10 February 2011
· The Adam Smith Institute’s latest report argues that 92% of the Forestry Commission’s land could be privatised without endangering valuable broadleaf forests.
· The Forestry Commission should act purely as a regulator to avoid any conflict of interest. It should not own or operate woodland.
According to a report released today (THURSDAY) by the Adam Smith Institute the government should be more ambitious in their plans to sell off the Forestry Commission’s land. 92% of the Commission’s land is coniferous or non-wooded, including farmland, and could be sold to raise up to £4.3bn without any impact on the broadleaf woodland most valued for public use.
These broadleaf forests, valued for their heritage and amenity, only make up 8% of the Forestry Commission’s land, and are generally not up for sale. The vast majority of the Commission’s woodlands are coniferous, with no bio-diversity, little variety of fauna and scant public amenity, says the report’s author, Miles Saltiel.
The Commission is also subject to inherent conflicts of interest as the largest single forest-owner and as the forest regulator, leading to chronic obstruction of Britain’s forestry sector. It has also failed in its key aims, including the following:
· Prevention of countryside erosion – its forestry practices is believed to have contributed to the acidification of Britain’s rivers
· Provision of visual amenity to the public – little has been done since insensitive tree-planting policies before the late eighties
· Assistance to the survival of natural fauna – the monoculture of plantations has limited ecological diversity
· Provision of a return on the public’s investment – this has never happened
The Forestry Commission’s failure to meet its aims mean that it is not fit for purpose and should sell or lease all its land, subject to covenants and arms-length regulation, which would protect the environment and ensure continued public access where appropriate. The Commission would then become a purely regulatory body. This would save the government £240million per annum in administrative costs, while also raising £4.3bn.
In this scenario, heritage woodlands like the Forest of Dean could be protected through a scheme of “voucher privatization”, whereby local citizens are given a stake in the forests rather than using charities or other intermediary groups. As the report notes, most of the UK’s broadleaf woodland is already privately owned, so this is not as radical a proposal as critics might suggest.
Dr Eamonn Butler, Director of the Adam Smith Institute, said:
“The Forestry Commission is a quango that has failed on all its objectives. It is not fit for purpose: it cannot regulate the UK's forests and be the largest forestry owner and manager itself.
“If we want to improve the forest environment, boost public access, and get better management and new capital into our woodlands, we need to open up state forestry to new people with new ideas. And we should do that not just in England, but in the other parts of the UK where the dead hand of state forestry denies real amenity and return to taxpayers.”
You can read the full report here.
Britons will work for 149 days to pay their taxes in 2011, according to respected free-market think tank the Adam Smith Institute. Every penny earned in the UK between January 1 and May 29 will be taken by the taxman to support government expenditure.
This means that Tax Freedom Day, the day when people stop working for the government and start working for themselves, will come on May 30 in 2011.
The most up to date government statistics suggest that Tax Freedom Day came on May 27 in 2010. This means that Britons will spend three extra days working to pay their taxes in 2011, compared with the year before.
The main reason for this is that the government has raised VAT, in order to help reduce the UK’s record budget deficit.
Tom Clougherty, executive director of the Adam Smith Institute, condemned the VAT rise saying:
“As well as hitting every household in the country, the VAT hike is going to dent consumer confidence and put a dampener on our economic recovery – as the Office of Budget Responsibility has already pointed out.”
He added:
“The government is right to give priority to cutting spending and plugging the deficit. But as Tax Freedom Day shows, Britons are still desperately overtaxed. The fact that we spend almost five months working for the State – and only seven months working for ourselves and our families – is a shocking indictment of big, wasteful government.”
Dr Eamonn Butler, director of the Institute, added:
“The coalition should examine the possibility of making targeted tax cuts now to encourage economic growth. But in the long term, they need to fundamentally overhaul the entire tax system. Lower, simpler, flatter taxes would be fairer for individuals, and better for the economy.”
29 November 2010
· Despite the coalition government’s spending reforms, public spending is set to face huge rises due to future commitments on healthcare, welfare, pensions and education
· These commitments, combined with the pressures of an ageing population, could result in a fiscal crisis in the UK along Irish lines as early as 2019
· The Adam Smith Institute calls for a radical reform of the welfare state to avoid this fiscal emergency
In a report released today the Adam Smith Institute warns that the government’s future commitments on healthcare, welfare, pensions and education are unsustainable. Spending in these areas has continually grown, and will continue to face mounting pressure due to an ageing population. As a result, the official debt figure is in reality only a fraction of the story - far greater are the off-the-books future obligations that the government has guaranteed in these areas. The coalition’s spending cuts will not be enough to stave off another fiscal crisis. Instead the government needs to transform intergenerational expenditures (1) and the way we view the role of the state.
