Black swan on the Thames ?
Twenty-twenty hindsight, the human need to find meaning and the huge industries tied up in claiming to predict the future tend us towards rational explanations for social events. Even when something extra-ordinary and world changing occurs – 9/11 or the credit crunch, for example – we will find reasons for saying that it was inevitable. It is not easy to walk a consistent course between on the one hand, the truism that every event has causes and is therefore as some level explicable in terms of its causes and, on the other, the existence of black swans (huge, unpredictable events), emergent phenomena (things which are qualitatively more than simply the sum of their parts) and tipping points (tiny causes which lead to huge effects).
But once in a while, in something which feels like a child’s excitement as the milometer on the family car clicks over ten thousand, there is a moment when it feels like something radically discontinuous has become a credible possibility.
I came perilously close to nailing my colours to the mast of a particular London Mayoral candidate the other day, so let me underline that my voting intentions are between me and the ballot box, and anyway the RSA website is not the place for me to parade my political preferences.
However, one doesn’t need to support Siobhan Benita to be fascinated by her unheralded rise. Given that just about the only people who predicted George Galloway’s success in Bradford West were the bookies, it is surely interesting that Ms Benita’s odds have fallen from 500-1 to 50-1 in the last 48 hours. No one should get carried away – the bookmakers stopped taking bets when Galloway was odds-on and if a horse wins the National at 50-1 it will be accurately described as a rank outsider – but still, as the cliché has it, in politics momentum is everything. Ms Benita also has the advantage of the most popular slogan in the current election. Not the rather prosaic ‘Siobhan for Mayor’ which features on her website but the phrase you can hear wherever Londoners meet; ‘they’re both as bad as each other’.
Reflecting the RSA’s interest in promoting citizen engagement in decision making and more informed public discourse, I have written in the past about the way political parties are squeezing the life out of our politics. Ultimately, I am a friendly critic. I want politics to be about issues and programmes not personalities so my intention is to save parties from themselves. But the concerns of people like me have had little purchase as long as the voters had nowhere else to go. A classic analysis of failing corporations argues that a symptom of decline is when they are more interested in their competitors than the customer. Sadly, as the current shenanigans around Labour’s process for selecting Mayoral candidates underlines, many people in political parties seem more concerned about competition within their party than the customers.
One swallow doesn’t make a summer and one Galloway doesn’t mean the end of the party system. But if Galloway was followed by Benita and then perhaps by a swathe of Mayors and police commissioners, then who knows?
I have not met Ms Benita but I suspect she may be about to face the biggest challenge of her life. If the odds continue to shorten then the major parties and media will try to do to her what Labour failed to do until too late in Bradford, put the outsider under the kind of scrutiny that mainstream politicians live with every day. It will be tough. If she performs well under pressure she might lose some of her outsider appeal, if she cracks….well, she cracks.
Mind you, given that just a few days ago virtually no one had heard of her – indeed she is still literally invisible in some opinion polls – I bet it’s a challenge she’d be delighted to face.
Cluster muster
At last week’s Scottish Renewables Conference, the question was raised whether Scotland could make the advances in cost effectiveness needed for technologies like wind and wave to compete, without subsidy, with other energy sources. An interesting response from the floor was to argue in the affirmative on the basis of the cluster of attitudes, skills and resources now benefiting the industry. All the major political parties in Scotland support investment in renewable energy, as does the public. The country also boasts more than half the world’s total research in wave and tidal power. The history of oil and gas provides confidence, experience and a stock of energy-related entrepreneurs and investors.
The answer got me thinking about clusters for public service innovation. They too would require buy-in not just from politicians and senior officials, but key stakeholder and user groups. Also needed would be input from university or think tank specialists in public service reform, and service designers would have a role to play. Vital too would be social entrepreneurs and potential investors (or at least people with expertise in how to lever in investment). And – an often overlooked resource – the cluster would also contain people with expertise in the organisational change process, which is a corollary of substantial innovation.
One approach would be to undertake an initial survey of whether theses aspects of a potential service-related cluster exist in a locality. The implication is that an important part of the full process of innovation is to identify missing elements and try to put them in place.
Of course, the idea of bringing people with different innovation-related skills together to solve a problem isn’t at all new. In fact there are many such processes and events, Social Innovation Camp being among the best known. But while SIC focuses on weekend events to develop and refine web based solutions, the innovation clusters I am describing would be just as interested in redesigning institutions and interactions.
More importantly, they would be more like industrial clusters in the sense of being a long term combination of people and organisations working both through formal processes and informal meetings and conversations.
Once the components of a local innovation cluster are in place, the challenge is to find platforms, processes and places so that there are plenty of opportunities for ideas and initiatives to bounce around the cluster. Using the kind of social network mapping tools being used and refined by RSA researchers, it would be possible to track the flow of information and ideas around the cluster.
Overall, public service productivity continues to flat-line. This is an important reason why the social aspiration gap (between people’s needs and expectations and what the state can provide) is widening. Innovation needs to be seen as a continuous imperative for public services. But do most localities have the resources and relationships which offer a fertile soil for innovation to be planted and grow? And, if not, how could public service innovation clusters be created and maintained? These are questions I’d be keen for the RSA to explore further.
