Cameron’s policy cannibalism: economic policy eating environment policy

Published by the Green Alliance, in January 2012.

A toxic conjunction of incompetence and ideology has all but destroyed David Cameron’s promise to lead the ‘greenest government ever.’ In doing so the Coalition has wasted a rare opportunity to align the economy and the environment. Instead, it has chosen to manufacture a collision between them that will do neither any good.

The incompetence has been on display from the beginning. Just three weeks after proposing to sell-off the Forestry Commission the Coalition was forced into a U-turn by public outrage. It simply got the politics completely wrong. An issue it saw as being about efficient economic management was seen by the public as an assault on their habits and identity.

People like woods. They particularly like their local woods. They know they are now better managed, more interesting and more accessible than they have ever been. It was not obvious that anything was so broken that it needed fixing.  The Government did not even try to make the political case for change until after the row had exploded.

It announced the disposal of the Forestry Commission months before DEFRA was ready to say how it would be done. This allowed the activists to get their political 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 any disposals with a package of measures to protect public access and biodiversity it was too late.

This happened early enough in the Government’s life to be put down to inexperience. But the constant sound of Whitehall carts rolling through the corridors of power well ahead of the horses gives the lie to this comforting thought.  The government’s whole approach to policy seems to be ‘Ready, Fire, Aim.’

This is not only true on the environment.  The absurdity of building an aircraft carrier with no planes is a lasting gift to a legion of comedians.  The need to ‘pause’ health legislation already on its way through Parliament to confer with the professions is only the most notable example of crucial interests being consulted after the government has acted.

There is almost certainly a good case to be made for simplifying the planning system just as there was on the reduction of solar subsidies. But the Government has not even tried to make it. Instead it has made an argument so clearly implausible that even the Daily Telegraph took up arms against it.

The planning system, we are told, is a major obstacle to economic growth. Out must go 1,000 pages of detailed planning guidance and in must come 58 pages of sloppily drafted good intentions. This will not generate much economic growth of any kind, let alone green growth. It will, however, grow the income of planning lawyers as more and more planning applications end up in the courts.

Climate policy has so far escaped this eruption of incompetence. It has been the one environmental policy area where the government has stuck consistently, creditably and competently, to its promise to be green. This has largely masked the increasingly harmful consequences of its policy incompetence elsewhere on the environment.

Unfortunately, what incompetence has failed to accomplish, ideology now looks determined to achieve. The Chancellor has recently chosen to launch a totally gratuitous attack on the environment. The anti-green language in his Autumn Statement sets a new standard for callow ignorance. The environment, he implies, will ‘price British business out of world markets’. We must not ‘burden them [businesses] with endless social and environmental goals’. Regulations must not be allowed to place ‘ridiculous costs on British business’.

It is doing none of these things. British businesses, especially the more successful, Tesco for example, have taken on social and environmental goals because there is a very strong business case for doing so. Their customers demand social responsibility and reducing environmental impacts cuts costs. The emergence of corporate social responsibility departments in a growing number of companies is not driven by government but by customers.

There is no evidence that the planning system is a barrier to growth. Indeed, as the National Trust has made clear, well over 90% of planning applications are approved, mostly within a year. The Chancellor would find it very difficult to come up with many examples of major infrastructure projects that have been prevented by the planning system. What killed nuclear power in the Thatcher years, as it looks increasingly likely to do again, was lousy economics not public inquiries.

The Chancellor is not stupid. He knows that the environment is not really the obstacle to growth he is pretending. But like his boss, he has to placate the baying right-wing zealots behind him in the House. In his case, they are increasingly anxious about the failure of growth to appear or look like appearing any time soon. Since the failure cannot be his fault, someone must be found whose fault it is. The environment, like Europe, is a convenient scapegoat.

We know exactly what we need to do to generate growth. And, what is more, growth that really would be green. Investing in the infrastructure for a low carbon, resource efficient economy will both kick start the growth that is currently missing and make our economy more resilient to the price shocks of an age of scarcity. It would play a crucial part in driving a wedge between global energy prices, about which we can do little, and consumer’s bills, about which we could do a lot.

We need to spend many billions of pounds of public and private money on the grid enhancements, high-speed rail network, carbon capture and storage pipelines, distributed generation technologies, integrated recycling plants, energy efficiency improvements and electric vehicle charging networks that are the platforms for growth of the economy as a whole. These investments would underpin national prosperity in the 21st. Century in exactly the way the motorway networks underpinned prosperity in the 20th century and the railways in the 19th century.

Many of the policy tools needed to set us firmly onto this benign path to the future are already available. But they, too, are crippled by this sorry cocktail of incompetence and ideology. DECC’s ingrained institutional incompetence with energy efficiency is determined to waste the opportunity of electricity market reform by prioritising new supply over demand reduction. The Treasury’s ideological obsession with deficit reduction is crippling the Green Investment Bank as mechanism for accelerating the flow of private capital into the low carbon economy.

Aircraft carriers without aeroplanes have a lot in common with banks that cannot borrow. We are presently witnessing a Government starved of inspiration on both the economy and the environment. The result is a bizarre outbreak of policy cannibalism in which its economic policy is eating its environment policy. This may well cause the Prime Minister some political indigestion as the election approaches and he is called on to account for his green promise.