There are measures to like in the Queen’s Speech. I argued for a soft drinks industry levy 15 years ago, although I warn the Government that it makes no sense to tax sugar while simultaneously cutting funds for sport in schools. Obesity must be tackled first and foremost through exercise, not through stand-alone measures like sugar tax. The prison and courts reform Bill, if it is a genuine attempt to turn what is currently a penal system into a correctional and rehabilitation system, will certainly have support, and will bring about a much-needed transformation.
So there are measures to like, but beware: nothing shows the weakness of an Administration more than a failure to include big, controversial Bills in a Gracious Speech. This Queen’s Speech certainly contains policies that are wrong. The education Bill, for example, with its academisation programme and its national funding formula, marks an appalling return to the old obsession with structures rather than standards. The formula will take £18 million from schools in Brent, and will call that fair. We have reception classes with 29 children speaking 21 different mother tongues, and an 8.6% per pupil spending cut for them is not fair. It is wrong.
My point is that the Government have run out of steam or are too insecure about getting support from their own Members to risk big controversial measures. So perhaps in a spirit of mendacious assistance, I shall set out the Bill that I believe the Government could and should have placed at the heart of the Gracious Address. A green growth Bill would set a clear trajectory for the UK to lead the world in today’s low carbon industrial revolution just as we did 250 years ago in the coal-powered industrial revolution. Such a Bill would deal with energy, land use, water resource, transport and green city infrastructure in an integrated and sustainable way.
A green growth Bill would also transform the Treasury model from its current fixation on GDP growth to one that focused on wealth maximisation. To understand that GDP and wealth are not the same, one only needs to recall that the 2013-14 floods were the single biggest contributor to GDP in 2014 while simultaneously ruining thousands of people’s lives. GDP measures productivity, not wealth. A green growth Bill would make our country focus on what really mattered.
Businesses currently extract an estimated $7 trillion globally from the environment each year. This is in the form of free non-renewable goods and the equally free renewable services which they utilise. However, that $7 trillion does not appear on balance sheets; these are free goods—or externalities, as classical economics prefers to call them. No Government account exists to chart their contribution to the national wealth, yet they represent the annual income from a gigantic asset base that is quite simply the precondition of all other economic activity. What sort of economic managers do we have who fail to quantify an asset base of this magnitude and importance?
A green growth Bill would establish natural capital accounting so that by measuring nature we could make its contribution to our economy visible and allow for effective decision making. Such a Bill would appoint a Chief Secretary to the Treasury equivalent who would examine not just departmental resource and departmental expenditure limit budgets but their natural capital and ecosystem services depletion as well. Our natural capital debt is arguably a much more urgent issue than our financial debt, yet our Governments are failing spectacularly to reverse the decline in that asset base.