Britain must build up, out and all about

In a new paper for the Adam Smith Institute, Senior Fellow Nigel Hawkins sets out eight ways that Britain could increase the level of housebuilding at a national and local level. 

  1. Major planning reform

  2. Modest Green Belt encroachment

  3. Easing constraints for medium-sized/small house-builders 

  4. Dismantling some rental restrictions covering Housing Associations

  5. Promoting innovation within the house-building sector  

  6. Establishing some Infrastructure Developments Zones (IDZs) which could offer tax incentives and relaxed planning laws 

  7. Developing surplus public land 

  8. Kickstarting the New Garden Towns proposals

UK housebuilding has finally recovered to pre-recession levels but UK population continues to increase but remains well below the more than 357,000 homes built annual just fifty years ago. 
The overly political housing permission system has left an ever increasing UK population with fewer homes per person, and with even fewer homes per person where people want to live such as inner city London, Oxford and York. 

Complex, drawn out, and politicised planning decisions have also curtailed competition in the number and size of housebuilders — with only large housebuilders have been able to survive. In 1988 small builders accounted for 40% of new-build homes, but this figures is just 12% today. 


If the government wants to bring competition back into the housing sector, the report suggests Local Authorities should be encouraged to grant planning permission to land they own and sell this onto to private sector housebuilders, while retaining the upkeep in the value of land to provide new infrastructure to new and existing residents.


The Adam Smith Institute report also reiterates the Think Tank's critical assessment of the Green Belt. Covering 1,639,090 (13% of England's land area), the Green Belt more than the entire developed land area in the country (at just 9%). 


The free market think tank says that tighter eligibility is needed on what is classed as agricultural land, to reduce the amount of monocultural farms and air pollution caused by high-pesticide use; as well as opening up development for any brownfield sites currently within the Green Belt including the infamous Tottenham Hale petrol station


Reform could get Britain back to the levels of building seen in the earlier part of the 20th century, allow young Britons the chance to rent or own where they live and work, and tackle a sector that is held back by a lack of competition. 

Matthew Kilcoyne from the Adam Smith Institute said:

“Britain’s planning system was designed for a different age, when we were deserting cities in favour of the suburbs. Just like the rest of the world, this trend has reversed in the UK. But our planning system remains stuck in the mud and blocking development.

“For all too many young people the idea of owning a house where they live and work is just a pipedream. But the blockage in the pipe is just political, it can cleared as soon as the will as found. Solve the housing crisis, and we’ll solve the cost of living, boost productivity and send Britain’s economic growth rate soaring.”

To arrange an interview with a member of the Adam Smith Institute Institute please contact Matt Kilcoyne on 07904099599 or via email (matt@adamsmith.org)

Doing Right by Venezuelans

With the announcement that DFID will prioritise £6.5m in emergency aid package to treat malnourished children, and provide vaccinations and clean water to the most vulnerable communities affected by the Venezuela crisis, Matt Kilcoyne praises the move by Penny Mordaunt:

"The announcement of £6.5m in emergency aid to Venezuela is exceptionally welcome now that the UK has recognised Guiado as the legitimate president. We at the Adam Smith Institute have been highlighting the plight of those suffering under Maduro's socialism for over a year, and I'm glad to see DFID recognise the plight of those left in the Latin American state.

"Penny Mordaunt is right to prioritize money to the people of Venezuela have felt the full effects of socialism: the hyperinflation that has left millions in poverty, the shortages that have seen families starve, and medicines run out, the thousands that have felt the oppression of state militias when they speak out against Maduro regime. Ultimately aid won't be enough to restore what was once the richest state in the region, that will require the rebuilding of liberal economic institutions. Britain must stand ready to help.

"The government should also keenly praise the work of the Colombian government in keeping their borders open to refugees, to not restricting their right to work, and for ensuring that aid can enter Venezuela free from the corrupt hands of Venezuela's top brass."

