governments chose to embrace and build upon the Labour reforms.

The Wilson (Labour) and Heath (Tory) governments reaped the unforeseen consequences of the post-war settlement.  State funding had become inflationary; nationalised industries had become inefficient; and a series of external shocks (such as the OPEC oil embargos) plunged the UK economy into several – seemingly intractable – recessions.  Unusually, it was a Tory party (which had rejected traditional conservatism in favour of a neoliberal radicalism) that (after a failed attempt at austerity between 1979 and 1983) introduced the new politics of the private market.  However, as with previous reforming governments, it was the opposition that was to reap the benefits.  By 1996 it was a resurgent New Labour party – clothed in the vestments of Thatcherism – that was to embrace and build upon the Thatcher reforms; confining the Tories to opposition for 13 years.

So where are we now?  

Arguably we find ourselves in the same part of the economic/political cycle as the Tories of 1905 and 1939, and of Labour in 1979.  We have a government desperately trying to recreate the conditions of its earlier success by implementing the very policies that are now fuelling the crisis.  But we also have the opposition of 1970 and of 1929-31 – parties so wedded to the narrative of the past that they cannot break free.

Insofar as Corbyn (at least potentially) offers a winding back of the clock, it is to early 1945 – when a confident Labour Party felt able to pursue its own policies rather than respond to those of the opposition – or to 1975 when a confident Margaret Thatcher felt empowered to do away with the post war settlement in favour of the private market.  Corbyn could yet play a similar role, defining the new political narrative that will have to emerge out of the ashes of the Thatcher/Blair project.  But this will not be achieved by turning the clocks back – not to 1997 or to 1945 – but by developing the policies that the UK needs to get us out of the current economic and political stagnation.

Whatever your views on climate change, this is INSANE!

If you are someone who believes that climate change is some kind of liberal conspiracy, you will be delighted by the energy policies being pursued by Britain’s Tory government.  Not only have they decided to abolish the subsidies on wind and solar power (as well as tightening the planning laws to make it easier to object to these), but they are finally clearing the way for us to get on with the serious business of hydraulically fracturing large swathes of the British Isles.

Buy it on Amazon

Here is something we can probably agree on – renewable energy is not a replacement for fossil fuels.  Most obviously, our most efficient and easily scalable renewables – wind and solar – are replacements for coal and gas rather than oil.  That is, while they can help us to burn a little less fossilised carbon, they can do nothing to provide the liquid fuels that our complex global transportation system depends upon… and without which, millions of Britons would starve to death.

Let me go further still.  Renewables cannot realistically replace coal, gas and nuclear electricity generation either.  To give just one small example – earlier this year the world’s second largest offshore windfarm, Gwynt-y-Mor, located off the North Wales coast was brought online.  At a cost of £2bn and covering 31 square miles, Gwynt-y-Mor generates 576 megawatts of electricity.  This sounds impressive until you realise that this is about half of the energy generated at the Hinkley Point nuclear power station, and just a third of the energy generated by the coal fired Aberthaw power station; each of which take up less than one square mile.  Without covering perhaps two-thirds of the UK land mass in wind turbines and solar panels and building several new tidal barrages, hydroelectric plants and nuclear reactors, there is simply no way that renewable energy could replace fossil fuels.

“Great, so can we get on with the serious business of hydraulically fracturing the southeast of England now?”

Whoa!  Hold on just a moment.  While I agree that renewables cannot replace fossil fuels, this does not mean we can easily do without them.

You may not realise this, but North Sea oil and gas production peaked in 1999 and have been in permanent decline ever since.  

Source: International Energy Agency.  2014.  Energy Supply Security 2014 (Part 2: Chapter 4)

Source: International Energy Agency.  2014.  Energy Supply Security 2014 (Part 2: Chapter 4)

For fifteen years now, the UK has been a net importer of both oil and gas.  And as our own oil and gas production falls, we find ourselves becoming increasingly dependent upon imports from some of the most violent and unstable areas of the world to maintain our consumption.  Libya, Nigeria and the Middle East are volatile, and supplies of oil and gas might easily be disrupted.  And since we have decided not to be friends with Russia any more, we are unlikely to be able to call on their support in the event of an energy crunch.

Fortunately, for the time being the bulk of our imports come from our North Sea partner, Norway.  But this is not charity – Norway expects us to pay a market price for our imports.  So in the event of global prices rising, our energy gets more expensive.  This is a particular problem when we face increasing competition from fast developing countries like China and India, whose billions of people aspire to the same levels of car ownership, air conditioning and central heating that we take for granted in the UK.  These emerging countries may be less inclined to trade energy on the world market, and may well opt instead for bilateral agreements with oil exporting countries in order to remove some of the price volatility they would otherwise face.  Either way, there is going to be less to go around, so prices will have to rise.

Finally, we face a squeeze simply because those countries that are still exporting oil and gas have been diverting a growing proportion of their production into fuelling the growth of their own domestic economies.  If, for example, Qatar does get to host the 2022 football world cup, the industrial scale air conditioning units that will be essential to cooling the stadia will have to be powered by oil and gas that would otherwise have been exported onto the world market.

We can agree that without energy, nothing gets done.  We might also be able to agree that if there is not enough energy to go around, some economic activities will have to cease.  We already see this in the emergency plans operated by the National Grid where, faced with a lack of supply big industries such as steel works will be disconnected to prevent powercuts to households.

Were energy shortages to become a permanent problem, we would face higher prices, causing the least profitable economic activities (such as, for example, food production) to cease, as only those enterprises that can generate significant profits would be able to afford the higher prices.

“Surely this gives us an even greater incentive to frack as much of the UK as we can!”

Well, fracking could provide us with a bridge between our declining fossil carbon energy generation and a new economy based around renewables and nuclear, but it is a very short-term solution.

