Five items for the next PM’s in tray

Big Ben & Houses of ParliamentThis article features in the latest issue of Green Alliance’s journal Inside Track which focuses on priorities for the next parliament.

The fog surrounding the next government’s priorities couldn’t be thicker. We are heading into an election that no one can call, with a possible EU referendum that could obscure all other issues. Nevertheless, it is useful to consider what, in normal weather, the political landscape would look like, and what will be in the next PM’s in tray irrespective of the party they represent.

At Green Alliance we have identified five areas of action which we think will be central to successful green outcomes in the next parliament and which we would expect ministers to resolve within a year of coming to power:

1 Diplomatic strategy
Two of the world’s largest diplomatic processes culminate in 2015: the Sustainable Development Goal negotiations and a new UN agreement on climate change.

Influencing these is made easier by the recent speech by foreign secretary, Philip Hammond, building on what the Foreign and Commonwealth Office, under both William Hague and David Miliband, has done already to put the UK at the forefront of international diplomatic efforts. However, the Department for International Development has been relatively silent on the role of climate in ensuring development outcomes.

The UK still has a great reputation in the climate talks. Focused intervention by the next prime minister can get us a place at the top table, and make it more likely to achieve a deal that supports the UK’s decarbonisation approach.

On the plus side, US secretary of state, John Kerry, has been preparing the ground in his climate change diplomatic offensive, and the US and China appear to have a greater appetite for agreement that they did at Copenhagen in 2008.

If the next prime minister wants to influence the outcome of these negotiations, they will have to use their first phone calls with heads of state to flag the UK’s commitment and its priorities.

2 Spending priorities
Within a few days of forming a government an emergency budget will have to be agreed and, within a year, the next Comprehensive Spending Review (CSR) to 2020 has to be settled.

The environment has never benefited from large public spending, but there are some areas where new money will be required, and others where the ability to maintain institutional capacity to assess or respond to environmental risks could be threatened by further departmental staff cuts.

DECC and the Defra each have a single item which distorts their budgets: nuclear decommissioning and flood defence respectively and, in both cases, these are seen to be untouchable.

The risk is, therefore, that further departmental budget reductions will lead to the loss of whole policy functions, particularly in Defra where it has already started to jettison responsibility for commercial waste and has not yet found a way to deliver on the promises of its 2011 natural environment white paper.

The big spending negotiation for DECC will be over the future of the Levy Control Framework to support new nuclear, CCS and renewables projects after 2020, because investors will be seeking early clarity. The issue for the prime minister will be whether Defra can survive as a going concern (see point five).

3 Europe’s role
Europe will be a big issue for the next parliament whichever party is in control.

The political commentator Steve Richards has observed that, because of Cameron’s 2017 referendum commitment, “if (he) wins he would be in for at least two years of hell over Europe’.

Labour may be more unified but they have also called for a ‘red card’ system to block new EU laws.

Whilst both parties have acknowledged the important co-operation role the EU has played on cross border environmental issues, the risk is that new EU agreements on energy and climate, and new policies on resource recovery, could be tied up or delayed by high wire negotiations.

In the end it will be impossible to keep eurosceptics happy at the same time as securing stronger EU policy on the environment.

4 Policy reform
A new government has three classes of policy: detailed policies from its manifesto, the policies it adopts from the last government and meta policies which it tries to apply to most decisions. It is in this last category that the parties will diverge the most.

Labour have made the cost of living a meta policy and decentralisation to city and county regions is emerging as another. Given that its energy policy will prioritise market reform and price control in the name of reducing living costs, the question will be whether it can also win public support for higher spending on low carbon supply.

The Conservative party’s big narrative is economic efficiency and stability, which it translates as policy to reduce short term costs to business and consumers. This means that, whilst it will remain committed to the Climate Change Act under Cameron, it is likely to want to continue to reform energy policy, and negotiations on the future of low carbon energy supply will be fraught in a Conservative government.

On the natural environment it is possible that all parties will become more active, particularly if economic pressures start to abate and Defra’s excruciating funding constraints can be eased, because it is publicly popular and relatively easy to make a difference on the ground.

The harder problem which will dominate Defra’s agenda in the next parliament will be the renegotiation of the Common Agricultural Policy, which comes around for yet another round of reform, and remains uniquely unpopular with both market liberals and conservationists.

Business pressure will continue to build for government to get to grips with resource security and the manifestos will tell us whether the parties have spotted this, or whether they remain in denial about the risks to the UK economy from critical material supplies.

5 The machinery of government
Prime ministers tinker with departmental structures to meet the needs of their ministers, and to signal a new priority. David Cameron has only been an exception to this rule because a coalition meant he needed to maximise the number of cabinet posts available. Departments can be formed or disbanded very quickly.

Defra was created over a weekend to give Margaret Beckett a big portfolio in 2001 and to draw a line under MAFF’s poor management of the foot and mouth outbreak. DECC was created over one night to respond to growing concern about energy and climate security and to give Ed Miliband a cabinet role.

The logic for DECC remains strong, as climate and energy are politically tricky and technically complex issues for government, but the case for Defra’s continuation is weaker, given its funding crisis and its poor performance on the environment. Business groups have already called for its resource responsibilities to be transferred to BIS. The department has struggled to attract big hitting ministers like Michael Heseltine, Ken Clarke and John Gummer, who all ran the department when it also had responsibility for local government and housing.

The case for making Defra bigger will grow and a merger with the Department for Communities and Local Government is one option. It could deal with local environment, resources and councils in an integrated way and, since they are at the heart of the UK’s localist agenda, it might be appealing for either Prime Minister Cameron or Prime Minister Miliband seeking to signal one nation credentials.

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