For further information or to arrange an interview please contact Matt Kilcoyne on 02072224995, 07904099599 or email matt@adamsmith.org

ALL CAPS fail

Following Ofgem’s announcement that it is increasing its price cap on default tariffs, Daniel Pryor, Head of Programmes at the Adam Smith Institute, says that the government should learn from global evidence that shows price caps do not work for consumers:

“The price cap was doomed from the start. Today’s announcement will surprise nobody with an understanding of the modern energy market. The international evidence is clear—price caps hurt competition, discourage innovation, reduce switching rates and ultimately punish people struggling to heat their homes with higher energy bills.

"If the Government wants to make a real difference to our living costs, they should scrap the cap and encourage real competition in the energy market: letting competing energy companies target disengaged customers with better deals, expanding opt-out collective switches, and giving people greater control over their smart meter data to more easily compare the best deals on market.”

If you would like to arrange an interview or further comment from Daniel Pryor, please contact Matt Kilcoyne (0207224995, 07904099599, matt@adamsmith.org).

We don't understand why Oxfam is so concerned about US University debt

It’s the time of the year again when Oxfam sends out a reminder that the poorest in the world are actually doing better than ever before, but spun in such a way that suggests the world is in crisis. Head of Research, Matthew Lesh, has gone through the report and calls out its failings:

“Oxfam’s report is complete hogwash. It’s simply not true that the poor are worse off just because the rich have gotten richer, everyone can get richer at the same time. Oxfam doesn’t care about the poor, they just hate the rich. Oxfam should stop playing the politics of envy and start talking about how free markets, free trade and liberal institutions are the most effective poverty alleviation tool known to humankind. 

“Just because some people have gotten richer does not mean that the poor have gotten poorer. In fact, over last thirty years more than a billion people have pulled themselves out of poverty thanks to the adoption of freer markets and freer trade.

“Oxfam’s inequality claims are built on a methodology that would fail a first year statistics course. There is no crisis of inequality. In fact, particularly because of the rise of China and the developing world, global inequality is already declining for the first time since the Industrial Revolution. 

“According Oxfam’s methodology, which focuses on wealth and not income, a recent Harvard law graduate, with US$130,000 debt, has net negative wealth and is, therefore, poorer than a farmer in a developing country. The problem with American student loans is well known, but it’s not clear that it’s an issue that should worry Oxfam.”

For further comment, or to arrange an interview, please contact Matt Kilcoyne (via email: matt@adamsmith.org; or phone 07584778207 or 02072224995).

Size does not matter

Micro-homes central to inner-London living says Adam Smith Institute

  • Micro-homes could help new, younger Londoners move into flats in the city centre close to places of work and leisure

  • Design and liveability requirements should be kept, while floor space requirements scrapped, to green light a new wave of innovative development

  • Average house price is 5 times higher than 50 years ago

  • In the past 20 years London’s population has grown by 25%, but the number of homes by only 15%

  • By 2025, 3.5m Londoners will be living in rented housing, with 79% of adults moving to London in the last year renting

  • On average 1/3rd of income is spent on housing, up from 1/5th just 15 years ago

  • The upcoming GLA ‘London Plan’ should remove minimum space requirements for co-living units and micro-homes, while retaining the demand that they are “appropriately sized to be comfortable and functional for a tenant’s needs”

It’s not size that matters in housing, it’s how you use it.

Restricted supply of new housing has meant sharp rises in house prices and rents in central London in recent decades, with young Londoners priced out of the market. Micro-homes are purpose designed flats with floor space below 37sqm that make innovative use of space to expand choice available to many Londoners open to living in smaller, but more personal and private apartments.

Micro-housing is not the same as cramped sub-division of existing units, they are smart, modern, custom designed units that make good use of space which have won prestigious architectural awards. Micro-housing is often accompanied by communal amenities such as games rooms and open living spaces that help address loneliness.

Report author and urban policy researcher Vera Kichanova stresses that while micro-housing is not a panacea or a replacement for planning reform, it could be a partial solution for those in cities like London that want to live close to where they work, as well as close to bars and restaurants.

In London this means living in what the Greater London Authority calls the Central Activities Zone. Stretching from King’s Cross in the Northeast of the city to Battersea in the southwest, this area alone is home to 1⁄3 of all jobs in the capital and generates 10% of the UK’s GDP.

With 79% of adults moving to London in the past year in rented accommodation, being younger and with less disposable income than older generations, and with rents taking up an average of a third of their income, micro-homes in could be the only chance to stay within the Central Activities Zone.

