Select Feedback I – Nick Clegg: How to Build a New Economy?

London, UK - 27th April 2010, 14:05 GMT

Dear ATCA Open & Philanthropia Friends

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

We are grateful to ATCA and The Philanthropia distinguished friends and colleagues for their excellent and overwhelming feedback in regard to Nick Clegg's submission "How to Build a New Economy? Given the large volume of messages, some of the feedback for the mi2g Intelligence Unit (mIU) and the ATCA Research and Analysis Wing (A-RAW) will be absorbed into future briefings. We have selected some key ‘open’ responses as observations and/or queries. See what you think!

. The Cameron-Clegg Coalition? - Bill Emmott;
. Excessive Bank Regulation - Malcolm Hayday;
. Budget Deficit and Nuclear Deterrent - Commodore Patrick Tyrrell;
. The Key Question is How to Scale - John Elkington; and
. Global Leadership in Sustainable Development - Prof Herbert Girardet.

Nick Clegg, Leader of the Liberal Democrats, UK

Dear DK and Friends

Re: The Cameron-Clegg Coalition?

I am a fan of Nick Clegg, though not of this particular message to ATCA, I must admit. If he seriously thinks ATCA members will be impressed by GBP 15 billion of savings against a budget deficit of GBP 180 billion, he is mistaken. And if he thinks "local enterprise funds and regional stock exchanges" are innovative financing techniques, he needs to read some financial history. I am also not sure what he means (if anything) by putting a greater value on equity rather than "tolerating" debt: if he proposes to alter the tax treatment of debt to shift the balance to equity, he should say so, but otherwise this statement is meaningless. All in all, a rather disappointing statement from Mr Clegg. But then this is an election campaign, I suppose, so one should not expect too much, even from an intelligent and well-informed person such as him.

My hope, for what it is worth, is for a Cameron-Clegg coalition, as I think a government whose parties have been supported by 60-70% of the voters will be more stable and more able to repair the public finances than would a Tory government with a narrow majority, supported only by 35% of so of the voters. I consider David Cameron to be a liberal Conservative, and Nick Clegg to be a conservative Liberal, so they would match each other well, and the combination would help to neutralise extreme elements in both parties. It ought also to bring electoral reform, which is long overdue in Britain given the fragmentation of our party system and the decline in popular vote for the two main parties. The stability of sterling even as this prospect becomes likelier given the opinion polls suggests that markets too are relaxed about a Cameron-Clegg outcome.

- Bill Emmott, Independent Writer and Consultant, Columnist for The Times, The Guardian, Corriere della Sera and various Japanese publications; Chairman, London Library; Chairman, Viewsflow; Formerly Editor-in-Chief, The Economist - London and Somerset, UK; presently in Milan, Italy

Re: Excessive Bank Regulation

I welcome Nick Clegg’s contribution and his reference to innovative financing mechanisms. As the Chief Executive of a small young bank that has won several awards for innovation in its short life to date, I would welcome clarification from the Lib Dems, and the other parties, as to how they will get the regulators in Basel, Brussels and London to understand that there is a different, social banking model that is open for business and can contribute to building a new, values based economy. There is a real risk that the weight of regulation designed quite properly to address the behaviour of some will stifle our model too.

- Malcolm Hayday, Chief Executive, Charity Bank - Kent, UK

Re: Budget Deficit and Nuclear Deterrent

There does appear to be a considerable mis-match between the actual size of the budget deficit and the reality of reducing it in any realistic and meaningful manner. Mr Clegg claims to have found GBP 15 bn of savings -- these tend to be "soft" savings and are all too frequently undeliverable within the timeframes required. If the Liberal Democrats, in common with the other two parties maintain the fiction that spending on the public sector, NHS, schools, social cohesion policies, we must be honest that taxes are going to have to rise. Whether this is a broadening of a 50% tax rate or an increase in VAT to 20 or even 22.5 percent, matters not -- we need an honest approach from at least one of the party contenders.

We are also faced with a reluctance of any of the parties to declare what their vision of the UK's place in the world -- are we going to be a "middle ranking power punching above its weight" or are we going to be an introspective EU member focused on the activity within Europe rather than globally? As a former submariner, who served on the Polaris boats, how is Mr Clegg going to deliver a cheaper nuclear deterrent after a number of options have been costed over the years and show that an assured nuclear deterrent can only be delivered by a submarine bourne missile system with preferably four hulls?