The first thing to note about fracking is that it is incredibly expensive in both monetary and energy terms.  Whereas conventional oil can return 20 barrels for every barrel (equivalent) of energy invested, the best case for fracking is that it provides just five – roughly the same return as we get from solar farms and significantly less than wind power or roof-top solar.

Another thing to note is that the US fracking bubble does not provide a blueprint that can be followed elsewhere.  The USA has enjoyed a combination of geological and economic factors that mean that their experience will prove to be unique.  First, and most obviously, the US shale deposits are vast.  So much so, that you could fit the entire land area of the UK inside just one (the Marcellus) shale area.   However, production within the US shale fields is not uniform.  The majority of the oil and gas recovered comes from a handful of “sweet spots”.  The further from these sweet spots you drill, the less profitable you become.  Second, much of the US shale drilling has occurred in sparsely populated regions in which public protest is significantly less (not least because landowners are directly compensated).  Finally, it was the combination of high oil and gas prices, low interest rates and billions of dollars of quantitative easing money looking for a decent return on investment that kick-started the US fracking industry.

A final point to note about US fracking is that wells deplete rapidly, losing an average of 80-90 percent of production in just three years.  This has meant that to increase total production, fracking companies have had to drill exponentially more wells.

Poland has twice the shale deposits as lie beneath the British Isles.  The Polish government is almost unique in being more pro-fracking than the UK government.  Nevertheless, when fracking industry researchers sought to estimate the total recoverable amounts of shale oil and gas beneath Poland, they concluded that it was insufficient to be profitable.  The UK experience may prove similar.  Consider south Wales – one of the UK regions containing shale gas deposits.  The geology of south Wales is horrible for anyone seeking to extract resources of any kind.  A large number of small fault lines cause mineral seams to rise and fall unexpectedly.  This is what caused the south Wales coal industry to be unprofitable.  It is likely that hydraulic fracturing will face similar problem since, while it is now technologically possible to drill horizontally, it is impossible to follow seams up and down across fault lines.

Economically, too, UK fracking may prove unappealing.  While interest rates remain low, all the indications are that they will start to rise in the near future.  Moreover, there are currently much higher returns to be made from investing in UK property – especially in London and the southeast.  UK investors may prove much more reticent about investing in an as yet unproven UK shale industry when there are greater returns to be made on buy-to-let property speculation.

I fear that fracking is simply not going to save the day.  Even if we are able to get some of the gas and oil out of the ground, it will never be sufficient to replace the declines in North Sea production.  We face declining energy supplies, and that means a declining economy.

"I think you've forgotten about these"

Please stop waving your smartphone at me.  I know that we are supposed to be living in a “knowledge economy”.  But in truth, this is more a fairy story that we tell the children so that they can sleep at night.  Consider, if you will, one of the world’s most polluted artificial lakes in Baotou in Inner Mongolia.  This is where all of the toxic waste produced in the manufacture of the Rare Earth Metals used in the manufacture of your mobile phone, your tablet, computer, router, and all of the other electrical items that you depend upon for your knowledge economy.  That is, the illusion of a western knowledge economy is built on the backs of workers in the developing world.  Consider also, that while your mobile phone uses a relatively tiny amount of electricity when you recharge it, if you watch just one hour of video per week, you use the same amount of electricity as if you were running two modern refrigerators.  The reason you do not see this is that in the so-called knowledge economy, energy consumption occurs out of sight at the datacentre.  Indeed, the global ITC infrastructure now consumes more than 10 percent of global energy – more than the energy consumption of Germany, and only less than the USA, China, Russia and Japan.

So what happens to your knowledge economy if there is not enough energy to power the data centres and the communication networks?  I guess we’ll just have to close some more hospitals, eh?

The insanity of the Tory government is not that they are determined to promote fracking – in this they are just grasping at the mirage of future cheap energy.  Nor is it that they continue to subsidise a nuclear industry that will never produce cheap (still less clean) energy.  The real insanity is that they are determinedly undermining renewables at a time when we face real energy shortages in the very near future.

Tim Watkins' book: Britain's Coming Energy Crisis is available in paperback and kindle versions.

The UK's next crisis?

What would happen if the electricity grid failed? 

Hardly anyone under 50 can remember the last time the UK had less energy than it needed.  Power cuts in the 1970s, were the result of the dispute between the miners and the Heath government.  And while disruptive, the introduction of the “three-day-week” gave a degree of stability, allowing businesses and households to plan ahead.   

Back then, Britain had a largely national economy (the UK had only just joined the EEC).  Governments could operate industrial strategies because the UK was still a major manufacturing nation.  It was also a more self-sufficient country, growing most of the food it needed.  Today things are very different.  The UK today is little more than a tax haven for global financiers, heavily dependent for most its lifestyle on imported food and goods from manufacturing bases around the world in a highly complex global economy.  For example, today, UK agriculture produces less than 60 percent of the food we need, and this makes the people who live in the UK highly vulnerable:

“Populations are far less resilient now than they once were…  There is likely to be a very rapid descent into public disorder unless Government can maintain [the] perception of security…  Any central Government response to the crisis may be too slow, arriving after the local emergency resources and critical utility contingency measures had already been consumed.”

This was the conclusion of a top secret government emergency preparedness exercise – Exercise Hopkinson – which examined the potential impact of a prolonged loss of electricity in Devon and Cornwall caused by damage to the Grid.  What the government planners discovered was that disruption in one critical infrastructure system would rapidly cascade into all other critical systems.  Without electricity, water and sewage could not be pumped.  Communications failed when batteries could not be recharged.  Hospitals could not run once emergency backup generators ran out of fuel.  Transport collapsed as electric fuel pumps stopped working.  Shops could only sell food for cash because electronic payments systems failed… and people could not obtain cash because the cashpoints weren’t working.  Refrigeration failed, preventing chilled and frozen food from being sold for health and safety reasons.  Most businesses were unable to operate, and many key workers chose to stay at home with their families rather than attempt to get to work… no wonder the government tried to bury all references to the exercise.