Without micro-homes many Londoners are forced to pack into crammed peak hour commuter trains, are forced to share living space with complete strangers, or leave the city altogether.

Ms. Kichanova lays the blame for all of these squarely at the feet of government—specifically the Town and Country Planning Act 1947. By requiring local or central government permission for building projects, the Act detached house prices from just the cost of construction and tied it heavily to a price for land that was heavily rationed.

A previous report by the campaign group London YIMBY for the Adam Smith Institute had found London rents have been inflated by over 300% due to planning restrictions with over 75% of the cost of development coming from planning red tape.

A green light to innovative development could help London become a denser, more liveable city for its increasingly younger and dynamic residents by providing a choice that fits their individual requirements in the world’s most diverse city.

The Adam Smith Institute’s Head of Research Matthew Lesh said:

“Small, but perfectly formed micro-homes would expand choice for young Londoners. There are many who would rather live close to the city centre, in a building full of amenities such as game rooms and co-working spaces, rather than spending hours commuting every day.

London’s housing crisis is not just an economic problem, hurting growth because people cannot live where they would be most productive, it is also having very real and serious political ramifications. The lack of housing affordability is leading many to lose faith in the entire free market system.

Housing policy reform is an urgent priority, and while micro-housing is no substitute for fundamental planning reform, it is an important first step.

For further comments or to arrange an interview, contact Matt Kilcoyne, Head of Communications, at matt@adamsmith.org | 07584 778207.

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Low tax good, anti-migration bad

Responding to Boris Johnson's latest Brexit intervention, Daniel Pryor says warm words on free markets are not enough. While we welcome the idea of simplfying tax and defense of competitive markets, it will mean little if his promises on migration will harm investment, business and the lives of those who seek to make a home here Daniel Pryor, Head of Programmes at the Adam Smith Institute, said:

“High levels of income tax damages investment, economic growth and innovation—so it’s good to see a competitive tax system being defended. Simplifying our needlessly complex property taxes into one straightforward levy on land values will encourage investment and help end the housing crisis.”

“Cracking down on immigration won’t solve Britain’s productivity woes—it will make matters worse. The Migration Advisory Committee recently found that immigration increases productivity by contributing new skills and ideas, doesn’t lead to less training for native workers, and has little to no impact on wages.

“Boris is right that Britons deserve a pay rise. But that won't come from locking foreigners out of the economy. When women entered the office that didn’t destroy the world of work for men. Newly arrived citizens buy things we make here, live here, eat here, and contribute their skills to our economy. They encourage existing workers to upskill. If politicians want to increase the value of workers’ pay packets, they’d stop pickpocketing them with the highest tax burden in half a century.”

To arrange an interview or further comment please contact Matt Kilcoyne (07904099599 / 02072224995 / matt@adamsmith.org).

Patents, not boondoggles, really reward innovators


Britain’s history of patents helped the country become the powerhouse over the 19th century and the market based system helps maintain economic growth and innovation to the present day.

New research out today by free-market think tank the Adam Smith Institute shows that by being both a market mechanism and rewarding outcomes rather than intentions, patents beat the efforts of grants, tax credits and prizes in both effectiveness and value for money — all while keeping open and actually helping innovation by offering incentives in direct proportion to level that the invention or innovation services consumers' demands.

The paper stands as a challenge to both traditional libertarian thought that argue against the principle of intellectual property on grounds of principle, and state interventionist economists that call for more grant based funds and credits to researchers (often to their own benefit), by showing the system works in both principle and practice. 

Author Ben Southwood helps to back up the suggestion of the Tabarrok Curve, which shows patent protection boosting innovation by awarding firms economic rents for delivery of new products/services more than closest substitutes—but with effectiveness of this impacted by length of the patents.

Long patents, the paper suggests, only slightly increase incentive to invest but drastically slow flows of ideas into the public domain. The most costly in both the United States and the United Kingdom have been in the areas of medicines, especially the flow of specialist medicines to generics. This was seen in 2016 when Actavis UK 'evergreened' their hydrocortisone tablets with new slightly modified patents, and hiked the price over a decade from 70p a pack to over £88 a pack. 

