This briefing argues that the Treasury should embark upon a sustained programme of tax simplification. Firstly, this would let people know their liabilities and assent to them – making clear the duties of citizenship and allowing individuals to feel they are partners with, not servants of, government. Secondly, tax simplification can lead to lower taxes. Lower and simpler taxes stimulate growth by discouraging avoidance and creating greater incentives to industry. The briefing goes on to outline a series of practical reforms that would make simpler taxes a reality.
Unfair Trade argues that for all its good intentions, Fairtrade is not fair. Firstly, by guaranteeing certified farmers a minimum price for their goods, it can distort local markets leaving other farmers even worse off. Secondly, only about 10 percent of the premium paid by consumers actually makes it to the producer, which makes it an inefficient way of helping the poor. Most importantly, Fairtrade does little to aid economic development, focusing instead on sustaining farmers in their current state. Although helpful to some in the short term, this holds back mechanization, diversification, and moves up the value chain. And by requiring farmers to form co-operatives, Fairtrade rules reduce opportunities for labourers to get full-time, permanent jobs and can foster corruption. The report also details the range of alternatives available to ethical consumers, which may be better options than Fairtrade.
The Waste of Nations argues that pay-as-you-throw (PAYT) waste charges are the best way to encourage recycling and to boost profitable waste businesses. However, the report stresses that PAYT must not be used as a 'dustbin tax' and that its introduction must be accompanied by a corresponding fall in council tax. The report also calls for the full liberalization of the refuse collection sector. Such a move would keep prices down and increase customer satisfaction. It would also lead to innovation and encourage refuse collectors to recycle more waste. The final section of the report argues that recycling should be put on a commercial footing. Recycling facilities and providers should be allowed to merge and consolidate, and the free movement and trade of recyclables should be established. This would ensure a market for commercially viable businesses in the long run.
Freedom 101 is a personal refutation by Dr Madsen Pirie of many of the common errors of economic, political and social debate. He has selected 101 of these erroneous assumptions in order to show why they are not correct. Many of them are in daily circulation as if they were truisms. We are told that, 'the world is running out of scarce resources' or that, 'we should protect the poor by fixing the price of essential goods'. The author shows in his pithy style why these and other assumptions are incorrect. Of his selected 101, some are based on errors of fact, some on false arguments, and many of them on a misunderstanding of how economics works. This is a refreshing book, full of sharp insights to help readers clarify their own thoughts and equip them to bring that same clarity to aid the understanding of others in discussion and debate.
Privatization - Reviving the Momentum calls for a new wave of privatizations, which could net the exchequer in excess of £20bn. Given the worsening state of the economy and the increasing tightness of the public finances, the report notes that such an inflow of funds would be very welcome. In addition to the revenues generated for the government, a new wave of privatizations would also deliver significant operational benefits. Previous privatizations have delivered a wide range of improvements, including increased investment, lower prices, greater choice and better service for customers – as well as underpinning billions of pounds worth of economic activity. The leading privatization candidates identified by the report include the Royal Mail, Channel 4, BBC Worldwide, Scottish Water, Northern Ireland Water, Glas Cymru, the National Air Traffic Control System, as well as government stakes in British Energy and the Nuclear industry.
True to form, the BAA leviathan, which owns and operates seven airports in the UK, is predictably resisting the Competition Commission’s recommendation that it should be broken up, and an element of much needed competition finally injected into the monopoly it has enjoyed since the business was privatised in 1987.
Accusations of ‘flawed’ analysis and other jibes favoured by lobbyists are thrown at the Competition Commission’s 290 page report, but in truth, the Commission’s robust assessment highlights the company’s lacklustre vision with regard to planning capacity, its poor standards of service and its high-handed snubbing of its main customer base: the airlines.
Combined with a score of other criticisms this explains BAA’s abysmally poor position in the Airport Council International league table of airport operator performance. Indeed, perceptions of BAA have sunk so low that the company must win the duffer’s prize for the least favoured business currently operating in the UK.
BAA plc was created as a dominant monopoly by government. And it ranks as probably the foremost monopoly in Britain. No less than 91% of all passengers flying in and out of airports in the South East fly through one of the company’s three airports that encircle the capital, not to mention its 84% share of airport passengers in Scotland. [Cont'd]
Ian Powell (pictured left), the newly appointed chairman of PWC, Britain’s largest accountancy practice, warns that our competitiveness is seriously damaged by a combination of increased regulation and uncertainty over taxes. Accountants are one of the main beneficiaries of excessive regulation – many businesses are obliged to employ them to advise on how to comply with the plethora of new regulations issued by national and EU authorities.
In the longer run, however, over regulation shackles GDP and, in turn, accountants’ fee income from audit and consultancy services. It is therefore highly significant that PWC’s chairman is saying enough is enough. Referring to the threats posed to the UK economy Powell observes, “The quantity and scope of regulation combined with the level of uncertainty and complexity in this country’s tax system are particular causes for concern”.
Meanwhile, yet another hedge fund - Krom River – announced it was relocating from London. In this case, the winner was Zug in Switzerland (pictured right). Mounting tax bills and Switzerland's more conducive regulatory regime, which was recently overhauled, were given as the principal reasons for the move. [Cont'd]
In this think piece – originally written for Whitehall & Westminster World – ASI policy director Tom Clougherty explains what he would do if he were prime minister for a day. In a nutshell: reduce spending and scale back government, reform public services, and cut taxes. Would it really be that hard?
Dr Eamonn Butler believes that the archbishop's criticism of the market is misplaced and that it is governments and regulators that are responsible.
Perhaps one should be relieved to learn that regulators have failed to come up with any plans on how to use their new powers granted by the Regulatory Enforcement & Sanctions Act that came into force yesterday.
The Financial Times reports that BERR – the Dept for Business, Enterprise & Regulation – had received no plans yet from the 27 national regulators allowed additional powers under this new legislation. Originally intended to streamline business regulation across the board, the Act actually provides powers for regulators to impose hefty fines on those who do not conform to a raft of regulations. [Cont']
The Adam Smith Institute is the UK’s leading libertarian think tank...
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