The cascading critical infrastructure collapse encountered in Exercise Hopkinson has been seen in the real world too.  On 14 August 2003 the entire northwest of the USA and neighbouring regions of Canada were taken out as a result of a power line sagging and making contact with a tree, causing a power surge that cause the shutdown of power stations across the region.  Fortunately, power could be restored in a matter of hours because the Grid infrastructure was intact.  Nevertheless, in this short space of time, a cascade had already begun.  The water and sewage system began to fail immediately.  Filling stations stopped working, leaving people stranded.  Air traffic control failed.  Businesses shut down.

This short-lived but highly disruptive incident gives us a much greater insight into what would happen to us if the UK national grid failed than any comparison with the 1970s.  In those days, we were much more resilient because we were much less dependent on electricity.

Another cascade occurred closer to home when, in September 2000, farmers and lorry drivers staged a week of protests triggered by sharp rises in fuel prices.  A series of rolling road blocks and blockades of oil refineries created a public panic.  This quickly stripped food from supermarket shelves and fuel from filling stations.  Although just 10 percent of the UK’s road deliveries failed, this proved sufficient to bring the country to the edge of collapse.

The fuel protests provided the first glimpse of a country with insufficient supplies of cheap liquid fuels.  This was a phenomenon that had not been experienced since the 1970s.  People back then saw an energy crisis of a different kind, as the OPEC countries limited the supply of oil to international markets.  Indeed, it was the spike in oil prices in the 1970s that opened the way for profitable investment in North Sea oil.

North Sea oil gave Britain a temporary lease of life that allowed successive governments to pretend that it was some kind of great power on the world stage – as it had been a century before.  But it was a facade built solely on oil riches.  As former Welsh First Minister Rhodri Morgan recently observed:

“Back then [since 1983] whoever was running the Government had this amazing ability to spend oil revenues. Governments could afford things.  They didn’t have to worry about where the next few quid was coming from.  The Falklands War was eminently affordable.  Paying the cost of the rocketing unemployment benefit bill, as dole queues doubled, then trebled, wasn’t a problem.”

The North Sea also proved to contain huge reservoirs of natural gas that promised to provide Britain with cheap electricity from a new generation of gas-fired power stations that would replace the aging nuclear and dirty coal-fired power stations.  This also gave the Thatcher government the means to break the mining unions’ stranglehold on the UK economy. 

Between 1979 and 2000, successive UK governments created an energy and transportation infrastructure based around North Sea oil and gas.  Despite warnings that these were finite resources, politicians of all stripes put personal ambition ahead of the long-term needs of the people, and failed to invest in a new, post-fossil fuel energy generation infrastructure.

Today, renewable energy makes up just 15 percent of the UK energy mix.  Of this, almost all is old hydroelectric generation together with the wood-burning Drax plant in Yorkshire.  Wind and solar power barely scratch the surface.  Indeed, the massive, £2bn Gwynt y Mor offshore windfarm located off the north Wales coast is the second largest offshore windfarm in the world, but delivers just a third of the power generated at the coal-fired Aberthaw power station in south Wales.

For the UK to replace even a sizeable fraction of its coal, gas and oil energy generation with renewables, governments from the 1980s would have needed to have diverted a proportion of North Sea oil revenues into renewables of all kinds.  They didn’t. 

Every year from 1979 on, oil and gas production from the North Sea grew.  Politicians simply assumed that the UK would continue on this trajectory for generations.  And while governments faced some criticism from environmentalists concerned about global warming, they could always deploy the hi-tech card – long before climate change gets out of hand, they told us, carbon capture and storage technology will have been developed, allowing us to burn fossil carbon to our hearts content.

So long as North Sea production continues to grow, governments can spend their time dealing with more immediate problems like the banking crisis and the stalled global economy.

So when might North Sea oil and gas production peak? 

You may be surprised to learn that it already has.  Both oil and gas production peaked in 1999 and has been falling rapidly ever since.  In 2012 the North Sea was producing just half of the gas two fifths of the oil that it had been producing in 2000.  This does not bode well for a country whose critical infrastructure was designed around access to a growing supply of cheap fossil carbon.  Giving evidence to a House of Lords energycommittee hearing, Professor Dieter Helm described the UK energy situation as a “very slow motion car crash”:

“… by 2015 or 2016, the capacity margin in this country will be very close to zero; in fact, I have done some numbers which suggests that it might be below zero. What is going to fill the gap in 2017, 2018, 2019 and 2020? We will be lucky if Hinkley is on the system by 2022 or 2023.  More nuclear power stations are coming off between now and then.  Most of the coal, through emissions control, thankfully, is being closed.  There are not enough wind farms and solar panels to fill that gap in a credible way … it is inescapable that gas is a transitionary fuel and can actually make a big impact quickly.”

The committee themselves acknowledged that:

“There is a growing risk of power cuts in the UK as the margin of electricity generating capacity over peak demand shrinks. It reflects a lack of clarity and consistency in energy policy over many years.”

The UK is becoming increasingly dependent upon imported oil and gas from some of the most unpredictable regions of the world – Russia, Libya, Nigeria and several Gulf States – any one of which may turn the taps off at any moment.  This dependency can only get worse as North Sea production continues to fall.

All of those energy threats that governments thought were problems for future generations are coming home to roost.  The lights are about to go out for the first time in 42 years, and nobody is sure what the consequences will be.