According to the calculations in the Institute’s report, ‘On Borrowed Time’ by Miles Saltiel, there are three possible scenarios for the UK’s fiscal outlook. The worst, where the Comprehensive Spending Review is followed to 2015-16 and all the ‘proceeds of growth’ are used to fund higher public spending thereafter, would result in fiscal crisis(2) by 2019. The second scenario, where the proceeds of growth are split 50:50 between spending increases and debt reduction from 2015-16 onwards, would only result in fiscal calamity being delayed until 2031. In contrast, the third scenario, where public spending is held constant and all the proceeds of growth are devoted to debt reduction, would lead to the national debt being eliminated in 2041.
The Adam Smith Institute favours the third scenario and makes a number of recommendations within the report on how the government could achieve such spending restraint. The proposals would see the transformation of the role of the state away from the insurer of first resort towards being a safety net for the poorest. The vast majority of people would provide for themselves, whilst the welfare state’s focus will only be on the most needy within our society.
The report identifies healthcare as a key area needing radical transformation. Miles Saltiel, author of the report and award-winning analyst, proposes that the government should mandate a minimum healthcare package that everyone would be obliged to buy, and would fund premiums for those unable to afford them themselves. Beyond that, the health system would be private. All service providers – such as hospitals – would be privatized, which he calculates would raise one-off proceeds of £236bn after recapitalising PFI obligations of £28.9bn.
On welfare, the report proposes the introduction of a supportive tax and regulatory regime to foster private provision of incapacity, income and mortgage insurance. State support would be a time-limited last resort and conditional on intervention to get claimants back into work. Suggestions on how to reform education and pensions (3) are also included in the report, in an attempt to replace run-away costs with self-limiting systems that focus on innovation and value for money.
Dr Eamonn Butler, Director of the Adam Smith Institute, says: “We cannot keep voting ourselves generous pensions, healthcare and other benefits and vainly hope that our children will happily pick up the bill. It's time we got realistic on the scale of the problem, forced politicians to fess up to the future costs of new policies, and brought in rules to make sure that future generations cannot be saddled with the cost of our extravagances.”
ENDS
1. Intergenerational expenditures are commitments to spending in healthcare, education, pensions and welfare.
2. Fiscal crisis is defined as when the UK’s accumulated debt exceeds the credit watch threshold of 1.0xGDP. At this threshold credit rating agencies give notice of risk of downgrades in government securites, e.g. gilts.
3. The key proposals for education and pensions are as follows:
Education: state providers would be privatized, and a voucher system introduced for primary and secondary education. Tertiary establishments – such as universities – would be re-chartered to establish non-state basis.
Pensions: people would be compelled to save a set percentage of their income in private retirement accounts, as occurs in Chile, Singapore, Australia and (on a more limited scale) Sweden, and would be given tax incentives to make further, non-compulsory contributions. Eventually, the state’s role would be confined to providing a safety net for elderly people with insufficient savings.
· On Borrowed Time is published by the Adam Smith Institute, 23 Great Smith Street, London SW1P 3BL. You can download the report for free here: www.adamsmith.org/files/On_borrowed_time_ASI.pdf
· The Adam Smith Institute is the UK’s leading libertarian think tank. It engineers policies to increase Britain’s economic competitiveness, inject choice into public services, and create a freer, more prosperous society. For more information on our work, go to www.adamsmith.org <http://www.adamsmith.org>
21 November 2010
In response to Ireland asking for an EU bailout, Sam Bowman, Head of Research, argues that the bailout will be bad for Britain:
"The proposed bailout for Ireland is a bad deal for for the UK. It puts the interests of the European Union and the eurozone before the interests of Ireland and the British government should have no part in paying for it. Asking the British taxpayer to cough up £7 billion shows just how audacious the European Union has become in its desperation to keep the eurozone project afloat.
“The UK successfully avoided entering the eurozone. Ireland was not so lucky, but it entered in full knowledge of the risks involved. Bailing out Ireland now would undo much of the benefits that Britain has yielded from keeping the pound and would make a mockery of the spending cuts announced by the coalition last month.