Cameron’s nuclear option
A small moment of controversy at yesterday’s Scottish Renewables conference concerned nuclear power.
Guy Doyle, Chief Economist of the Energy Unit at Mott MacDonald, presented findings from a major research project on the costs of various sources of energy. As he said, this is a very inexact science given the range of important unknown variables like the cost of oil and gas, improvements in renewable technologies, the upfront cost (including cost of capital) of new power stations, not to mention heated debate over the externality costs which should be attached to different forms of energy. However, using the most robust assumptions available, Doyle argued that new nuclear still looks like one of the cheapest sustainable energy sources in the medium (2020) to long (2050) term.
In questions a young woman asked: ‘given that Siemens have pulled out of the nuclear industry and given the problems France is having with its attempts at new nuclear, aren’t the industry’s prospects and any hopes for new cheaper, safer types of nuclear swiftly receding?’. Doyle responded by saying that Russia, China and South Korea all seemed to have quite economical nuclear for their home market, but the question remains over whether a combination of public opinion, stricter regulation and access to investment funds might kibosh plans for an expansion of nuclear in the UK.
No doubt the questioner will feel her doubts have been confirmed by today’s news that EON and RWE have withdrawn from the project to develop a new nuclear power station for Anglesey. As Robert Peston points out, the Coalition’s reaction – which is to argue that the other projects are still on track – may be too sanguine. The nuclear sector wants more certainty about future income streams, but certainty is something in short supply right now.
Much in the energy sector is on hold until the conclusion of the Government’s already delayed Electricity Market Review. The review has to achieve the difficult balancing act of keeping prices (and subsidies) down, while securing supply and delivering on carbon reduction targets. The sector and its investors say they want predictability above all. But the more the Government provides long term price guarantees the greater is the danger of tying itself into unnecessary cost when prices, stocks and technologies change.
Standing back, there is a connection between the nuclear story and lengthening queues at petrol stations. Our immediate need for energy is absolute and visceral. In the short term, we panic and protest if we think we will be without fuel, and even minor power cuts are a reminder of the utter dependence of modern life on the steady flow of energy.
As a policy problem, energy is one of the toughest containing many of the ingredients for challenging decision making; acting for the long term, managing unquantifiable risks, balancing public private collaboration with the need for competition etc. Public attitudes pose another difficulty; policy makers face unrealistic expectations and under most scenarios need to encourage significant behaviour change, particularly around demand management. Yet the energy debate tends to be dominated by energy wonks, vested interests and people sitting astride a very big hobbyhorse (peak oil conspiracy theorists on the one side, pathological wind farm haters on the other).
I had a brief deep dive into energy during my time in Number Ten when Tony Blair decided it was a key strategic priority (this was the beginning of a shift in official thinking about nuclear). This convinced me both that energy – clearly and honestly explained – is an issue which can engage any thoughtful citizen and that raising public awareness is an important part of element of making good policy.
As David Cameron tries to put Number Ten lasagna and Gregg’s pasties behind him, and perhaps seeks to place the fuel ‘crisis’ into a wider perspective, he could do worse than making energy policy a major public talking point.
Intermittent wind
I have written before about how I enjoy chairing external conferences. It’s on the very short list of things at which I seem reasonable adept and it brings in useful income to the RSA. But best of all it provides a quick and easy way way of getting to know a subject, its experts and practitioners.
I am writing this post between sessions of the annual conference of Scottish Renewables having arrived last night for the pre-conference dinner featuring Scottish First Minister Alex Salmond. Already, I have had my eyes opened.
The renewables sector is in fine fettle. It has for some years benefitted from the renewables obligation framework put in place by the last UK Government. It has also been inspired by the announcement by Alex Salmond at last year’s same conference of a renewables target of the equivalent of 100% of Scottish electricity demand being from renewable sources by 2020 alongside the goal of a 30% of all energy (including heat and transport). This will mean roughly a trebling of the existing 4200 megawatts. It’s a challenge which everyone here seems confident the sector will reach, indeed much more than the additional capacity needed is already at some stage of development.
Among the other oft-repeated facts: the costs of wind power are coming down steadily, Scotland now boasts the majority of all global research on wind and tidal energy, last week saw the Spanish firm Gamesa announce a £125 million investment in offsite turbine production at Leith near Edinburgh and yesterday saw new research showing the sector is already providing over 11,000 jobs in Scotland.
As well as chairing today I have also been asked to make some closing comments. It is a tough gig and not just because it is the last session; I am not Scottish, not an energy expert and – as regular readers know – a bit of a misery.
As well as saying some complimentary things (I’d quite like to be asked back next year) I thought I would use my moment at the lectern to strike a cautionary note. As any reader of the Daily Mail, the Daily Telegraph, or observer of Coalition internal debates or Conservative back bench obsessions knows, the Scots’ enthusiasm for renewable energy (which here crosses party lines and includes most of the public) is far from universally shared in England. And, as Scottish Secretary of State Michael Moore emphasised this morning, in a dig at the nationalists, just as England relies on Scottish wind and seas to hit its renewables and carbon reduction targets, so Scotland relies on English politicians and consumers being willing to subsidise energy which is still more expensive that its fossil fuel based alternatives.