Britain's Coming Energy Crisis by Tim Watkins is available in paperback and Kindle e-book formats.

Austerity will kill the economy

The Household Analogy

The last government failed to fix the roof when the sun was shining.  This was the diagnosis offered by incoming Chancellor George Osborne in 2010.  Now, a new government would be forced to take hard decisions that would be all the more painful.  And, echoing his ideological mistress, Osborne trotted out TINA – There Is No Alternative.

Of course, Osborne was helped by the idiotic note left by outgoing New Labour Chief Secretary to the Treasury Liam Byrne, proclaiming that “I’m afraid there is no money”.  And the remnants of New Labour in opposition quickly signed up to the Tory narrative and the austerity policies visited on the British people by the new ConDem coalition government.

For public consumption, the political leaders built upon the comely image of the small town householder working hard to keep a roof above his head.  The economy as a whole was portrayed as a household just like yours and mine.  If you or I borrow too much money, then we face hard choices.  We must either take a second job to bring in some more money or we must cut back on our spending.  Government, we were told, is exactly the same: “you cannot pay yourself more than you earn”.

Because the New Labour government had racked up huge levels of debt between 2008 and 2010, the only options available, they told us, were those that most householders would recognise – earn more money (i.e. stimulate private sector growth in order to increase tax yields) and cut back on outgoings (i.e. cut public spending programmes).  According to the new government, fortuitously, cutting public spending would clear the way for the private sector to grow.  So this would not be a real hardship.  While some people might lose their public sector jobs, these would soon be replaced by private sector employment.  So, in the long-term, everyone would benefit.

In practice, the policy has been catastrophic.  High-paid, high-skilled jobs have been lost in favour of low-paid, low-skilled jobs that are often part-time or zero-hours.  Wages outside the top five percent have stagnated, while the incomes of the most vulnerable – the working poor, the sick and disabled, people with mental illness, together with women who look after disabled children or older relatives – have fallen dramatically.  Private sector growth has been anaemic at best; with employment maintained only at the expense of falling productivity – leaving UK companies unable to compete in international markets. 

Public services are being hit by the unforeseen consequences of cuts.  For example, despite promising to protect the National Health Service, the government has succeeded in creating a series of crises in Accident and Emergency departments as a direct result of the cuts they made to adult social care services, which have removed many of the community-based beds where hospital patients would normally be moved once they were well enough.

For the foreseeable future we can expect even more of the same because both the Tories and the Labour opposition are signed up to the “economy as a household” narrative that dictates austerity as the only road back to prosperity.  For the most part, the majority of the 650 members of parliament, adopting this model of the economy is no more than idiocy – they simply do not know any better, and have never bothered to think about the problem.  For a handful, however, it is a cynical manipulation designed to dupe the public into accepting an ideological attack on social security and public services.  Because, whatever else our increasingly globalized economy is, it most certainly is not a household.

Even within a household, we might observe that working more and spending less are not the only options open to us.  We might, for example, consolidate our debts.  A household may have access to a credit card deal offering zero percent interest on an existing balance.  We could use this to “park” our debt until such time as our circumstances have improved enough to begin paying it off.  Government does not need a credit card.  It is able to borrow at close to zero percent interest anyway.  So, there is actually nothing to stop government from borrowing new loans at zero percent interest in order to pay off debt that currently attracts higher rates of interest.

There is, though, a critically important way in which government is unlike any household you or I have lived in – governments have printing presses.  If you or I were to try to solve our difficulties by using a good colour photocopier to print out counterfeit £20 notes, we would end up in jail.  This is because since 1844 it has been illegal for anyone other than the central bank to print money in the UK.  So one thing the government could do that a household cannot do is to print new money as an alternative to borrowing it.

Okay, we have heard this line before.  Wasn’t it Labour Prime Minister James Callaghan back in 1979 who told us that we could no longer print money to spend our way out of recession?  In those days, printing new money appeared to cause higher inflation.  So – and this is a key reason why the mainstream parties are signed up to austerity – if government today printed more money, wouldn’t this simply result in high inflation that would, ultimately, be worse than the privations of austerity?

Although we experience inflation as increasing prices, it is actually a form of currency devaluation.  Just as the Roman Emperors devalued their currency by reducing the quantities of gold and silver in the coins, allowing them to mint more, so in the modern world, printing more money without a corresponding growth in the economy can have the same effect – more money chasing the same goods and services leads to price increases.  To this, there is an important feedback mechanism – velocity.  If we expect prices to increase tomorrow, we are more likely to purchase today.  So, as inflation takes hold, the velocity (or rate) at which we spend increases.  This has a result similar to printing new money called the “multiplier effect”.  Suppose I earn an extra pound.  I might decide to spend it on some flowers for my wife.  This means that the florist now has an extra pound.  So the florist decides that when she goes for out a meal that evening, she will add the pound to the tip she leaves for the waiter.  The extra pound allows the waiter to take a taxi home.  The extra taxi fare allows the taxi driver to buy a magazine.  And so on.  One extra pound is spent over and over, having the effect of growing the amount of money in circulation at any time.

Now, the first thing to say about inflation is it is not necessarily a bad thing.  If you are a saver, inflation is a bad thing because you need to secure an interest rate that is at least the same as the rate of inflation just to break even.  But in the wider economy, we are better off if savers are encouraged to take risks, as this is the only way of encouraging investment in new (and potentially risky) business ventures.  So, inflation can help move investors’ money from unproductive asset speculation into productive capital investment.  If, on the other hand, you are a borrower, then inflation works for you by cutting the real value of the money you borrow.  When people take out mortgages, it is usually the first five years or so that are the most difficult.  Having borrowed some multiple of their earnings, they are committed to making that payment every month.  However, over time, as inflation increases, their wages increase accordingly.  But the monthly payment remains the same.  Over time, the mortgage gets easier and easier to pay off.  At a global level, the same is true of government debt.  As inflation increases, so government finds it easier to pay it off.

