Anthony J Evans lays out the first, second and third best policies for monetary reform. He outlines reforms to quantitative easing policy that would reduce the distortions it causes; argues that inflation targeting and the Monetary Policy Committee should be replaced by an automatic nominal GDP target; and ultimately says the Bank of England should be scrapped altogether, replaced with privately-run ‘free banking’.
• Green Belts are unsustainable. Urban containment policies push up rents and house prices and generally increase the cost of living, force households into ever smaller homes and more cramped transport, and are harmful to the environment. This hugely depresses people’s quality of life.
• In The Green Noose we recommended a policy of “Abolish and Protect”, whereby substantial parts of the existing Green Belt would be re-designated under other land-use classifications, while the remainder would be available for development. This would allow markets to operate and so ensure that welfare-maximising solutions emerged.
• However, debates about Green Belt policy always descend into demands to know where development will take place, or claims that every hectare of declassified land would be concreted over. While the former misunderstands the role of planning policy, and the latter is disingenuous, such arguments are almost impossible to avoid.
• This paper seeks to provide examples of where development could take place. As it is location-specific, we have chosen to focus on one Green Belt – the Metropolitan Green Belt around London. In doing so we (artificially) distinguish between the Metropolitan Green Belt and “London Green Belt” (i.e. those parts of the Metropolitan Green Belt within the boundaries of Greater London).
• Our aim is not to prescribe sites for development, but to demonstrate that there is ample land within the Metropolitan Green Belt that would be suitable for development and could be built upon without undermining the overall purpose of Green Belt policy (as defined by the NPPF).
• We look at six scenarios:
1. Declassify Metropolitan Green Belt land within walking distance of a rail way station
2. Declassify Green Belt land in London within cycling distance of a railway station
3. Allow development of Green Belt golf courses
4. Infill areas of Green Belt that do not support Green Belt Policy
5. Remove agricultural land from the Green Belt
6. Declassify and re-use of already developed Green Belt land.
• Each of these would make a dramatic contribution to meeting housing need in London and the South East; in three cases, a single measure would more than meet all additional housing need until 2030.
It is one of those stories that bring English kings alive to schoolchildren – like Cnut ordering the sea to retreat, Alfred burning the cakes or Harold getting an arrow in the eye – and probably just as fanciful or misleading. It is a romantic story of Bad King John on an island in the River Thames, canopy above him and quill pen in hand, being forced by the assembled barons to sign Magna Carta – the ‘Great Charter’ of rights and liberties, on which Western constitutions, the rule of law, justice, democracy and freedom still rest. The reality is different. There certainly was such a grand meeting between the despised King John (1166-1216) and his barons on the island of Runnymede in June 1215. But there was no quill pen (kings at that time would affix their seal, not their signature, to documents).
In fact, there was probably not even a physical charter to be sealed – just hurried drafts, produced by scribes, on what was being negotiated and agreed. Nor did the charter that eventually emerged, with clauses on subjects such as fish weirs, widows’ inheritances and forests, look much like a conscious design for a constitution. Applying only to the elite, it was certainly no blueprint for democracy. And within weeks, John had got the Pope, his feudal superior, to annul the whole thing anyway.
Yet despite all that, Magna Carta and what it stands for still runs deep in the Western consciousness. It has almost totemic status as the guarantee of our rights and freedoms, and of just government, restrained by the rule of law.
As the new government considers its energy policy agenda, and in light of the Competition Markets Authority (CMA) review of electricity market competition, now is a good time to consider the effects of OFGEM’s current regulatory framework on actual market outcomes for consumers. Current regulations undervalue the effect of innovation on the benefits that consumers enjoy. The CMA’s provisional findings reflect an understanding of the beneficial potential of innovation.
Britain’s welfare system is overcomplicated, wasteful and counterproductive. In Free Market Welfare, Michael Story makes the case for merging most working-age benefits into a Negative Income Tax – a single, tapered payment that tops up the wages of the working poor and guarantees that work always pays.
This paper assesses the various utility sales of telecoms, gas, water and electricity companies during the 1980’s and 1990’s and looks at how government, shareholders and customers fared since the privatisation process. The paper argues that the following benefits occurred for each stakeholder:
For the government – various general benefits accrued, such as a pronounced surge in investment. It benefited financially, both from one-off sales proceeds and from ongoing sizeable Corporation Tax receipts.
