Monday, 14th September 2009

The Adam Smith Institute gives the next government a “shopping list” of policies needed to rescue Britain. In a report “Zero Base Policy“, released today, the Institute’s President, Dr Madsen Pirie, says minor change to existing policies is no longer an option, given Britain’s dire economic and social fabric. Instead the need is for “zero base” policies to provide new and effective ways of achieving policy objectives.

Topping the agenda is economic change. The ASI sets out measures to turn Britain from a high tax, high debt economy into one on the virtuous circle of low taxes and increasing growth and revenues. The ASI calls for rejection of the Treasury’s ‘static’ model of the economy in favour of a ‘dynamic’ one which factors in the growth impact of lower taxes.

The ASI proposes to lift the low paid out of income tax by raising its starting threshold to £12,000 p.a., corresponding to the minimum wage, or about half the average wage. This eliminates the need for vast welfare transfers to low earners by letting them instead keep what they earn. At the top end the ASI proposes to expand the tax base by successively raising the threshold for the 40% rate until no-one pays it.

They propose overhauling local finance, replacing Council Tax by local sales taxes as in the USA, and setting business rates locally. A radical innovation is their call for local budgets to require popular vote approval before coming into effect.

Civil liberties are to be addressed by the ASI’s call for a one-year judicial commission to review them and make recommendations. Meanwhile the ASI report calls for public body CCTV surveillance to be limited to police and security services, and for anti-terror powers to be restricted to cases of suspected terrorism.

Controversially, Dr Pirie describes government policy on drugs as a failure, and calls for a total rethink, under which most narcotics would be made available at medical centres, and the production and sale of recreational drugs legalized under controlled conditions.

The ASI sees the biggest opportunity for reform in education, and calls for parents to be permitted to use their child’s education allowance at any school which is non-selective and requires no additional top-up fees.

Regulation is to be addressed by the use of ‘sunset’ clauses under which regulations expire unless specifically renewed, and for regulation to be implemented by case law, with the findings of tribunals and juries filling in the details of broad statutes.

The shopping list contains 33 radical objectives which it calls upon the next government to pursue, including the abolition of regional tiers of government and agencies, and the phasing out of most capital taxes. It closes with a call for the MPs representing English constituencies to be constituted in Westminster as the English Parliament, with powers similar to those enjoyed by the Scottish Assembly.

“The list,” says Dr Pirie, “sets out the objectives which could turn Britain around. While they could not all be implemented within a single term, they should constitute the goals to be aimed at.”

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