So I intend to flag up three perils of success. The first is believing your own propaganda. The Scottish renewables sector is so upbeat right now it may not feel it has to engage with the sometimes OTT attacks of its opponents. The fact that the most visible critic of wind power in Scotland is Donald Trump only adds to the danger of complacency. The sector needs to engage with the tougher and more robust critics and the genuinely difficult questions, particularly over cost. This is all the more important with rising concerns about energy bills and fuel poverty, and the impression that some of the countries that took the lead on renewable energy – like Spain – may be having second thoughts.
Relatedly, the sector must balance unity and a common voice to policy makers with a willingness to be be tough on practices which damage its reputation. If there are things going on in the name of expanding renewable energy which would be difficult for the public to accept, then the sector needs to tackle these before they become ammunition for critics. Two key issues are better community engagement about planning consent (where the sector is improving), and the level and distribution of income and profit (where there is much more needed to be done). The sector needs to see long term and substantial community gain not as an unwelcome burden for schemes but as intrinsic to the value proposition.
Third, there is a paradoxical danger that a sector which is underpinned by a social mission – reducing carbon emissions and securing supply – takes its case for granted. As Rebecca Willis and Nick Eyre explained in a well argued Green Alliance pamphlet last year low carbon energy supply can only ever be part of the solution to the issue of sustainability. Looking over recent decades, energy efficiency and declining demand have played a bigger role in reducing the carbon intensity of economic growth. This is likely to continue to be true. So to show that its environmental commitment is real and not just a rationale for raking in profit, the sector needs to be part of a broader green movement and support policies for sustainability in which the sector has no direct financial interest.
Sitting in Edinburgh things look good for renewables. But fast forward to an energy debate in a few years’ time. An English speaker is appealing to his domestic audience. ‘Why’ he asks ‘ are we paying a poll tax on our energy bills – a tax that hits the poorest hardest – in order to send money up to an independent Scotland, much of which is then repatriated to the overseas HQ of large energy companies lining the pockets among others of German investors (EON) and the French Government (EDF). It’s time to stop subsidising the Scots and making foreigners rich on our energy bills. It’s time for English clean coal (or nuclear, or simply imported gas)’. It may be crude, it may be disingenuous but I can hear the deafening applause.
The mood at this conference is proud, optimistic, and can-do. But sometimes when you feel strongest you are at your most vulnerable.
Come to think of it, this isn’t the most cheerful of messages. Maybe I shouldn’t get my hopes up for a repeat booking.
Oh no, not again
Marx famously said that history repeats itself; the first time as tragedy, the second time as farce. If so, what is the appropriate aphorism as yet another tawdry party funding scandal explodes onto our front pages: Party funding history repeats itself first time as tragedy, second time as farce, twenty fifth time as a badly translated repeat of On the Buses shown on a flickering black and white TV in a mini-cab office in Tajikistan?
All thinking politicians know what has to be done; worse, they know that sooner or later it will be done, yet they are too self-interested and craven to do it themselves. The deal which Tony Blair and David Cameron nearly did in the wake of the cash for honours allegations (but which was sabotaged by vested interest in the Labour Party) , the recommendations of the Phillips Inquiry in 2007, the Committee on Standards in Public Life last November; all came up with basically the same package:
* A cap on individual and corporate donations below the level at which it can credibly be claimed that money will buy influence
* This cap to apply to trade unions – which can continue to collect and pass on individual dues from their members but whose members must make a positive and explicit decision to donate to a political party.
* Some additional state funding plus incentives to the public to donate, most obviously offering the same tax breaks on political donations as are provided for charitable gifts.
There are important details to be agreed within this package. For example, the Conservatives, having lots of quite rich supporters, would prefer a £50k cap while Labour and the Lib Dems would prefer one slightly lower. But it is not the details which stop reform, it is the inadequacies of our political leaders.
The mainstream media also play a role by winding people up over an increase in public funding; ‘how’ they say ‘can taxpayers be expected to fund politicians when we don’t have enough money to pay for core public services like the care of older people?’ This is a facile argument: first, under existing arrangements the taxpayer already pays for a substantial proportion of the spending for opposition parties; second, the extra funds needed to enable parties to operate without big donations is trivial as a proportion of public spending; third, the public already has to pay for things which it finds distasteful – for example, food and other living costs for imprisoned violent criminals, redundancy payments and pensions for public sector workers who have had to resign on grounds of incompetence, health care for people who ignore medical advice and drink, smoke and eat buckets of chips.
We do all this as the price we pay for living in a reasonably free and decent society. Isn’t a party funding system which facilitates democratic engagement and makes corruption less likely also an important part of a healthy society?
It is shameful that we haven’t lanced the boil on party funding. Today Ed Miliband is having his fun but sooner or later he will be in the spotlight as a trade union leader tries publicly to blackmail him into one policy or another. When inevitably yet another scandal erupts, our politicians deserve all the opprobrium they receive.
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