ENDS Report 433, p.54, February 2011.
The coalition government failed to make a political case before announcing the sell-off of England’s state-owned woodlands. It will do well to learn the lesson of what followed.
In November 1999 I wrote an article, “Sleepwalking to Seattle”, for the Times. I pointed out that trade policymakers had become too enthralled by the infinite intricacies of trade policy that they had forgotten to do any trade politics.
Global leaders had assumed the argument for trade liberalisation had been so completely won that making the political case was unnecessary.
But two weeks later the opening of the Millennium Round of trade talks collapsed in a fog of tear gas as anti-globalisation activists took to the streets to challenge that assumption.
This is a season for political surprises. In Tunisia and Egypt they have been hugely consequential. Here they have been rather less so, but noisy all the same. David Cameron and Caroline Spelman got an unpleasant surprise when the proposed disposal of the Forestry Commission blew up in their faces.
It took Egyptian president Hosni Mubarak a long time and lots of noise before he got the message. Our own government was as slow to get the message that on forests the British public really meant it.
Our mini-political surprise has not led to the overthrow of a regime, but it has now led to DEFRA being instructed to drop its proposals and start again. Coming just three weeks after the proposals were issued, this is a serious setback for the department and its Secretary of State.
So why the explosion of public outrage? Largely because the government got the politics completely wrong. It never understood the cultural importance of woods to the British people. What the government saw as an issue of efficient economic management was seen by the public as an assault on its habits and identity.
People like woods, particularly their local woods. They like walking in them. They like knowing they are nearby. They know they are now better managed, more interesting and more accessible than they have ever been. It was not at all obvious to most people that anything was so broken that it needed fixing.
Because the government saw this simply as a matter of managerial efficiency it did not even try to make the political case until after the row had exploded. It announced the disposal of the Forestry Commission when it published the now notorious Public Bodies Bill. This was months before DEFRA was ready to say how it would be done.
This allowed the activists to get their act together and define the issue for the public long before the government realised it had a problem. By the time DEFRA produced its plan to separate commercial forestry from heritage forestry and surround disposals with measures to protect public access and biodiversity it was too late.
The fog of war had obscured the policy battlefield. The “greenest government ever” pledge had been dented. No one was very interested in the actual policy and ministers were in retreat.
Even a little effort to make the political case would have greatly lowered the political cost of a new forestry policy. Maybe the lesson will be learned. It needs to be. The landscape ahead is loaded with issues where the politics are much more difficult than the policy.
Nowhere is this truer than with electricity market reform. Like trade policy, this opens up a bedazzling wonderland of intricate policy options. Just getting a proposal out the door has been so complex and difficult that for minister and officials this itself seems like an achievement. It is easy to misinterpret the current muted response from the lobbies as reflecting a non-existent consensus on what needs to be done.
It is more likely however that this is simply the calm before the storm. It takes a while for companies and NGOs to catch up.
DECC began thinking about this issue before the election. It has taken over two years to arrive at its current understanding. Most companies, apart from the major rent seekers such as EDF, have only recently started to understand the full implications and to shape their positions. The NGOs are only now getting going.
The original political case for picking up this particularly difficult hot potato is now pretty threadbare. Exaggerated fears of a growling Russian bear withholding our gas look silly in the light of the International Energy Agency’s forecast of a glut.
The generation gap due to have left us freezing in the dark by 2015 was always an illusion. This is fortunate, as one unintended consequence of electricity market reform will freeze much new generation investment until the shape of the new market becomes clear somewhere around, well, 2015.
The coalition took over this policy commitment from the previous government and in its reformist passion has pushed vigorously on with it. It is less clear that it has thought through the problems surrounding the mare’s nest of entangled and conflicting interests it entails. These will become clear as the consultation ends.
Signs of the difficulties ahead are already apparent. The environmental NGOs are challenging the floor price for carbon as being nothing more than another stealth tax by the Treasury.
In its current form it is certainly not a floor price for the ETS, it is actually a very old-fashioned price support mechanism of the kind that Conservatives used to rail against.
A debate is beginning to emerge outside government about what should happen to the revenues from the taxes and auctions under consideration. Within government, there is no such debate. The Treasury is emphatic. They all belong to us.
Cracks are appearing in the views of the big six utilities. Another campaign is gathering force to insist the demand management investments are treated equally with new supply options. And no one yet knows who will contract with whom for what.
All this would be pretty difficult if there was a compelling political case for doing this at all. There may even be one. But it has yet to be heard.