Labour’s Energy Price Freeze: Good tactics, bad strategy?

Jo-Anne Nadler

On the surface, the continued popularity of Labour’s proposed energy price freeze seems to undermine one of the tenets of centrist, post-New Labour politics: the farther you move from the centre ground, the less electable you become.

The proposal, which would prevent energy companies from raising energy prices for 20 months following the next general election, remains incredibly popular with the public, despite cementing the media’s perception that ‘Red Ed’ Miliband is more left-wing than his predecessors.

Reactions in the media have been predictably divided. Figures on the Right have derided the proposal as a return to the bad old days when Labour openly attacked private industry. Fraser Nelson, editor of the Spectator, wrote with horror at the time of Miliband’s announcement: “the scale of his ambition is breathtaking. And terrifying.”

Those on the Left, meanwhile, have largely embraced the freeze, seeing it as a welcome departure from New Labour’s cosy relationship with big business. Independent columnist Owen Jones argued it’s a positive development because “the bullies at the Big Six must be stood up to”.

But whereas the conventional wisdom holds that modern parties, whether left-wing or right-wing, must avoid ideological policies because they turn off the public, Labour’s price freeze has proven extremely popular. In a YouGov poll following the conference, 63% said they supported the price freeze, with only 26% opposed.

Not only this, but of all the party leaders, Ed Miliband received the largest and most sustained post-conference ‘bump’. At the start of conference season, 21% thought he was doing well as Labour leader – following conference, that number rose to 30%. So not only is the policy itself popular, but Ed Miliband is more popular for having proposed it.

Popularity, however, does not necessarily translate into votes. Dan Hodges, who has gained notoriety as a Labour contrarian who vociferously objects to what he sees as Ed Miliband’s leftwards lurch towards unelectability, has argued that the price freeze will damage Labour at the next election. On BBC2’s Daily Politics, he explained why, despite its popularity, the policy was a bad idea – using the Conservatives as a point of comparison:

“David Cameron could implement a raft of policies advocated by the hard right of his party. A number of those policies – hanging, banning burkhas or whatever – would actually be popular. But in strategic terms, for David Cameron, they would be a disaster. Because although the individual policies were popular, they would communicate to the general public that the Conservative Party were regressing.”

According to Hodges, the same moderating dynamic applies to the Labour Party. Just as the Conservatives would be unwise to adopt some individually popular right-wing policies because it would reinforce their image as the “nasty party”, he argues that Labour is making a strategic mistake by adopting a superficially popular left wing policy which will reinforce their image as anti-business and bad for the economy.

His analysis, that the price freeze proposal is good short-term tactics but bad long-term strategy, is compelling. But perhaps Hodges underestimates just how unpopular the Big Six energy companies are. In a YouGov poll last month, only 12% of respondents said they trust major energy companies to treat their customers fairly. Incredibly, this makes them even less popular than the major banks, which are trusted by 27%.

Labour strategists must be hoping that this widespread mistrust has made the public receptive to a narrative painting Labour as the only party prepared to stand up to large corporations, rather than a party that is anti-business.

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