Uncertain IP regimes, and uncertainty between IP regimes, have hindered collaboration and consumer benefit. This is especially relevant as the UK's ability to join the EU's patents union remains in question post Brexit this year.

With the UK having patents in one form or another since the 15th century they have played an important role in providing the property rights that enabled economic growth in this country to outstrip much of the world's remainder. In reform of the system, and as we leave the EU, we must be careful not to throw the baby out with the bathwater. 

For further comments or to arrange an interview, contact Matt Kilcoyne, via matt@adamsmith.org| +44 (0) 7584 778 207

Fat Cat Cod Stats Won't Help Workers

The High Pay Centre and Chartered Institute of Personnel and Development (CIPD) have declared today to be “Fat Cat Friday”.

Matthew Lesh, Head of Research at the Adam Smith Institute, commented:

“Another year, another set of cod statistics on executive pay. If these activist organisations actually cared about workers — and not just the politics of envy against our best and brightest — they would talk about ways to actually increase worker pay.”

“The only way to increase wages is by boosting productivity through innovation, cutting red tape, and making it easier for people to move for jobs.”

“In a global market for CEOs, British firms must be able to compete for top CEOs who provide immense value to companies. Decisions made by Britain’s makers and doers now have global impacts and their value to firms reflects this.”

“Limits on executive pay would drive top British talent and companies offshore, ultimately leading to fewer jobs and lower pay for workers.”

If you would like further comment, or to arrange an interview with a member of the Institute, please contact Matt Kilcoyne via phone (07584778207, 02072224995) or email (matt@adamsmith.org).

Government unskilled at guessing skilled migration needs

After the release of the government’s white paper on immigration post-Brexit, the Adam Smith Institute takes aim at the idea that government knows the skills employers need, better than employers do themselves.

Daniel Pryor, Head of Programmes at the Adam Smith Institute, said:

“Today’s white paper ignores the elephant in room—the Government’s nonsensical 100,000 annual net migration target. Most sensible politicians don’t think we should set arbitrary quotas on the amount of doctors and nurses we can bring into the country, but Number 10 seems determined to apply this logic to our post-Brexit migration policy. Taking back control of our borders means deciding who should be at the front of the queue, not pulling up the drawbridge to those who want to contribute to our economy and public services.”

“Scrapping the cap on high-skilled workers and taking a more liberal approach to post-study leave are long overdue and welcome reforms, but proposals for a £30,000 minimum salary requirement risk creating widespread skills shortages and should be scrapped without hesitation. This is pure central planning. There is a reason the government doesn’t manage hiring for UK natives; it is worse at identifying the skill gaps of businesses than those businesses themselves. This is equally true for foreign-born workers.”

“Restricting low-skilled workers to spending no more than a year in the UK pulls up the ladder and prevents these new Britons from working towards a better life for themselves and their families. Our post-Brexit migration policy looks set to make us all poorer, our society more bureaucratic and our country less open.”

If you would like further comment, or to arrange an interview with a member of the Institute, please contact Matt Kilcoyne via phone (07584778207, 02072224995) or email (matt@adamsmith.org).

Sadiq's food ad ban plan will add to TfL's unhealthy deficit

Health policy has to be based on evidence. But bad data is worse than no data at all, and our current method of measuring childhood obesity relies on bad data. There is no ‘childhood obesity crisis’. Which makes it all the more depressing that Sadiq Khan is pressing ahead with a pointless food ad ban for TfL.     

Daniel Pryor, Head of Programmes at the Adam Smith Institute, said:

“Transport for London are facing a £1bn operating deficit and now stand to lose an additional £200 million from Crossrail delays. Despite this, Sadiq Khan thinks now is the perfect time to sink another £13 million on a paternalistic fast food ad ban despite no credible evidence that it will reduce childhood obesity rates.”

“This multi-million pound hole in TfL’s budget will mean more delays, worse service, and higher fares for ordinary Londoners on their daily commute. Adults do not need the government to protect them from pictures of burgers and parents are capable of dealing with their children’s ‘pester power’.”

If you’d like further comment, or to arrange an interview, please contact Matt Kilcoyne on 07584778207 or email matt@adamsmith.org