Politicians ignore consequences

There are some policies that UK politicians support, yet which are known to have adverse consequences. You can put a stake through the heart of these policies and bury them at the crossroads, but still they rise up from the dead to haunt us.

Rent Controls are supported by some on the left, including some Labour/Green/SNP politicians. Evidence from cities including Stockholm, San Francisco, Dublin, Berlin and pre-reform New York consistently shows that rent controls reduce housing supply, discourage maintenance, and worsen long-term affordability, even while helping existing tenants short-term. Economists broadly agree on this across the political spectrum. Evidence from Argentina shows that easing rent controls greatly increased rental unit supply, while decreasing rents in real terms.

Restricting planning and housing development are supported across parties, especially in protecting ‘character’ of areas. Nimbyist planning restrictions are widely identified by economists as a major driver of the UK housing crisis, pushing up prices and reducing labour mobility. Politicians from all parties often oppose local development despite this evidence.

Universal Free Tuition is advocated by some Labour figures. Fully free university education primarily benefits higher earners, who disproportionately attend university, and is regressive compared to income-contingent loans. The IFS has noted this trade-off repeatedly.

‘Tough on crime’ mandatory minimum sentences are supported by some Conservatives. Evidence suggests mandatory minimums do not deter crime effectively, increase prison overcrowding, reduce judicial discretion, and disproportionately affect minority communities, without clear public safety benefits.

 Agricultural/farming subsidies in their current form are supported broadly cross-party. Subsidies tied to land ownership are regressive, environmentally damaging, and economically inefficient, largely benefiting large landowners over small farmers or consumers.

 Opposition to safe drug consumption rooms is mainstream across parties, but evidence from countries such as Switzerland, the Netherlands, and Canada shows supervised consumption sites reduce overdose deaths and disease transmission without increasing drug use locally. Most UK politicians still oppose them despite this. 

 Keeping the triple lock on state pensions is supported by most politicians, fearing the grey vote. The triple lock is increasingly seen by economists as fiscally unsustainable and inequitable across generations, transferring wealth toward already-asset-rich older generations at the expense of younger working people.

 The central argument against a UK wealth tax is that it would trigger capital flight. Wealthy individuals would move themselves or their assets abroad to avoid it, potentially reducing the overall tax take rather than increasing it, undermining the very purpose of the policy. Several European countries, Sweden, Germany, and France, tried and then abolished wealth taxes after finding they raised less revenue than expected while causing economic distortions. A tax on accumulated capital discourages saving and entrepreneurial risk-taking, potentially slowing economic growth. Norway found that its wealth tax cost twice as much in lost revenue as it was intended to raise. Despite this, it remains on the agenda of leftist politicians.

In most cases, politicians are aware of these trade-offs but face electoral incentives, ideological commitments, or powerful interest groups that make reform difficult. The gap between evidence and policy is a feature of most democracies, not unique to any one party.

Madsen Pirie