Press Release: Conservative Manifesto a mixed bag for workers (minimum wage, housing and childcare)

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207 Commenting on the Conservatives' pledge to keep minimum wage earners out of income tax, Director of the Adam Smith Institute Dr Eamonn Butler said:

It’s been an absurd part of UK tax policy that people making the minimum wage have had their earnings taxed away. The Conservatives should be applauded for making a firm commitment to keep those on the minimum wage out of income tax, regardless of future rises to the minimum wage.

However, to truly take the lowest-paid out of tax, the Tories would do well to reevaluate the National Insurance threshold, which goes into the same revenue pot as income tax yet continues to sit far below the personal allowance threshold.

Commenting on the Conservatives' housing pledge, Dr Butler said:

The Tories are right to put the UK's housing crisis at the heart of their manifesto and to prioritise giving low-earners the opportunity to buy their own home. But a £1 billion fund for Brownfield regeneration won't come close to supplying Britain's needed, and missing, homes.

The only way to create long-term affordable housing is to liberalise the planning system and allow for millions of houses to be built where people actually want to live. Building on just 0.5% of the UK’s Green Belt , for example, would be enough to fulfil UK housing needs for the next decade (though building on 1% of England's Green Belt would fully fix Britain's housing market by bringing prices down as well creating supply).

Commenting on the Conservatives' childcare pledge, Head of Communications Kate Andrews said:

The cost of childcare is unaffordable for many families, but it's government funds that are perpetuating the distorted and expensive childcare market. Providing more childcare benefits will only exacerbate the problem.

Ofsted regulations around childcare are some of the harshest in Europe, and it’s those requirements, including stringent qualification requirements and low mandatory child-to-staff ratios, that have caused prices to skyrocket.

"The Tories' commitment to more childcare spending will probably just reenforce the vicious cycle of high costs; to truly tackle the price of childcare, the sector must be deregulated.

Notes to editors:

For more information, read ASI report "The Green Noose: An analysis of Green Belts and proposals for reform", which looks at the Green Belt’s impact on England’s housing shortage.

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

ASI comments on non-dom tax provisions feature in The Daily Telegraph

The Adam Smith Institute's comment on non-dom tax provisions was quoted in The Daily Telegraph:

However, experts have attacked the proposals, warning that scrapping the non-dom tax status could lead to an exodus of top talent from Britain and "put the UK's international reputation at risk".

The Adam Smith Institute has said the plans risked "cutting off the country's nose to spite its face", while Simon Walker, director general of the Institute of Directors, said: "There is a serious risk that large numbers of the international financial community, who have headquartered themselves in London at least in part because of our tax regime, will now exit the country."

Read the full article here.

ASI briefing paper “Non-Sense: Examining the arguments and rhetoric around non-dom tax provisions“debunks the oft-quoted claims being made by politicians about non-doms and highlights the potential financial risks associated with Labour’s proposed changes to the rules.

The paper explains how Miliband’s proposed changes to the tax rules could cut government revenue, drive away investors and risk hurting middle-income migrant workers registered as non-domiciled in the UK.

Kate Andrews's comments on compulsory voting feature in City AM

Head of Communications at the Adam Smith Institute, Kate Andrews, was quoted in City AM on a new poll that found the majority of Britons support compulsory voting:

"It's clear that Britons have a deep respect for the right to vote," said head communications at the libertarian Adam Smith Institute Kate Andrews. "But that right should never be conflated with a duty for individuals to actually take part in the voting process."

"Many argue that one could simply spoil their vote if voting were compulsory, but this does not take into account people who are choosing not to vote to protest government structure or the voting process. Indeed, not voting is the best, safest form of civil disobedience one can take part in," Andrews argued.

Read the full article here.

ASI briefing paper "Non-Sense" features in The Daily Telegraph

New ASI briefing paper "Non-Sense: Examining the arguments and rhetoric around non-dom tax provisions" features in The Daily Telegraph:

A promise by Labour leader Ed Miliband to scrap non-dom rules “risks cutting off the country’s nose to spite its face”, a think tank report has warned.

In a new paper entitled “Non-Sense”, the Adam Smith Institute laid out the case for preserving the non-dom system, under which some individuals living in the UK are exempt from paying tax on foreign income that is not brought into the country.

Ben Southwood, head of research at the ASI, said: "Cracking down on non-doms may sound nice but proposals that sound nice aren’t always good policy."

"Mr Miliband’s scheme risks making both the UK and the Treasury poorer and less fair."

Read the full article here.