In any case, we should be very cautious about making comparisons with the way the national economy operated in the 1970s and the way the global economy operates today.  In this booklet I will make the case that the changes we have witnessed in the past thirty-five years make the comparison entirely unhelpful.  These changes have been so profound as to render the currency of today totally different to the money we used in the 1970s.  Indeed, one of the key failings of modern politics is the failure to understand this transformation.

In this booklet I will argue that in seeking to avoid the ghosts of the 1970s, modern policy makers are creating an even bigger crisis by generating a dangerous deflation in which money is destroyed and spending grinds to a halt.  In the face of a massively over-extended banking sector, this process – which is fuelled by austerity economics – threatens to bring the whole economic system crashing to the ground.

You can read the rest of Tim Watkins' new book, Austerity here.

1992, 1983… or 1922?

In the fallout of Labour’s worst election defeat in a generation there is much speculation about which previous election defeat it most resembles.

Superficially, the pre-election idiocy of Miliband’s concrete block appeared to have a similar effect to Neil Kinnock’s triumphalist speech at the Sheffield Rally on the eve of the 1992 general election.   There were other parallels with 1992 as well.  Most notably, in the run up to that election the opinion polls were predicting a Labour win.  However, the exit poll taken on the day suggested that the result would be much tighter.  Initially, the pundits thought a minority Labour government would be the outcome.  However, as the night wore on and the results came in, a Tory minority government looked more likely.  And when the dust settled and the last votes were counted, we ended up with a Tory government with very narrow majority similar to today.

But these parallels are too superficial, and serve to obscure deeper seated problems for Labour.  Indeed, just five years on in 1997 Labour secured a spectacular majority – something that is highly unlikely to be repeated in 2020.  This has caused some commentators to wonder if Labour’s predicament today might be similar to that facing Michael Foot following the spectacular defeat in 1983.  Labour went into that election a divided force.  The left – championed by Tony Benn – were pulling in one direction while the old guard of the right – championed by the likes of Denis Healy – wanted to go the opposite way.  The manifesto that was finally cobbled together, and on which the hapless Foot went into the election came to be termed “the longest suicide note in history”.  It was so out of touch with popular opinion that it gave the Thatcher government (basking in their triumph over Argentina in the Falklands War) an even bigger majority than they had won in their landslide 1979 victory.  Indeed, it ushered in a further fourteen years of Tory government.

It is my view that neither of these examples fully reflects the crisis that the Labour Party currently faces.  It is not just that they seem unable to find a credible leader – Miliband was no worse than any other leadership pretender.  Nor is it just that Labour is a divided force with the so-called “Blairites” on one side and an old-left on the other – although there is also a truth to this.  Both the divide in the ranks and the inability to choose a credible leader are actually the symptoms of a much deeper existential crisis that can be summed up in the simple question, “what is Labour for?”

The fact that none of the Labour leadership contenders can offer a coherent narrative of the issues facing the country they claim to want to lead, still less a credible alternative to the Tory austerity programme, beyond a stream of buzz words such as “aspiration” and “hard-working families” illustrates the bankruptcy of a once great party.  The fact that the nearest they can get to a genuine political debate is an argument about whether they need to go back to 1997 or 1945 is evidence that they are now a spent force.  This, for me, suggests an entirely different election parallel – and, indeed a different party… 1922.

1922 marks the real beginning of an independent Labour Party as a force in British politics.  Indeed, just two years later the Labour Party formed its first (minority) government.  However, it is not this Labour Party’s fortunes that are a parallel for the Labour Party of today.  Rather, the parallel is with the Liberal Party of 1922.  For 1922 was the year that the Tories finally rebelled against the Liberal-Tory coalition that was first formed in 1915 to prosecute the First World War.  The result of the ensuing general election was a Tory victory and the end of the Liberal Party as a party of government (with the brief exception of some posts outside the war cabinet 1940-45) prior to its recent brief period as a junior coalition party.

To understand the parallels between Labour today and the Liberals then, we need to go back to their respective election victories in 1906 and 1997.  In both 1906 and 1997, the Tory Party was tired and internally divided – in 1906 over the Empire, in 1997 over Europe.  In the face of these failing Tory governments, opposition parties were swept into power on radical programmes.  Indeed, many Liberals in 1906 even referred to their party as “New Liberals” in the same way as Labour supporters referred to “New Labour” in 1997.

The 1906 Liberal Government was one of the most radical reforming administrations that Britain has ever seen – perhaps second only to the Labour Government of 1945-51.  It introduced a raft of social reforms including the first state pensions.  It also broke the power of the House of Lords, removing their ability to prevent the Commons from introducing legislation.  After 1911, the Lords would become a secondary chamber – revising, but ultimately having to pass government legislation.  It is easy to dismiss the New Labour government as being anything but radical given its decline throughout the 2000s.  However, it is worth remembering that New Labour introduced sweeping reforms.  They introduced the Human Rights Act.  They created the devolved governments in Scotland, Wales, London and Northern Ireland.  They introduced the minimum wage.  And they finally rid the House of Lords of its hereditary peers.

Then came WAR!  The Liberals effectively blundered their way into an Eastern European conflict that offered no benefit and many serious problems to an already over-stretched British Empire.  Although not allied to Russia and France – and thus unable to steer their policy – senior Liberals including Asquith and Churchill were only too happy to enter the war against Germany.  Others – most notably Lloyd George – needed some pretext on which to go to war.  New Labour’s war was a much more cynical and calculated affair that involved far more deceit than had the First World War.  The Iraq war was about the USA’s addiction to oil.  The aim, quite simply, was to install a pro-western regime that would continue to provide the USA with oil.  This was deceitfully dressed up as a war against a dictator who had been party to the attack on the World Trade Centre in September 2001, and who had developed weapons of mass destruction that could target London within 45 minutes.  At least the Lloyd-George Liberals of August 1914 could point to the reality of the German invasion of Belgium as a pretext for war.

