Press Release: Miliband's zero-hours contact ban threatens UK labour market

For Immediate Release | For further comments or to arrange an interview, contact Charlotte Bowyer at charlotte@adamsmith.org / 07584 778 207 Commenting on Ed Miliband's banning of zero-hours contracts, Director of the Adam Smith Institute, Dr Eamonn Butler, said:

Forcing firms to give employees a regular contract after 12 weeks is effectively abolishing zero hours contracts for 90% of the 1.8m on them, and it would harm the very people it is intended to help.

The UK's economic success is founded on labour market flexibility, and politicians need to be very careful before messing with it.

About two thirds of people on zero-hours contracts are happy with the hours they get—limiting the contracts they can sign hamstrings not just the firms that employ them but their own employment options.

On top of this, we'd expect this labour market straitjacket to cut, rather than boost, productivity. The UK's productivity troubles are real, but they're also so hard to diagnose that the issue is known as the 'productivity puzzle'.

The UK's labour market flexibility is the key reason we have been able to weather such a sharp recession and slow recovery while nevertheless hitting the highest ever employment level and rate. Chipping away at this is dangerous and counterproductive."

For further comments or to arrange an interview, contact Charlotte Bowyer at charlotte@adamsmith.org / 07584 778 207

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

ASI report "The Green Noose" features in The Times

ASI report The Green Noose: An analysis of Green Belts and proposals for reformfeatures in The Times.

The Adam Smith Institute, a free-market think-tank, argued in a report in January that two million homes could be built on green belt land, much of which was not worth protecting because it was used for intensive farming.

Entitled The Green Noose, the report said restrictions on building in green belts pushed development into dormitory towns, increasing pollution from transport because people had to travel further to work.

Read the full article here.

The new ASI report, The Green Noose: An analysis of Green Belts and proposals for reform, looks at the Green Belt’s impact on England’s housing shortage. After a comprehensive review of the causes of the housing crisis, it concludes that the planning structure is out of date and in need of radical reform.

Author of ASI paper “The Green Noose” argues for rolling back the Green Belt on BBC Radio Oxford

Senior Fellow at the Adam Smith Institute and author of “The Green Noose: An analysis of Green Belts and proposals for reform”, Tom Papworth, spoke to BBC Radio Oxford about the benefits of rolling back the green belt to make room for the millions of homes needed to solve the UK's housing crisis. Listen to the interview here. (Starts 02:09:38)

The ASI report, The Green Noose: An analysis of Green Belts and proposals for reform, looks at the Green Belt’s impact on England’s housing shortage. After a comprehensive review of the causes of the housing crisis, it concludes that the planning structure is out of date and in need of radical reform.

Kate Andrews questions Burnham, Hunt, and Lamb on their plans for NHS reform on Channel 4 News

Head of Communications at the Adam Smith Institute Kate Andrews appeared on Channel 4 News to ask Health Secretary Jeremy Hunt MP, Shadow Health Secretary Andy Burnham MP, Norman Lamb MP and Dr Mark Hanson if they would consider making reforms to the NHS that have been proven throughout Europe to improve patient outcomes and shorten waiting lists. Watch the full clip here. (Starts 6:14)

Sam Bowman discusses Labour's pledge not to raise VAT on Bloomberg TV

Deputy Director of the ASI Sam Bowman spoke to Bloomberg TV about Labour's pledge to not raise VAT and discussed which taxes are most efficient and reduce tax burdens on the poor. Watch the full interview here.

Press Release: This is good disinflation – but it shows the need for a new BoE target

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207 Commenting on today's inflation figures, Head of Research at the Adam Smith Institute Ben Southwood said:

Most of the fall in CPI inflation is coming from 'supply-side' shocks like cheaper oil and food—this is good and makes everyone better off.

When inflation falls below target due to these supply-side improvements, the Bank of England should 'look through' the drop, like they looked through the continually above-target inflation of 2009-14.

The real problem is that the Bank's target requires it to constantly make judgement calls about whether inflation shocks are demand- or supply-side. What's more, since it 'lets bygones be bygones' and ignores past overshooting or undershooting of its target, this really matters.

The Bank should consider changing its macroeconomic target.

If it targeted nominal GDP (i.e. total spending) instead of inflation, it would automatically ignore dips in inflation from supply shocks and automatically fight dips in inflation from demand shocks.

If it targeted the level of nominal GDP (or just the price level) it would automatically make up for past overshooting or undershooting, so firms, consumers and financial markets can be absolutely sure about where prices or nominal GDP will be at a given point in the future.

The Adam Smith Institute is an independent free market think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Would Greece flounder if it left the Eurozone? Sam Bowman argues NO in CityAM

Deputy Director of the ASI Sam Bowman took part in the CityAM Forum debate arguing that Greece would not necessarily flounder if it left the Eurozone.

A Greek Eurozone exit would throw the country’s banks into crisis, but it may still be its least-worst option. The European Central Bank has kept money tight across the Eurozone since 2008, but this has been most acute in Greece, where nominal spending collapsed during the financial crisis and has barely recovered since. This means that wages have had to fall in cash terms across the board for employment to recover, and they still have a long way to go. This process takes an excruciatingly long time because firms tend to prefer to fire some workers instead of cutting all their staff’s wages. That means many more years – perhaps more than a decade – of high unemployment. If Greece left the euro it could get around this process by devaluing its currency, as it and the other southern European states used to do before the euro. It would be very painful in the short term, but that may be preferable to the long-term depression that the country now faces.

Read the full article here.

Kate Andrews gives Budget reaction on Sky News

Head of Communications at the Adam Smith Institute Kate Andrews discussed Wednesday's Budget and what the Chancellor should have included on Sky News.

What the Budget means for politics - Sam Bowman writes for Economia

Deputy Director of the Adam Smith Institute Sam Bowman gives a Budget round-up for Economia:

There was very little in this Budget to get excited about, either positively or negatively. Against a backdrop of astonishingly high employment and a strongly growing economy was a Budget filled with tiny little giveaways to worthy, but inconsequential, causes like the church roof repair fund. Instead of the big cuts to inheritance tax that many had hoped for, the chancellor fiddled while the economy boomed.

Employment is now at both the highest level and the highest rate since records began. Since 2010, 80% of the new jobs created are full time, and wages are finally now beginning to rise above inflation. The country is growing at a decent clip and is projected to continue growing at just under 2.5% annually until 2020 at least.

The main fly in the ointment here, as it has been for years, is productivity, which is still very weak. One reason for this may be that business investment is still very low compared to its pre-crisis level; other than cutting taxes on capital (thus boosting investment) there seems to be little the government can cost-effectively do to help this.

Read the full article here.

The ASI's Budget reaction features in The Telegraph

The ASI's Budget reaction features in The Telegraph:

Sam Bowman, deputy director of the Adam Smith Institute, said: "Raising the personal allowance will leave more money in full-time workers’ pockets, and is a good tax cut for people on low and middle incomes."

Read the full article here.