The briefing paper "Non-Sense: Examining the arguments and rhetoric around non-dom tax provisions"debunks the oft-quoted claims being made by politicians about non-doms and highlights the potential financial risks associated with Labour’s proposed changes to the rules.

The paper explains how Miliband’s proposed changes to the tax rules could cut government revenue, drive away investors and risk hurting middle-income migrant workers registered as non-domiciled in the UK.

ASI briefing paper "Non-Sense" features in City AM

New ASI briefing paper “Non-Sense: Examining the arguments and rhetoric around non-dom tax provisions” features in City AM:

Ed Miliband's reform to the non-dom system ignores all the evidence, risks costing the country money and could make the UK less attractive to entrepreneurs.

That's the verdict of a new briefing paper from the Adam Smith Institute that aims to separate fact from fiction when it comes to the political rhetoric surrounding non-doms.

In a speech at the University of Warwick on Wednesday, the Labour leader claimed there were around 116,000 non-doms in the UK. According to the ASI, that isn't the whole story.

The 116,000 figure accounts for those people who filed a self-assessment form and ticked the non-dom box. However, the ASI reckons there are around  one million students and workers in the UK who don't have indefinite leave to remain in the country and are therefore, by definition, non-domiciled.

Read the full article here.

The briefing paper “Non-Sense: Examining the arguments and rhetoric around non-dom tax provisions“debunks the oft-quoted claims being made by politicians about non-doms and highlights the potential financial risks associated with Labour’s proposed changes to the rules.

The paper explains how Miliband’s proposed changes to the tax rules could cut government revenue, drive away investors and risk hurting middle-income migrant workers registered as non-domiciled in the UK.

Press Release: Political move to scrap non-doms ignores all the evidence, new paper argues

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207 Labour’s non-dom policies risk cutting off the country’s nose to spite its face:

• There may be over a million non-doms in the UK, contrary to Miliband’s claim that there are 116,000; most of them are not rich people but foreign workers and students.
• The UK’s non-dom system is not unique; countries like Australia, Japan and China all have tax systems that focus on local income for non-permanent residents.
• The existing crackdowns on non-doms introduced by Labour (and supported by the Tories) have ended up particularly hurting less well-off non-doms (e.g. migrant doctors) while hitting the super-rich comparatively less.

A new briefing paper from the Adam Smith Institute debunks the oft-quoted claims being made by politicians about non-doms and highlights the potential financial risks associated with Labour’s proposed changes to the rules.

The paper “Non-Sense: examining the arguments and rhetoric around non-dom tax provisions” explains how Miliband’s proposed changes to the tax rules could cut government revenue, drive away investors and risk hurting middle-income migrant workers registered as non-domiciled in the UK.

The paper argues that recent reforms to non-dom tax laws, whereby one has to pay £30k after seven years of residence in order to be taxed on the remittance basis, has ended up hurting relatively less wealthy non-doms and has done very little to the very wealthy ones.

The further changes proposed by Miliband could push Britons to become ‘domiciles’ more quickly in other countries and deprive the UK the inheritance tax such people would have paid had they been domiciled in Britain. These changes would also affect many other parts of the law, such as family law, which depend on domicile status; such changes would have far-reaching implications, such as disputes over guardianship of children.

The paper explains that the status of non-dom is affiliated with any person who does not intend to remain in the UK indefinitely. International hedge fund managers, transfer students from Kenya, and Indian doctors working for the NHS are all considered non-doms. Potentially there are over one million non-doms residing in the UK, not 116,000 as Miliband claims. Most of these residents are not wealthy, but rather normal earners and students.

It is also not the case that the UK’s non-dom system is virtually unique in the world. Several former British colonies have exactly the same system as the UK, for example Ireland, Malta and Jamaica. Other countries such as Australia, China and Japan tax only local income for non-permanent residences as well.

Head of Research at the Adam Smith Institute Ben Southwood said:

Cracking down on non-doms may sound nice but proposals that sound nice aren’t always good policy.

Miliband’s scheme risks making both the UK and the Treasury poorer and less fair.

Scrapping non-dom status does make it easier for the Treasury to claw in the foreign earnings of people who intend to stay in the UK temporarily, but it also makes it harder for them to keep a hold on Brits who leave intending to come back.

Thankfully policymakers are not so easily swayed and MPs are often effective gatekeepers to populist wheezes - there is at least a chance this one will be stopped as well.

Notes to editors:

Read “Non-Sense: examining the arguments and rhetoric around non-dom tax provisions” here.

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

Kate Andrews discusses pension reforms on Sky News

Head of Communications at the Adam Smith Institute Kate Andrews spoke to Sky News about the new pension reforms that give more freedom to savers and allow pensioners to sell their annuities.

