British Prime Minister Margaret Thatcher was one of the most radical Western leaders of the 20th century. Today’s prime minister, Theresa May, seems set to be one of the most radical of the 21st.
The revolutionary May approach can be seen in her plan this week to develop Britain’s shale gas, which for a decade has been stymied both by opposition from local residents, who have been fearful that their environment would be contaminated, and from environmental groups who have stoked those fears. May is breaking this impasse by giving the residents a startling upside to shale gas development.
Under May’s approach, shale gas royalties that would ordinarily go to governments and quasi-governmental agencies will instead be directed to the residents in the communities hosting the developments. The BBC estimates individual households will be receiving as much as £10,000 ($16,800) under May’s plan; other estimates arrive at higher sums – as much as £65,000 per household lucky enough to be near large shale gas deposits. May’s plan is now expected to wash away local opposition to fracking and unleash the development of Britain’s massive shale gas resources, estimated by the British Geological Survey at 1,300 trillion cubic feet of shale gas, equivalent to a 500-year supply at current gas consumption levels.
This torrent of energy will benefit more than the local residents who until now saw only drawbacks to shale gas development in their community. The abundant supply of gas will lower energy costs throughout the country, relieving residential and business consumers alike and convincing British industries – which have been leaving Britain due to its high energy costs – to not only stay but also to expand their operations in the U.K.
The May approach isn’t limited to shale – it will apply to developments of all kinds, whether other resource developments, industrial complexes or airport expansions. Through what she calls her blueprint for development projects, May will be converting the development delayer known worldwide as NIMBY (Not In My Back Yard) into PIMBY (Please In My Back Yard), a development accelerator. Residents will effectively become pro-development lobbyists whenever they determine a development personally benefits more than discomforts them.
Fundamentally, May’s PIMBY initiative is ideological – it is a method of curbing local governments and quasi-government organizations called community trusts by putting power in the hands of the people. In the case of shale deposits, the royalties that the shale gas companies will be sending to households, to do with as they wish, won’t be going to governmental bodies that will do for the residents what the governmental bodies wish.
To see how this can play out in practice, consider the Hillingdon Community Trust, which receives £1 million each year for 15 years from Heathrow Airport Limited – part of the price that the airport needed to pay for permission to build a new terminal. Hillingdon’s mandate is to benefit residents of six wards located near Heathrow, as compensation for inconveniences they suffer. The benefits dispensed by Hillingdon Community Trust – in effect, another layer of government, complete with its own patronage-selected trustees and staff – go to favoured NGOs tasked with purposes such as the “improvement of the environment,” the “advancement of education, training or retraining” and the “promotion of wellbeing through the provision of assistance in the provision of recreational facilities.”
Some residents of those wards have doubtless benefited from Hillingdon’s largesse but all would have benefitted if, instead of setting up this trust, cheques went directly into the bank accounts of residents.
The May Revolution also promises to roll back the ability of local governments to grow willy-nilly through the Community Infrastructure Levy, a 2008 law – similar in function to development charges common in Canada and the U.S. – that allows local government shake-downs of just about any kind of development. In future, a share of the revenues raised through these levies will also go straight into residents’ pocket books, tempering the growth of governments, giving the public an incentive to fast-track developments and giving the developers more leverage in countering municipal planners. Planners often try to limit the height of buildings, for example, on the claim they are surrogates for the local community. Once the local community stands to benefit directly from taller buildings, it won’t need these planners as surrogates – the community will judge for itself when it fancies taller buildings, and the fatter payments that would accompany them.
In presenting her radical departure of making direct payments to households, and empowering ordinary people rather than elites, May stated: “This announcement is an example of putting those principles into action. It’s about making sure people personally benefit from economic decisions that are taken – not just councils – and putting them back in control over their lives.”
When Thatcher introduced her reforms during her 11 years in power a generation ago, she not only changed the face of the U.K., her privatizations and free market innovations were emulated around the world. May has signaled that she has more innovations of her own to introduce. At this point, she has been prime minister for just under one month.