The First World War split the Liberals just as the invasion of Iraq was to split Labour.  As Kenneth O. Morgan reflects:

“There was a big argument over conscription in the winter of 1915-1916. Here was a fundamental issue for Liberals. How wholeheartedly were they committed to fighting the war? The Home Secretary, a Liberal, John Simon, resigned. Asquith seemed dilatory, unable to make up his mind. Lloyd George was working with the Conservatives. In the end, military conscription was introduced for all males between 18 and 45 years of age but it was a hugely divisive factor within the Liberal Party. It embodied the key principle between, if you like, total war on the one hand and civil liberties on the other hand, rather the kind of argument we have had in Britain latterly which exercised us in the House of Lords about counter terrorism legislation. How do you strike the balance between security and freedom? And during this period, a group of Liberals drew up a list of perhaps a hundred backbencher Liberals who said if there was a crisis, a showdown, they would support Lloyd George as Prime Minister and not Asquith.”

One of the key reasons for the Labour defeat and the LibDem gains in 2010 were the large number of Labour voters who chose to vote LibDem in the belief that a Labour-LibDem coalition government would be less authoritarian and warmongering than a Labour majority government – although, as it turned out, such tactical voting in a First Past The Post system can have results diametrically opposite to those desired.  However, it is the post war years that should be most worrying for today’s Labour Party.  In 1915, the Liberals had been forced into coalition with the Tories.  And when the war ended, the coalition continued at the expense of Liberal Party unity.  Internally divided, the Liberals faced a challenge from the left from an emerging minority party… Labour. 

Similarly, today an internally divided Labour Party finds itself outflanked on the social democratic left by the Scottish National Party, the English Green Party and Plaid Cymru in Wales.  At the same time, it finds itself outflanked on the populist right by UKIP.  And while none of these smaller parties look set to form a government any time soon, as with Labour in relation to the Liberals in the 1920s, they can secure enough votes and seats to keep Labour out of office.

By 1922 it was far from clear what the Liberal Party was for.  This is not to take anything away from the reforms they brought about.  It is simply to state that they no longer spoke for any sizable constituency in the UK that was not more effectively represented elsewhere.  In 2015, Labour faces a similar problem.  It can still present itself as the party that introduced devolution, the minimum wage and the NHS.  But these are all fading into history.  And outweighing these historic relics is a party internally divided and unable to define its purpose, let alone appeal to any sizeable proportion of the electorate.

What Labour experienced in May 1915 was the end of the Blairite coalition of interests that secured electoral success in 1997.  Labour can no longer articulate the political interests of its core working class support without alienating a whole swathe of middle England.  On the other hand, where it has attempted to appeal to middle England it simply served to drive its core voters into the arms of the Greens, SNP, Plaid Cymru and UKIP.

Labour may well be reduced to obscurity within the next decade.  Nor is it inconceivable that they will be replaced by a social democratic alliance (Greens and Nationalists) on the left or a populist UKIP on the right as the second party in UK politics.  If they are to avoid this, Labour will need to do much more than elect a new leader or engage in internal navel-gazing.  Only by reaching out to the whole plethora of campaigning groups, trades unions, and single issue groups can Labour hope to weld together a new coalition of interests that can deliver a future Labour government.  

Of one thing we can be sure, if the next Labour leader serves up more of the same, then – like the Liberals before them – Labour will be a long way along the road to oblivion.

Labour’s inconvenient truth…

If I were going to hold a protest today, it would not be outside Downing Street, it would be outside Ed Miliband’s kitchen… Here’s why:

There is no other way of reading the results.  The fact is that the Labour party took a kicking from the electorate on May 7^th.  Seats that should have been a shoe-in for Labour fell easily to the Tories, aided by a collapse in the LibDem vote which mostly benefited the Tories.  Even the Tories seemed genuinely surprised by the results having, it is rumoured, already put out informal feelers to the LibDems about the possibility of another coalition.

It would be easy to heap all of the blame onto the shoulders of the hapless Nick Clegg, whose party was well and truly punished for their broken promises and role in the coalition.  But Clegg was put into an unenviable position five years ago when Gordon Brown refused even to talk to the LibDems, effectively ruling out any chance of a progressive coalition.  A fair voting system and the benefits of coalitions are at the core of LibDem political philosophy – they could hardly refuse to form one on ideological grounds.  More practically, had they not done so, Cameron would have formed a minority government, set out his programme, and would have then gone for an October election where he would most probably have secured the majority government in 2010 that he now has in 2015.

The Labour leadership knew this, and were urged to put out olive branches to the LibDems several years ago.  However, the tribalists won the day, preferring to slate the LibDems for their duplicity and broken pledges.  The result, when it came, was that nobody was given a good reason for voting LibDem, despite the obvious need for a progressive tactical vote in those constituencies where the alternative to the LibDems was the Tories.  The LibDem vote collapsed across middle England mainly because right-leaning voters preferred to be represented by real Tories rather than orange ones.  However, a significant proportion of the LibDem vote was progressive – the kind of voters who in 2010 hoped the LibDems would a socially progressive brake in a coalition with an increasingly authoritarian New Labour.  These voters might have been persuaded to hold their noses and vote LibDem to keep out the Tories had the Labour leadership encouraged it much earlier in the day.  As it was, they put the short term pleasure of kicking the LibDems ahead of the long term need to stop the Tories getting a majority.

