ASI comments on Labour's pledge to cap rents picked up by Associated Press

Deputy Director of the Adam Smith Institute Sam Bowman was quoted by The Associated Press criticising Labour’s pledge to cap rents from rising above-inflation for the next three years. The quote has featured in over 90 local print outlets.

But any rent control was called " a stunningly bad idea that could clobber renters" and "devastate" cities, by the free-market Adam Smith Institute think tank.

Deputy director Sam Bowman said the Labour proposals were "less harmful" than those criticised by Lindbeck "but shift risks from landlords to tenants.

"They incentivise landlords to price in expected rent rises at the beginning of the tenancy, so if rents fail to rise as quickly as expected, the tenant is left paying more than they would need to.

"Labour has unwittingly announced a policy that could devastate Britain's cities and exacerbate the housing crisis.

"If Labour want to reduce housing costs for renters, it should advocate planning reform to increase supply so that the price of housing drops in real terms."

Press Release: Rent caps could devastate British cities and clobber renters

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207 Commenting on Labour’s pledge to cap above-inflation rent rises for three years, Deputy Director of the Adam Smith Institute Sam Bowman said:

Rent control is a stunningly bad idea that could clobber renters.

Rent caps come in two forms. The ‘first generation’ kind, which simply puts a ceiling on rents, can utterly destroy entire districts as landlords have no incentive to maintain their properties. These have been deemed by the Swedish (socialist) economist Assar Lindbeck to be “the most efficient technique presently known to destroy a city except for bombing".

‘Second generation’ rent controls are what Labour seem to be proposing, and are less harmful, but shift risks from landlords to tenants. They incentivize landlords to price in expected rent rises at the beginning of the tenancy, so if rents fail to rise as quickly as expected, the tenant is left paying more than they would need to.

Labour has unwittingly announced a policy that could devastate Britain’s cities and exacerbate the housing crisis. If Labour want to reduce housing costs for renters, it should advocate planning reform to increase supply so that the price of housing drops in real terms.

Notes to editors:

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.

If Eurogroup meetings fail, is a Greek default inevitable? - Sam Bowman leans YES in CityAM

Deputy Director of the Adam Smith Institute Sam Bowman took part in the CityAM debate, arguing that failed Eurogroup meetings would make a Greek default more likely:

No country has pulled back from a peacetime debt-to-GDP ratio as high as Greece’s 175 per cent without defaulting. Its options are to grow out of debt, default unilaterally, or restructure its debt in cooperation with the Eurogroup. With the last of these off the cards, it may push for growth. But the country is in a state of near-perpetual deflation, which means that, even if it did have growth, it would still not be enough to boost its nominal GDP growth to the 4.9 per cent the Eurogroup believes is needed to start paying down its debts. Big supply-side liberalisations seem unlikely under Syriza, and certainly not on the scale necessary to deliver the growth a deflationary Greece would need to change its borrowing trajectory. However, absent debt servicing costs, it is running a budget surplus. If it defaulted, it may not need to worry about borrowing for now. If debt restructuring is truly off the table, a unilateral default may look very tempting.

Read the full debate here.

Is Google's dominance actually dangerous? - Charlotte Bowyer argues NO in City AM

Head of Digital Policy at the Adam Smith Institute, Charlotte Bowyer, argues that Google's online prominence isn't something to worry about in the CityAM Forum Debate:

There’s no denying that Google’s empire is vast. But the question is whether the prioritisation of its own services within search is actually bad for consumers. Many rival facilities exist, yet despite heavy investment and the promotion of services like Yahoo’s Bing, EU consumers just aren’t that interested. This suggests that people simply find Google’s search function superior, or enjoy the efficiency of its integrated services. But the way in which we access information and entertainment is evolving. Personal Assistant services like Siri are designed to compete with traditional search, while consumers are increasingly turning “in-app” to services like Facebook, Instagram and even Snapchat for news and recommendations. Many once-popular services and tech companies fall out of favour with time. With so many alternatives out there, there’s no reason to assume that Google’s current dominance is anti-competitive, or even guaranteed to continue.

Read the full article here.

Kate Andrews argues against minimum alcohol pricing on BBC The Big Questions

Head of Communications at the Adam Smith Institute, Kate Andrews, appeared on BBC One’s The Big Questions to debate whether drinkers need to 'pay their way'. She argued that drinkers are already paying their way and that increasing the price of alcohol serves as a regressive tax that hurts the least well-off and contributes to the cost of living crisis. Watch the full episode here. (Segment on minimum alcohol pricing starts 22:50)

The ASI's reaction to UKIP's Manifesto features in City AM

The Adam Smith Institute's comments on Ukip's pledge to ban unskilled immigrants from the UK for five years were featured in City AM:

A key pledge made by Nigel Farage as Ukip launched its manifesto, designed to rouse voters at the General Election in May, has been slammed by one think-tank within hours.

Plans to crackdown on immigration by unskilled workers has been described as breaking with "evidence, common sense and moral decency" by the Adam Smith Institute.

Read the full article here.

Press Release: UKIP's crackdown on unskilled immigrants goes against all economic sense

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207 Commenting on UKIP's pledge to ban unskilled immigration to the UK for five years, Director of the Adam Smith Institute Dr Eamonn Butler said:

UKIP’s crackdown on unskilled immigrants breaks with evidence, common sense, and moral decency. Low-skilled immigration does not affect the number of jobs available to natives; in fact, immigrants demand goods and services, which means new jobs are created to supply those services and community needs.

Immigrants prop up the welfare state, paying more in taxes overall than they consume in services or benefits. The best evidence suggests that low-skilled immigration only has a small and temporary negative effect on native wages, and this effect does not compare to the wealth they generate for the UK.

UKIP’s pledge to ban unskilled immigration for five years goes against all economic sense. It is only supported by a dogma that is both intellectually and morally bankrupt.

Notes to editors:

For more information, read ASI briefing paper "The Ties that Bind: Analysing the relationship between social cohesion, diversity, and immigration", which finds no conclusive evidence that diversity within UK communities creates a negative impact on social cohesion.

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 reaction to the Conservative Manifesto features in The Daily Telegraph

Director of the Adam Smith Institute Dr Eamonn Butler was quoted in The Daily Telegraph on the Conservatives' pledge to keep minimum wage earners out of tax:

"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" said Adam Smith Institute director Eamonn Butler.

"However, to truly take the lowest-paid out of tax, the Tories would do well to reevaluate the National Insurance threshold."

Dr Butler and Kate Andrews, Head of Communications at the Adam Smith Institute, were also quoted in The Telegraph online on the minimum wage pledge and the childcare pledge:

The Adam Smith Institute’s Kate Andrews said the plan could inflate the cost of childcare. "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."

 

Adam Smith Institute director Eamonn Butler welcomed the change. “It’s been an absurd part of UK tax policy that people making the minimum wage have had their earnings taxed away," he said. "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."

Read the full article here.