Sam Bowmans appears as guest on ITV's O'Brien show to discuss A&E pressures and drug legalisation

Deputy Director of the Adam Smith Institute Sam Bowman appeared as a guest on ITV's O'Brien show to discuss the pressures on A&E services as well as the merits of drug legalisation in the UK. Watch the clips here.

Clip on A&E services begins 21:08.

Clip on drug legalisation begins at 43:20.

ASI briefing paper "The Ties that Bind" features in Yorkshire Post article and editorial

New ASI briefing paper " " features a Yorkshire Post article as well as today's editorial. Article:

Increasing levels of racial diversity driven by immigration to British cities have very little negative impact on social cohesion, according to a repot which appears to contradict claims that migration undermines the country’s social fabric. 

The Adam Smith Institute concluded that higher levels of diversity can have a slightly negative impact on trust levels - but when it comes to other measures of social cohesion, including civic participation and volunteer work, there is virtually no evidence to suggest a negative effect.

The Institute reviewed literature on the subject which looked at communities in the United States, Europe and the UK. It found that if other factors are accounted for - including economic deprivation - the negative relationship between diversity and cohesion often disappears.

While research from the States found a clear negative relationship between immigration and social cohesion, research in Europe found no negative impacts.

Research in London had found that once economic deprivation is controlled, higher levels of ethnic diversity actually have a positive effect on social cohesion.

The research appears to contradict claims that immigration must be restricted as it undermines the country’s social fabric. The paper does comment on Bradford or other Northern cities which saw disorder in 2001.

Continued p. 2, Yorkshire Post.

Editorial:

Coincidentally, Sir Keith’s comments come on the day that the Adam Smith Institute claimed that greater ethnic diversity in the UK has not had a negative impact on community cohesion. This refutes Mr Farage’s alarmist assertion that children can no longer play football in the streets of some towns because of concerns about immigration. The think-tank also takes Ukip to task for claiming that migrant workers are taking the jobs of people born in Britain; it says immigrants contribute more to Britain’s debt-laden finances than they take out in benefits.

It is a compelling argument which should be heard before any post-election caps or quotas have a counter-productive effect on the economy. The problem for the country’s political elite is that they find themselves in the unenviable position where Mr Farage’s party is making all the running on this issue.

Read the full comment here.

The paper, “The Ties that Bind: An analysis of the relationship between social cohesion, diversity, and immigration”, is a comprehensive review of the academic literature on the relationship between immigration and social cohesion in the Europe, the UK and the United States.

It concludes that higher levels of diversity only lead to a slight negative impact on generalized trust within UK communities; however, there is virtually no evidence to suggest that diversity undermines other measures of social cohesion, including civic participation, trust in authority and volunteer work in the UK. Furthermore, the paper finds that if other factors are controlled for – including neighborhood status and economic deprivation – the negative relationship between diversity and cohesion often disappears.

Mythbusting Nigel Farage on immigration - Ben Southwood highlights ASI report in CityAM

Head of Research Ben Southwood writes for CityAM on new ASI briefing paper “The Ties that Bind: Analysing the relationship between social cohesion, diversity and immigration”:

The political scientist Robert Putnam famously found that Americans “hunker down” in the face of social diversity, doing less in the community and trusting people less – even their own compatriots.

When Nigel Farage suggested that one reason kids tend not to play on the street nowadays was immigration, he was voicing a common concern: that immigrants undermine social trust and social cohesion.

Trust and social cohesion are important on more than just one level – they are a crucial correlate of output, living standards and growth. If immigration did undermine trust, it would be a major argument against it. But it’s not clear that the data can support this objection, whatever people’s anecdotal experience might seem to show.

A new Adam Smith Institute briefing paper out today “The Ties that Bind: An analysis of the relationship between social cohesion, diversity, and immigration” looks broadly to see if Putnam’s result is held up by the wider research. There is some (albeit conflicting) evidence that immigration and diversity undermine generalised trust – how much people in society trust other random people in society.

Read the full op-ed here.

The paper, “The Ties that Bind: An analysis of the relationship between social cohesion, diversity, and immigration”, is a comprehensive review of the academic literature on the relationship between immigration and social cohesion in the Europe, the UK and the United States.

It concludes that higher levels of diversity only lead to a slight negative impact on generalized trust within UK communities; however, there is virtually no evidence to suggest that diversity undermines other measures of social cohesion, including civic participation, trust in authority and volunteer work in the UK. Furthermore, the paper finds that if other factors are controlled for – including neighborhood status and economic deprivation – the negative relationship between diversity and cohesion often disappears.