Planet Online - Roads to Prosperity

“Predict and Provide”

15.07.09
In the late 1980s, the UK government published Roads to Prosperity, a document which argued that in order to foster economic growth, the rising demand for car travel would require a new roads network. In the early 1990s, against a background of protests against the Newbury bypass and the M11 link road in East London, the problem with this strategy became evident. The perception, however, that there was no alternative to building our way into the future was strongly embedded in government, as was made clear by the then Transport Secretary Cecil Parkinson in 1990, arguing in a conference speech that “there is no option but to build more roads unless we change our aspirations”.

During the 1990s the Roads to Prosperity approach became the subject of extensive critique, and became increasingly referred to as “predict and provide”, or P&P for short. What P&P assumes is that demand, as an aggregate expression of peoples’ free consumer choices, is the best indicator of future needs. Demand is therefore effectively assumed to be a “natural” factor which is entirely outside policy control. Its privileged status reflects the sanctity typically accorded by governments to individual acts of consumption. Meeting future demand appears to be both a means to a social good (as it increases the level of economic activity in a society) and also intrinsically good (because it reflects the value of individual autonomy in the market). If what is demanded is important enough (e.g. energy infrastructure or road capacity), then it follows that meeting such demands is a matter of national interest. Hence the Thatcher government’s decision to embark on the “biggest road-building programme since the Romans”, regardless of the environmental and health effects for local people, which could – against the role of more roads in fostering economic growth and the “right to drive” – easily be discounted.

Since New Labour’s election victory in 1997, the persistence of this approach in Whitehall and further afield has shown few signs of being genuinely challenged. Its continuing influence has particular significance in a post-devolution UK, in which the commitments of the devolved administrations to sustainable development – that is, to a future in which unconstrained growth is not the standard by which the public good is measured – are in direct conflict with the assumptions behind P&P. Two examples follow of how we are still very much saddled with the legacy of P&P.

LNG in South Wales

The construction, from 2005 to the present day, of two liquefied natural gas (LNG) terminals at Milford Haven, together with a 122-mile long pipeline across south Wales to connect them to the gas grid in Gloucestershire, was a clear matter of national interest. This much the UK Government, the Welsh Assembly, National Grid (responsible the pipeline), the terminal operators and the BBC were in agreement on. At stake was the UK’s energy security, viewed against diminishing North Sea supplies and what politicians depicted as the unreliability of Russian supplies. Over the next 10-15 years, we should (according to National Grid’s forecasts) look forward to a substantial growth in demand for gas, coupled with an increasing dependence on imports. Who could argue that such a future would not require more import infrastructure in order to keep the lights on? In case anyone should dissent, however, it was often pointed out that meeting demand for gas would also provide wider economic benefits in Wales.

Expanding Heathrow

When it elected to support the building of a third runway at Heathrow earlier this year, the UK Government based its decision on a set of projections of future passenger demand. Like those used by National Grid, these relied on two steps.

First, take existing trends in passenger demand and extrapolate from these a future in which, all other things being equal, past growth trends continue unabated. Second, apply sensitivity tests by modifying projections in the light of the likely real-world effects on demand of other relevant variables. Demand is, for example, assumed to be dependent on the cost of oil, rises in flight taxes, and so on. Given that the likely values of these variables are all subject to uncertainty, a set of low, median and high values are typically used. These different values are treated as representative of different real future scenarios. 

Making different futures

What P&P cannot do without – as is evident in both of these examples – is the assumption that the future will, in its essential characteristics, still be “business as usual”. However, the future often turns out to be anything but.

For a start, what if economic variables are subject to tipping points? For example, the Heathrow forecasts assumed that, at worst, oil prices would only reach $136 a barrel by 2030. Should peak oil be reached within the next twenty years (something which even the conservative pundits at the International Energy Authority are looking at), our future may be one in which the price of oil might be between $200-400 a barrel. Similarly, if a race for a fossil fuel with lower CO2 emissions – like natural gas – leads to a worldwide surge in LNG demand, countries which are unable to pay the resulting high prices may see their levels of demand shrink.

Such tipping points can be located outside economic relationships as well. The potential effects of increasing global temperatures on demand were, for instance, not incorporated into the forecasts on which NG relied, mainly because of methodological difficulties.  Similarly, the effects of major changes of political direction are typically left out. If, for example, an international agreement on mitigating climate change were to be reached which requires swingeing cuts in CO2 emissions – or if that is too pie-in-the-sky for you, suppose the UK Government decided to include emissions from aviation within its estimates of its total greenhouse gas emissions – the consequences for the justifications behind the Government’s decision on Heathrow decision would be anything but insignificant.  

The problem is that much of the debate over the acceptability of LNG in south Wales and the acceptability of a new runway at Heathrow concerns precisely the necessity of political change, and indeed (in Cecil Parkinson’s phrase) how to “change our aspirations”. It is motivated by the democratic need to define, explicitly and transparently, the purposes to which public policy should be put. But so long as the assumptions of P&P determine how policy decisions are taken, such a need will remain difficult to fulfil.

Chris Groves