For shareholders, like pension funds, have generally done very well, with many privatizations – particularly the 12 RECs – heavily outperforming the FTSE 100. Privatized water stocks, too, have powered ahead. There are a few notable exceptions to this, such as Railtrack, British Energy and British Telecom.
For utility customers the financial benefits have been less tangible – in a period of massively rising wholesale prices there has been little to pass on. But investment has been much higher and much-needed improvements in customer service have been developed. Telecoms prices have actually fallen materially, while domestic gas, water and electricity prices have all risen sharply in real terms. However, domestic energy prices have risen mainly due to much higher wholesale gas costs – not because of private sector ownership.
The paper finds investment in utilities is now much higher than before privatization, especially in the electricity distribution and water sectors. It also argues that the privatisation of utilities also created an innovation spike, specifically in the telecoms sector.
- The UK’s welfare system is in a parlous state, beset by ineffective policies, a culture of dependency, and an ever-increasing price tag. While well-intentioned, recent reforms such as Universal Credit have done little to change this. We must seek more radical reforms to shore up the UK’s welfare system and boost employment.
- This in mind, the UK should adopt a 5 year time limit on all out-of-work benefits, with payments withdrawn incrementally to avoid a ‘cliff at the end of the period’.
- We can look to President Clinton’s reforms of the 1990s for evidence of time limits’ effectiveness. Clinton’s Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) saw a 6–7% fall in unemployment counts, a decrease in benefits caseloads by 96%, an unprecedented increase in female employment, and a reduction in government spending by an estimated $54.2 billion between 1996 and 2002.
- While they are no panacea, combined with investment in re-training and up-skilling, time limits on welfare would be a significant step towards fixing the UK’s distortional welfare system and breaking the cycle of learned victimhood.
This book is an analysis of progress – its meaning, its constituent elements, the conditions that favour it, and the methods people use to achieve it. Its central theme is that progress implies a closer approach to nominated goals; there must be a target to make progress towards. Alternative attempts to achieve progress are tested against each other, and new attempts are tested against old ones. The ones which prove better than their rivals at achieving progress towards chosen goals are retained, and inferior alternatives are discarded.
You can buy your copy of Trial and Error here
- It isn’t greedy employers, but greedy government, that is keeping people in inwork poverty; without tax on low earnings even workers on the 2015 minimum wage would earn a living wage.
- The government should raise the national insurance contributions (NICs) threshold along with the income tax threshold to let workers keep more of what they earn—without tax 37.5h on the minimum wage would give workers just 32p/h (or £670/year) less than the living wage.
- Employer-side NICs fall partly on employment and partly on workers’ wages— cutting them should also be a governmental priority.
- Unconditional benefits paid to those in work are not a subsidy to employers, in fact they may induce employers to offer higher wages; those such as tax credits go mostly through to higher wages. Rothstein (2010) estimated that in the United States 73% of the Earning Income Tax Credit went to the worker.
- Even if the minimum wage for the over-25s were increased to £9/hour under the current tax system, take home pay will be only 69p/hour above the untaxed level of the 2015 minimum wage. This difference will become even less significant considering planned increases in the minimum wage in the coming 5 years.
- Instead of imposing a mandatory National Living Wage, the Chancellor would have done better to remove taxes from the lowest paid, giving workers a similar level of post-tax income while forgoing the 60,000 higher unemployment and £1.5 billion lower GDP that the Office for Budget Responsibility predicts will accompany his plans.
In 2014, the Bank of England commenced a stress testing programme in an effort to test the capital adequacy of major UK-based banks. It concluded that its results demonstrated the resilience of the banking system. No Stress, a report from the Adam Smith Institute, suggests that we should be extremely sceptical of the Bank’s conclusions.
The report sees Kevin Dowd, Senior Fellow of the Adam Smith Institute, professor of finance and economics at Durham University, and author of three books, ten book chapters, and dozens of journal articles on risk modelling, present a powerful and rigorous indictment of the Bank’s stress testing programme.
Dowd makes the case that the stress tests are significantly methodologically flawed and worse than useless, giving policymakers unreliable information about the strength of the UK banking system, providing false risk comfort, and creating systemic instability by forcing banks to converge towards the Bank of England’s models.
For these reasons and more, he concludes that we should end regulatory risk modelling and re-establish strong bank governance systems that make decision-makers personally liable for the risks they take.