- Commodore Patrick Tyrrell, Chief Executive, Vale Atlantic Associates; Director, Armed Forces Communications & Electronics Association (AFCEA); Formerly with the Royal Navy - Cornwall, UK

Re: The Key Question is How to Scale?

I am reminded that when we founded SustainAbility way back in 1987, our tagline for many years was 'The Green Growth Company' -- inspired by the notion that the environmental and wider sustainability agendas will create some of the defining market opportunities of the twenty-first century. The latest report from the World Business Council for Sustainable Development, 'Vision 2050', talks about markets worth USD 3-10 trillion by 2050.

But, while I am impressed at the early momentum established by Nick Clegg and his team, welcome his pledge of GBP 3.1 bn and will once again vote Lib Dem next month, I feel very strongly that Britain has a fundamental problem when it comes to sustainability-related enterprise. And it is a problem brought home to me once again when I co-led a study mission of 19 founders and CEOs of UK cleantech companies to California, particularly Silicon Valley, earlier in the year.

Stripped to its essentials, our basic, recurrent problem is that we are not good at bringing new solutions -- cleantech or otherwise -- to scale. We invent things like railways, exporting them to countries like Switzerland and Argentina (or at least did so when the world was our market oyster), but end up with the Germans increasingly running ours! That's the new Europe - and I welcome many aspects of it, as I do the fact that Nick Clegg is able to speak a number of languages. But how do we as a nation learn to speak the language of scale? How do we recover our ambition to drive new industrial revolutions?

I was meant to be in Korea last week, speaking at the Business for Environment (B4E) summit, but Vulcan willed otherwise. I was disappointed on various fronts, but particularly because I wanted to talk to some of those behind the country's Green Economy strategy -- which operates against a time horizon out to 2070. Korea sees itself as a future hub of the global Green Economy.

Money isn't the main problem here, welcome though that GPB 3.1bn would be. Instead, as has often been argued, we need a more entrepreneurial, globally-oriented culture -- so, in my dreams, I imagine the Eden Project's Tim Smit as the UK's Minister for Green Enterprise -- within an evolving economic paradigm forcefully shaped by one of the greatest living Britons, James Lovelock.

QUESTION

My question to Nick Clegg and his colleagues is this: How can we ensure that we develop and sustain a vibrant, internationally significant Green Economy that doesn't simply gift-wrap our inventions and innovations and hand them over to others (as happened recently with the sale of Cadbury to Kraft) who DO know how to scale?

- John Elkington, Founder & Non-Executive Director, SustainAbility; Founding Partner & Director, Volans Ventures - London, UK

Re: Global Leadership in Sustainable Development

Building a new economy is, indeed, one of the great challenges for Britain. As the originator of the industrial revolution it vigorously set new parameters for economic development. It became a pioneer of economic globalisation. Using fossil fuels as an innovative yet non-renewable power source, Britain also became a pioneer of unsustainable development. Can it now become a global leader in sustainable development instead?

It is most encouraging to hear Mr Clegg say that he wish to ‘build a new economy, in which high-tech, low-carbon industries will be able to thrive’. The emphasis on regionalism is also very interesting. In every one of its local communities Britain is full of immense frustrated creative energy, and it is this enormous human capital that now needs to be given a chance to thrive.

What needs to be spelled out in much more plausible detail is how the reality of economic, financial and social globalisation, which has emerged in the last few decades, can be matched with a new regional ‘economic magnetism’ in which Britain’s regions can build resilient and sturdy economies which give people a sense of certainty and future confidence. Building a smart renewable energy infrastructure to, first and foremost, satisfy regional demand and to create hundreds of thousands of new local jobs is an obvious starting point. But will Mr Clegg and his party find the right language to make sure that such options are taken seriously by the electorate?

- Prof Herbert Girardet, Co-Founder and Director of Programmes, World Future Council; Recipient of UN Global 500 Award ‘for outstanding environmental achievements’; Senior adviser to the Dongtan Eco-City project on Chongming Island, Shanghai - London and West Country, UK; and Hamburg, Germany.

[ENDS]

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