Natural Capital is Economic Capital

n his book ‘The North of England - A History from Roman times to the Present’ Frank Musgrove wrote ‘There have been four periods of particular northern distinction, importance and power....the First spanned the third century AD.... the second was the spectacular ‘Age of Bede’....the third was the military age of the Neviles and Percies from the mid fourteenth to the late fifteenth centuries....the fourth period....was the age of the Industrial Revolution’. This last was recognised by Lord Macaulay (Trinity 1818-1825) who in 1848 pointed out that ‘the regions north of the Trent possessed in their coal beds a source of wealth more precious than the gold mines of Peru’ Since the death of King Coal the economic pendulum has swung south again creating calls for Levelling Up which have generated so much heat and not so much light.

Looking at the Northern economic landscape from a Cumbrian perspective, where I chair the Local Enterprise Partnership, there is not much coal now - indeed there never was that much in comparison with other parts of the North. If one of the sources of regional wealth is identified as raw materials there might not seem to be all that much. But is that really right? I am going to suggest not, and that much of the problem is not the absence of economically important raw materials, but that their value has been expropriated in the past, and that it may be about to happen again.

It is well known that in the later Nineteenth and Twentieth Centuries those parts of the country which had plentiful water were used as header tanks for the water supplies of our great cities. While the environmental and associated aspects are still controversial it is no part of my argument to criticise the underlying idea. Rather the criticism is that it has been expropriated and not paid for. Every time a WC is flushed in Manchester it is done with Cumbrian water. Such places cannot exist without it. To go back to Lord Macaulay and the coal beds, that water is their foundation and the sine qua non of their existence. The water’s economic value is enormous, but its price to those who use it hardly begins to recognise the fact.

To come forward to the present day the Lake District is a World Heritage Site, England’s premier National Park, and one of the country’s glories, as well as being an essential component of the country’s economically important Visitor Economy. While those directly employed in that sector derive a livelihood from it, those who look after the land, which is what the visitors actually come to enjoy, principally live on crumbs falling from the agricultural table. DEFRA’s principal purpose sometimes appears to be to ensure upland farmers live at or near the level of the minimum wage and that our local communities are socially eviscerated by second homes, which makes recruiting local labour well-nigh impossible in some instances. Again the contribution to the nation as a whole is not recognised in the rewards for doing the work. Looking after this and similar places is as much a commercial output from a farm and for a land manager as meat and grain. What matters is the commercial value of what is done rather than the cost of doing it as is the general case in the rest of the in what we call the marketplace.

Perhaps, however, the most egregious example of this approach may be the way it appears Natural Capital is going to be treated. But first we need to note the fact that for years the economically poorer parts of the country have been clearing up emissions emanating from wealth creation elsewhere, like the man with the shovel at the back of the cavalcade. They have received very little proper economic recognition for it. Despite the Levelling Up Agenda Whitehall seems to be ignoring this.

If trees and peat absorb CO2, then those currently alive will be doing so, as much as those not yet planted or established. Despite this, policy appears to be primarily focussed on rewarding those who plant trees and restore peat bogs in the future, which is, of course a good thing and needs encouragement. At the same time those who are now doing it and have done so for years appear to be being overlooked. Carbon clean-up is a commercial output which requires proper recognition and the polluter should pay, not the person doing the cleaning up.

Secondly there is evidence of large commercial businesses buying up land for planting in the future as a kind of land bank. I would if I were they, it makes sense from their perspective. What is needed now is a proper mechanism for places like Cumbria and those already living and working there to be able sustainably to exploit these possibilities and markets on an ongoing basis, rather than introducing neo colonial owners and operators from elsewhere who will expatriate the value created to other places. Now it is probably more di cult and complicated to do this rather than simply allow a crude and oversimplified model of the market to drive these things. But if it can be done - and it isn’t all that di cult to do if there is a will - it would provide an enormous fillip to the Northern Rural Economy, which the Levelling Up Agenda appears conspicuously to ignore.

The Northern countryside is blessed with plentiful natural resources (Water, Landscape, and Natural Capital), each of which has similar economic characteristics to minerals. Policy made in London is stopping this happening thereby leading to the well-known economic and social problems the Levelling Up Agenda is intended to address. Just as culture is now becoming recognised as having a real economic value which should be rewarded properly, so too should Natural Capital, Landscape and the Environment in just the same way.