“The proposed bailout is a bad deal for Ireland, because it will simply extend the current pain for even longer and create another lost generation of Irish young people. Ireland’s leaders should take the politically difficult step of defaulting on Ireland’s debt and allowing the insolvent Irish banks to wind down.
“In the end Ireland will have to choose its own path out of this crisis. But the British taxpayer should not be held responsible for past mistakes by Irish politicians.”
21 November 2010
In response to Ireland asking for an EU bailout, Sam Bowman, Head of Research, argues that the bailout will be bad for Britain:
"The proposed bailout for Ireland is a bad deal for for the UK. It puts the interests of the European Union and the eurozone before the interests of Ireland and the British government should have no part in paying for it. Asking the British taxpayer to cough up £7 billion shows just how audacious the European Union has become in its desperation to keep the eurozone project afloat.
“The UK successfully avoided entering the eurozone. Ireland was not so lucky, but it entered in full knowledge of the risks involved. Bailing out Ireland now would undo much of the benefits that Britain has yielded from keeping the pound and would make a mockery of the spending cuts announced by the coalition last month.
“The proposed bailout is a bad deal for Ireland, because it will simply extend the current pain for even longer and create another lost generation of Irish young people. Ireland’s leaders should take the politically difficult step of defaulting on Ireland’s debt and allowing the insolvent Irish banks to wind down.
“In the end Ireland will have to choose its own path out of this crisis. But the British taxpayer should not be held responsible for past mistakes by Irish politicians.”
11 November 2011
Dr Eamonn Butler, Director of the Adam Smith Institute broadly welcomes Iain Duncan Smith's welfare reforms and adds:
"The government's simplification of the welfare rag-bag is long overdue. Boiling 51 different benefits down to one universal credit will eliminate many of the perverse incentives that make it daft for people to seek work.
If millions of East Europeans can find work in Britain, so can people who live here. It is just a case of having the incentive. Some of the poorest people face an effective tax rate of 90% when they take work and lose their benefits. This reform should have happened years ago.
Most people will be staggered that it has taken politicians so long to insist that people taking state benefits should be actively seeking work. Mrs Thatcher was saying this back in 1983. Gordon Brown in 1998 told us that his New Deal meant there was 'no option' for people to stay at home on benefits. And he told us the same again when the plan was reinvented a decade later. In these straitened times, people in work are simply refusing to carry the burden of those who could work, but won't.”
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20 October 2010
Tom Clougherty, executive director of the Adam Smith Institute gives his initial reactions to the spending review:
“I’m delighted that the Chancellor has stuck to his guns, and laid out plans to eliminate the structural deficit by the end of the parliament. Politically, this may be difficult, but economically, it is absolutely vital.
“It is important to remember though that severe as some of these specific cuts are, the overall impact of the spending review is modest. Health spending is protected, while areas like social security and debt interest payments – which the review's cuts will not affect – are set to surge.
“In cash terms, government spending will continue to rise over the term of the government. In real terms the overall cuts only amount to a couple of percent.
“We need to realize that this is just the beginning. It is vital that the government goes on from here to carry out a radical, comprehensive reform of the public sector, since only that will make cuts sustainable in the long term.
“We also need a hard-headed, positive agenda for economic growth. Now the spending review is out of the way, the government’s attention must turn to these issues.”
20 October 2010
In response to the CSR today, Sam Bowman, Head of Research at the Adam Smith Institute, argues that the increase in DfID’s budget is indefensible in light of cuts to other departments:
“The Comprehensive Spending Review today makes necessary cuts in government domestic spending, but will raise the budget of the Department for International Development (DfID) by 37%.
“For example, the Treasury’s figures show a shrinkage of 23% in cumulative real terms for the Home Office between now and 2015 while at the same time showing an increase in DfID’s budget of 37% in cumulative real terms.
“Budgetary cuts are sorely needed, and to increase spending overseas while cutting spending in Britain beggars belief.
“Overseas aid is a waste of taxpayers’ money that props up dictatorships in sub-Saharan Africa and funds fast-growing countries like India, whose economy has grown by nearly 8.8% in 2010 and which has its own space and nuclear weapons programmes.
“Why the Chancellor thinks that the British taxpayer should fund the Indian space programme is unclear. At a time when the British government is cutting spending domestically it makes no sense to increase overseas aid spending. The government should slash DfID's budget and end this budgetary double standard.”