However, all of this is the political floss on top of a much more serious problem for Labour.  While the various factions within Labour will fight about whether their manifesto was too left wing or too close to New Labour – several Progress MPs have already suggested they chose the wrong Miliband – this merely covers a deeper malaise.  Scotland shows this most obviously.  The truth is that the reforms that Labour chose to make in the 1990s to silence a left wing that Kinnock, Smith and Blair (probably correctly) believed was preventing electoral success, had the consequence of disconnecting Labour from its core supporters in the traditional working class areas of Scotland, Wales and the North of England.  That an increasingly London-centric Labour leadership failed to understand the growing popularity of the SNP after 2011 was bad enough.  However, despite warnings from grass roots supporters in 2014, the Labour leadership chose to stand side by side with the Tories in a “NO” campaign based on fear over hope.  On May 7^th, Labour reaped the fruits of that particular seed, and are now – having lost their Scottish heartlands – unlikely ever to gain a majority at Westminster in future…  especially as the Tories will now gerrymander the constituency boundaries to make a Labour majority in England and Wales even harder to achieve.

But Labour’s woes do not end with the SNP in Scotland.  It is clear that in England and Wales, UKIP took sufficient votes off Labour – as they said they were going to, and as the Labour leadership airily dismissed – in Labour’s traditional working class heartlands in England and Wales to prevent Labour from winning seats that should have been in the bag.

Cynics – myself included – have long slated Labour for perpetuating poverty in its heartlands because the party has always feared that if its core supporters’ aspirations were ever met, they might vote for someone else.  Of course, this view is a little simplistic.  However, when the Labour party bureaucracy has created a political fiefdom on the back of European Union structural funding, as it has done in Wales, and when so many key jobs depend upon this funding continuing, we see a multi-million pounds a year reason to ensure that regions like the former South Wales coalfield never be allowed to climb out of poverty.  Indeed, Labour-supporting areas of the UK like the Rhondda are now the only places in Western Europe with poverty levels similar to those of the former Soviet Bloc states in the East of the EU.

The Labour leadership has always taken these traditional working class areas for granted simply because politically they have had nowhere else to go.  For the same reason, the Tories have done little beyond organising the odd garden festival for these people.  As early as the 1980s the nationalist parties in Scotland and Wales began to re-orientate themselves to a left-of-centre social democracy in order to outflank Labour on the left in these areas.  However, this strategy only really began to take off after Tony Blair had taken office and moved Labour firmly to the right – Plaid Cymru’s high point came in the first election to the new National Assembly, where traditional Labour seats like Islwyn (Neil Kinnock’s seat) fell to them.  However – almost as a warning of what would happen to the LibDems at the UK level, Plaid Cymru has suffered electorally as a consequence of going into coalition with Welsh Labour during the Blair/Brown years.  Unlike the SNP, Plaid Cymru - despite increasing their vote - were confined to their rural heartlands on May 7^th.

The obvious winners in Wales were the Tories who, in addition to holding the seats on Labour’s target list, managed to take a couple of seats – Gower and Vale of Clwyd – off Labour.  There is, however, a subtle sub-plot to the story.  It was UKIP, not Plaid Cymru, who came third in Wales, Having taken many of the traditional working class votes that Plaid Cymru must take from Labour if it is to succeed in next year’s Assembly elections.

Labour saw a similar shift in the working class vote to UKIP in the Labour heartlands in England.  While none of this translated into seats for UKIP, it played an important role in keeping Labour out of government.

This traditional – largely white – poorly skilled and educated working class that Labour has contemptuously assumed is in the bag at elections has been left behind.  They are not Labour’s “squeezed middle”, they are the people at the bottom of the pile; the hardworking families who must also rely on a mix of tax credits and housing benefit just to keep their heads above water.  These are the Gillian Duffy’s of this world – concerned about the lack of opportunities for their communities but unable to see a way out beyond curbing immigration and encouraging people on benefits – even people with serious illnesses and disabilities – to get jobs.  Labour’s contempt for these people was obvious enough in Gordon Brown’s reaction.  No hint of understanding of the conditions of the contemporary working class – which Brown and Blair kidded themselves they had done away with.  Just the one word dismissal; “bigot!”  But the response in 2015 was even more contemptuous – to avoid another “Gillian Duffy moment” just make sure the traditional working class are kept well away from any of the staged managed election events.  The Labour leadership chose to disconnect themselves still further from their traditional supporter base.

Nor was Labour offering hope.  To the 8 million working people who  still need benefits to top up their incomes, Labour’s shadow Work and Pensions Spokesperson, RachelReeves made clear that “Labour is not the party for you” – as if they could afford to lose these millions of voters.  Indeed, the whole economic policy was essentially Tory-lite - offering little beyond more cuts and more food banks to the working class.

Labour’s reward has been to deliver large sections of their supporter base to UKIP – a party that, whatever their failings, has worked to understand the fears and wishes of the disenfranchised.  This is where I agree with UKIP – we need to develop a politics that includes the disenfranchised who have for decades found themselves at the bottom of the pile.  These people aren’t threatened by poverty and homelessness, they are poor and homeless.  They are not people who are losing faith in the future; they are people who lost faith decades ago.  They are the people whose living standards fell during the New Labour years even as Labour's banker friends were reaping multi-million pound bonuses.  These are not people who need much Tory encouragement to believe that Labour messed up the economy… that was precisely their experience of the New Labour years.

That UKIP has been able to tap into and give voice to this group is testimony to their organisational skills.  This alone should be reason enough for anyone on the progressive side of UK politics to take UKIP seriously and to understand the desperate need to reconnect with the traditional working class.  More than this, however, it is an indictment of a Labour party so disconnected from its roots that its purpose is now unclear.  If Labour cannot give voice to the aspirations of ordinary people, we are left to conclude that the sole beneficiaries of a future Labour government will once again be their friends in The City.

