Rio+20 and responsible capitalism: opportunities for Labour

We cannot rely on the market to create sustainable growth.

Next week, world leaders will meet in Rio de Janeiro to discuss how the global economy can tackle the joint challenges of global poverty reduction, social equity and environmental sustainability. The United Nations Conference on Sustainable Development marks the 20th anniversary of the 1992 Earth Summit: hence the popular short-hand, "Rio+20".

For environmentalists, Rio+20 is one of the most significant events to happen for a generation. But that's precisely the problem. As long as it remains the preoccupation of the green movement, Rio+20 will deliver only a fragile consensus that will ultimately fail.

The natural environment is fundamental to supporting and supplying the basis of economic value. Yet we do not consider the protection and enhancement of the natural environment is a strategic economic priority. Part of the reason for this is because our conventional model of economic growth values short-term return and wealth creation, rather than long-term productive wealth. While we may increase GDP in the short term, our conventional approach to economic growth can actually reduce a nation’s wealth.

Ed Miliband recognised these limitations in a speech to the Social Market Foundation last year where he told the audience that rules that encourage wealth creation focus on "short-term returns not the productive creation of long-term value". A major consequence is that resource consumption and the loss of ecosystems are treated as a benefit rather than a cost. And communities, co-operation and equality are undervalued in favour of creating conditions to maximise consumption.

An important challenge for Labour is now to translate Ed Miliband's vision for a "new economy" into a shared understanding of exactly what we want, and need, from the economy - and to be clear about the measures that will ensure that this can be achieved sustainably.

For many years there has been a lively debate about how the transition to a "green economy" will happen. However, no one has successfully managed to align the green economy with the everyday priorities of people, business and politics. Nor has anyone managed to set a pro-growth agenda that is also clear about the long-term productive value of a sustainable economy.

Most would agree that our expectations for the economy include job creation; competitiveness; the fair distribution of resources and wealth; fair and affordable access to food, water and energy; and enhanced biodiversity and ecosystem services. While these outcomes are complementary, much of the debate about our economic future has hitherto traded one aspect against another: green groups have one priority, business another, politicians another still.

Rio+20 provides a valuable political focus to continue work already underway on how Labour can address this. A question that the party might seek to answer is how we embed the three pillars of sustainable development - economic, social and environmental - into policy-making so that they become a natural by-product of the economy's total activities.

This would create huge economic opportunities for the UK - new green technologies, sustainable innovation, sustainability skills and sustainable investment products - all of which will also be instrumental in assisting emerging economies with the transition to a green economy.  

The Labour Party has a strong track record on the green economy. The world’s first Climate Change Act and the Climate Change Committee; the 2005 Sustainable Development Strategy with its recognition of the concept of environmental limits; the Sustainable Development Commission; the Commission on Environmental Markets and Economic Performance and the Low Carbon Industrial Strategy are all good examples of the Labour government's successes.

The party's approach in government was based on an understanding that policy and regulatory intervention is necessary to correct the market failure of un-priced environmental costs and benefits - thereby reconciling the free market economy with environmental sustainability. It understood that a strong and robust economic-environmental policy framework would also encourage finance and investment in low-carbon, resource-efficient business operations and supply chains.

Green conservatism of the sought advocated by David Cameron is flawed in this respect as it fails to reconcile the free market economy with environmental sustainability. It relies heavily on "environmental stewardship", which typically values the natural world only in terms of its contribution to human well-being. It leave the environment detached from and irrelevant to the wider economy.

As Chancellor, George Osborne has resurrected the age-old argument that we need to choose between economic growth and the environment - despite stating in 2009 that he had "always considered this to be a false divide" and that "economic growth and environmental sustainability can go hand in hand". He is the cheerleader for the outdated view amongst Tory MPs that the free market alone can satisfy the long-term needs of the economy.

For the reasons Miliband identified in his speech to the Social Market Foundation, an over-reliance on free markets - and their short-term priorities - is not a viable response to the challenges we face.

He has therefore been absolutely right to distinguish between "productive" and "predatory" capitalism. If it can underline the links between economic and environmental sustainability, Rio+20 will represent a valuable opportunity for the party to develop further examples of how it would tackle predatory capitalism.

It’s a chance to challenge the limitations of Tory economic orthodoxy. Most importantly, it’s a chance to start thinking about how the next Labour government can deliver long-term growth and sustainable wealth creation, while at the same time improving human well-being, creating jobs, ensuring fair and affordable access to resources such as water and energy, reducing inequalities, and tackling poverty.

Danny Stevens is an independent environmental policy and political consultant and a Labour councillor in Hackney.
 
Tristan Stubbs works on climate change and development policy at the Overseas Development Institute.

Terena indians dance around a Brazilian national flag during the opening of the Green Games as part of the UN Rio+20 environmental summit. Photograph: Getty Images.
Photo: Getty
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.