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 Images
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The future of policing is still at risk even after George Osborne's U-Turn

The police have avoided the worst, but crime is changing and they cannot stand still. 

We will have to wait for the unofficial briefings and the ministerial memoirs to understand what role the tragic events in Paris had on the Chancellor’s decision to sustain the police budget in cash terms and increase it overall by the end of the parliament.  Higher projected tax revenues gave the Chancellor a surprising degree of fiscal flexibility, but the atrocities in Paris certainly pushed questions of policing and security to the top of the political agenda. For a police service expecting anything from a 20 to a 30 per cent cut in funding, fears reinforced by the apparent hard line the Chancellor took over the weekend, this reprieve is an almighty relief.  

So, what was announced?  The overall police budget will be protected in real terms (£900 million more in cash terms) up to 2019/20 with the following important caveats.  First, central government grant to forces will be reduced in cash terms by 2019/20, but forces will be able to bid into a new transformation fund designed to finance moves such as greater collaboration between forces.  In other words there is a cash frozen budget (given important assumptions about council tax) eaten away by inflation and therefore requiring further efficiencies and service redesign. 

Second, the flat cash budget for forces assumes increases in the police element of the council tax. Here, there is an interesting new flexibility for Police and Crime Commissioners.  One interpretation is that instead of precept increases being capped at 2%, they will be capped at £12 million, although we need further detail to be certain.  This may mean that forces which currently raise relatively small cash amounts from their precept will be able to raise considerably more if Police and Crime Commissioners have the courage to put up taxes.  

With those caveats, however, this is clearly a much better deal for policing than most commentators (myself included) predicted.  There will be less pressure to reduce officer numbers. Neighbourhood policing, previously under real threat, is likely to remain an important component of the policing model in England and Wales.  This is good news.

However, the police service should not use this financial reprieve as an excuse to duck important reforms.  The reforms that the police have already planned should continue, with any savings reinvested in an improved and more effective service.

It would be a retrograde step for candidates in the 2016 PCC elections to start pledging (as I am certain many will) to ‘protect officer numbers’.  We still need to rebalance the police workforce.   We need more staff with the kind of digital skills required to tackle cybercrime.  We need more crime analysts to help deploy police resources more effectively.  Blanket commitments to maintain officer numbers will get in the way of important reforms.

The argument for inter-force collaboration and, indeed, force mergers does not go away. The new top sliced transformation fund is designed in part to facilitate collaboration, but the fact remains that a 43 force structure no longer makes sense in operational or financial terms.

The police still have to adapt to a changing world. Falling levels of traditional crime and the explosion in online crime, particularly fraud and hacking, means we need an entirely different kind of police service.  Many of the pressures the police experience from non-crime demand will not go away. Big cuts to local government funding and the wider criminal justice system mean we need to reorganise the public service frontline to deal with problems such as high reoffending rates, child safeguarding and rising levels of mental illness.

Before yesterday I thought policing faced an existential moment and I stand by that. While the service has now secured significant financial breathing space, it still needs to adapt to an increasingly complex world. 

Rick Muir is director of the Police Foundation