When Ed Miliband resigned, he gave a speech thanking lots of people in the Labour party for their support.  What he should have given was an apology to the ordinary people of this country who are now going to face a full frontal attack on their living standards from a Tory party whose spite knows no bounds.  The lives of tens of thousands more disabled people will be cut short by the welfare system that Labour bequeathed to the Tories.  People’s health will suffer as swathes of the English NHS are sold off to the highest bidder and the Scottish and Welsh NHS is cut proportionately.  The economically illiterate policy of austerity will continue to plunge ever more people into poverty while doing nothing to curb government borrowing.  The Bedroom Tax will continue to socially cleanse the poor from London and the Southeast of England.  Millions more families will be forced to turn to food banks.  These and many others like them are the victims of a Labour leadership that contemptuously believed they could take ordinary people’s votes for granted without ever once trying to understand their needs and aspirations.  These are the people Ed Miliband and the rest of the Labour party owe an apology and an explanation to.

This is no longer simply a matter of whether Labour needs a right or left wing leader to replace Miliband.  It is much worse than that.  Labour must face their existential demons if they are ever to get back to power – they must be able to articulate what – in business terms – is the Labour party’s unique selling point – what are they for?

Unless and until Labour can answer that question, I see no good reason to support them.

May 7th – An Apology

On 7^th May 2015 I will mark a cross next to the Labour Party on my ballot paper.  But I won’t actually be voting for Labour.  You see, Labour have made it quite clear that they do not want my vote.  Living with a long-term, incurable illness, I have to claim tax credits to top up my income.  And Labour’s Work and Pensions spokesperson Rachel Reeves has stated quite categorically that “Labour is not the party for benefit claimants”. 

In an ideal world that would be more than 5 million benefit recipients off to vote for the Greens, Plaid Cymru and the SNP.  Sadly, since many benefit recipients don’t vote, it is more likely to translate into yet more disengagement from the political system.

This disengagement – egged on by siren voices such as Russell Brand – lumps all politicians together.  Of course the likes of Rachel Reeves make this belief all the more plausible.  Let’s face it, Labour are little more than pale-blue Tories, signed up to the worse of the Tory cuts and determined to maintain austerity for years to come.

But are they?  There are actually some very important differences between the parties.  On the environment, for example, Labour and the LibDems are committed to creating a carbon-free Britain by 2050 (although Labour seem to think that fracking might have a contribution to make).  The Tories, by contrast want to end the subsidies on renewable energy in order to subsidise fracking and to give tax breaks to the oil multinationals.  UKIP would go even further, reopening the mines and the coal-fired power stations.  On health, too, Labour want to reverse the tory reforms, while the LibDems want to make a serious attempt at addressing the UK’s high rates of mental illness.  On welfare, the Tories refuse to say where they will find £12bn of savings – other than it will not come from pensions.  Most likely they will savage housing benefit, forcing millions of disabled and unemployed people into homelessness.

My view is that it is the right of British politics that is currently in the ascendancy, and that our broken first-past-the-post electoral system may easily come to their aid if those of us on the left allow apathy to win over reason.  It is only a year since UKIP came top in the European elections.  And while they are unlikely to win seats in the general election, they have already forced the Tories to swing to the right in an attempt to stop their vote switching to UKIP.

There are similarities with 1979 – although then the UKIP tendency was within the Tory party.  In 1979 a highly discredited Labour party was widely regarded as no different to the Tories.  Many on the left were also contemptuous of Margaret Thatcher, believing that her policies were so extreme and disruptive that the people would rise up and kick her out of office were she to be given the chance to implement them.  Moreover, a period in opposition would allow Labour to regroup and emerge with a genuinely radical programme to transform the UK economy and create a fairer, more egalitarian society.

But Thatcher’s star was rising and the UK was shifting to the right.  Thatcher was certainly unpopular.  But the Labour left, under the hapless leadership of Michael Foot were even more unpopular.  And Thatcher – in office – was able to reap the huge rewards from North Sea Oil.  As we know to our cost, unlike the other oil exporting states which set up long-term sovereign wealth funds to benefit future generations, Thatcher squandered Britain’s one-off oil boom on maintaining high levels of unemployment, selling off the public assets (especially the housing stock) and allowing the baby boomers to retire at 50!  The oil revenues even allowed her to fight and win the Falklands War which has guaranteed Thatcherite governments ever since.

Cameron will not have oil revenues.  But that isn’t going to prevent him from re-inflating the housing bubble and selling off what remains of the public assets.  He will try to frack his way to prosperity (although fracking is only profitable if oil prices are persistently above $100 per barrel).  He will also most probably take Britain out of the EU – an act that, whatever its effects on the UK economy, will almost certainly result in the breakup of the United Kingdom.

So, for all of their failings there are real differences between the parties.  And, since the political drift is to the right, even a vote for party of the centre is better than a protest vote, spoiling the ballot paper or simply staying at home.  From where I am sat – in one of the closest Labour-Tory marginal seats in the country, my first need is to vote against a Tory party that I believe will be catastrophic for Britain.  Only one party can beat the Tories in this seat and that, sadly, is a Labour party the heads of whose leaders I would take great delight in soundly knocking together.

I wish there were some other way.  I wish we had a democratic electoral system so that people could feel free to vote for the party they want to see in government, rather than having to vote against the cretin who would get in if they did.  But we are where we are.  So, on the morning of May 7^th, with neither enthusiasm nor optimism, I will put a clothes peg on my nose and do the least bad thing the system allows and lend my vote to Mr Miliband.