Government urgently needs a National Security Council for resources

Monday 2 March 2015
Jonny Hazell Jonny HazellSenior policy adviser020 7630 4529jhazell@green-alliance.org.uk
‚Äč
A new report from the Circular Economy Task Force,[1] convened by think tank Green Alliance,[2] highlights the risks posed to British business interests by current government management of resource policy. It proposes a National Resources Council to strengthen the government’s ability to respond strategically to resource supply threats and help businesses boost their competitiveness through increased productivity.

The UK is lagging behind on action to improve resource security and productivity compared to other leading industrialised nations, like the US, Germany and China. There has been no comprehensive review of the UK’s exposure to resource risks and different government departments are pulling in different directions on resource policy – as demonstrated by the Department for Communities and Local Government’s (CLG) support for weekly rubbish collections, undermining the Department for Environment, Food and Rural Affairs’ (Defra) efforts to reach a 50 per cent recycling target.

The report highlights the risks to businesses and analyses the pros and cons of six potential new institutional arrangements for the UK to address the problem, including the possible creation of an Office of Resource Management or a new Department for Natural Resources.

But, it concludes that a new National Resources Council, modelled on the National Security Council, would best help to channel political concern about resource risks into clear cross-government action.
It proposes that an immediate priority for the council should be to commission a major review of resource risks to the UK. This would determine where vital gaps in knowledge exist and would develop the framework for future action.

In the 21st century, the UK must overcome some serious challenges to stay competitive and meet demand for resources:

- Resource price volatility is at a historic high: between 2005 and 2012 volatility was three times the 1980-2004 average[4] and resource costs typically account for 40 per cent of European manufacturers’ total cost base. High food and energy prices contributed to falling real wages between 2010 and 2014[5], whilst the recent oil price crash has led to redundancies in both North Sea extraction and recycled plastics suppliers.

- Global competition for resources is rising: demand for metals is expected to increase 250 per cent between 2005 and 2030, and cereals consumption is expected to rise from 1.9 billion tonnes in 2000 to 2.7 billion in 2030, an increase of over 40 per cent[6]

- Environmental limits rule out simply expanding supply: research by ASDA revealed that 95 per cent of its fresh produce supplies are at risk from climate change, largely driven by changes in water availability; and water crises were considered the third greatest risk in the 2014 Global Risks report from the World Economic Forum[7]

Jonny Hazell, author of the report, said:

“Calls for decisive political action on resources are growing. The next government must address the business and environmental risks of its out-dated resource policy. Political will has to be matched by effective governance capacity, and a new institution for resources within central government will signal that resource security is a political and economic priority for the UK.”

Tracey Rawling Church, UK director of brand and reputation, Kyocera Document Solutions said:

“The price volatility and inflation that will inevitably result from growing scarcity of key resources will have a damaging impact on UK business and the current strategy has not been effective in either protecting natural resources or retaining the value of materials in the economy. It’s clear that increased focus on this topic from government is essential, not just from an environmental point of view but also ensure economic resilience. Green Alliance’s proposal for a timely and practical intervention is commendable.”

Ray Georgeson, Chief Executive, Resource Association said:

“Disjointed and sometimes contradictory approaches to waste and resources from different Government departments creates confusion and uncertainty for local authorities, resource management companies and investors alike. The report is a crucial contribution to the growing debate about governance and better co-ordination of resources policy. It is a live debate, and it is clear that maintenance of the status quo is an unpalatable option for the UK resources industry and for our country’s resource security.”

Ends

Report author: Jonny Hazell, 020 7630 4529 jhazell@green-alliance.org.uk for interviews and more information about the report’s recommendations.

Notes

[1]The Circular Economy Task Force is a government endorsed, business led group convened by Green Alliance. It was set up via the UK’s Resource Security Action Plan sponsored by Defra and BIS, and is composed of Boots, Kyocera Document Solutions, the Resource Association, Sinvestec, Unilever, Veolia, Viridor, and WRAP. It is convened by Green Alliance.

[2] Green Alliance is a charity and independent think tank focused on ambitious leadership for the environment. Founded in 1979 “to inject an environmental perspective into the political life of Britain” we have been inspiring and influencing change for over 35 years. www.greenalliance.org.uk

[3] Analysis by Chatham House of the IMF’s summary indices of world prices from 1980 to 2012 from Chatham House, 2012, Resources Futures. www.resourcesfutures.org/downloads/CHJ204_Resources_Futures_WEB_28.01.13.pdf

[4] FAO and OECD projections cited in Chatham House, 2012, Resources Futures

[5] Bank of England figures cited in Matthew Whittaker, 17 February 2015 ‘Boom time for wages? How realistic is a doubling of wage growth by the end of the year’, www.resolutionfoundation.org/media/blog/boom-time-for-wages-how-realistic-is-a-doubling-ofwage-growth-by-the-end-of-the-year/

[6] Paul Kelly, 25 April 2014 ‘What to do when we run out of water’, Scientific American, www.scientificamerican.com/article/what-to-do-when-we-run-out-of-water/