Member

That leads us to the Minister’s central claim that mandation is necessary to solve a collective action problem—that while the sector recognises the case for higher return investments, no individual scheme is willing to move first. Now, that is a serious argument, but mandation is the wrong conclusion. He says that industry agrees with him on mandation, but that is not the case. The industry agrees with the diagnosis—the problem I have just set out—not his solution. A collective action problem is not in itself a justification for state compulsion. It is a signal that incentives are misaligned, and when incentives are misaligned, the answer is not to override the system but to fix it, to make it rational to be the first mover or an early adopter.