Politicians should stop trying to regulate a porn industry they don't understand

The Adam Smith Institute has reacted with dismay at the suggestion by the Government's Digital minister, Matt Hancock, that users of porn websites should have to hand over credit card details to access sites hosting pornographic content.

Sam Dumitriu, Research Economist at the Adam Smith Institute, says:

"Requiring adult websites to force users to provide their credit card details poses a dangerous threat to privacy and will enable widespread credit card fraud.

"Consenting adults shouldn't be forced to announce that they're looking at pornography to their credit card company.

"There are massive fraud risks. It could mean that users are nudged into handing over data to unsafe sites - leaving them at the risk of fraud. Pornography is especially attractive to fraudsters as victims are often too embarrassed to flag up unexpected payments to adult sites to their credit card company.

"Politicians should stop trying to regulate things they don't understand."

To arrange an interview or further comment please get in touch with Matt Kilcoyne on 07584778207 or via email matt@adamsmith.org

Entire generation risks never knowing their grandchildren

  • New paper reveals Britain’s housing crisis risks turning into a fertility crisis
  • Unaffordable housing is causing a fertility crisis in Britain
  • Homeownership has collapsed among young people, as house prices and rents continue to rise
  • This has forced people to have fewer children and put off having children until later in life
  • 157,000 children were not born due to the cost of housing between 1996 and 2014
  • Cheaper housing allows people to have as many children as they want, as early as they want

High house prices are preventing a generation of people from having children, says a new report by the Adam Smith Institute. Unaffordable housing has forced people to have smaller families and delay starting a family until later in life, threatening an entire generation of children who may never meet their grandparents.

With Brexit likely to lead to a decrease in immigration, the report argues, there is also a clear economic need to raise the birth rate in order to pay for Britain’s ageing population’s pension, healthcare and social care costs. As the country ages and immigration falls after Brexit, the government must remove barriers to population growth within Britain, or else face a demographic time bomb where taxes on working-age people spiral to pay for looking after their parents and grandparents.

Chief among these is the cost of housing, which is strongly associated with couples having fewer children than they would like and delaying having their first child until much later in life. The average age of women when they first gave birth has risen by four years since the 1970s, and looks to continue rising.

Though rising house prices increase the birth rate among existing homeowners, they keep people off the housing ladder and stuck renting, where they are less likely to have children.. With falling homeownership rates in the UK, especially for young people, this means that the net effect of rising house prices is highly negative on our national fertility rate. Between 1996 and 2014, a ten percent increase in house prices resulted in a 4.9% decrease in births among renters but just a 2.8% increase in births to homeowners – a net decrease of 1.3%. House price rises between 1996 and 2014 are estimated to have stopped approximately 157,000 children from being born, compared to if housing had not become more unaffordable.

The report warns that this trend is set to get even worse without radical action on housing supply from the government. The population over 85 years of age doubled between 1985 and 2010 and is expected to constitute almost 5% of the population by 2035. The median age rose from 35.4 to 40 between 1985 and 2014 and will rise to 42.9 years by 2039 unless action is taken.

The report’s author, Andrew Sabisky, argues this has serious cost implications for British taxpayers, with the over 85s costing the NHS three times as much as the average 65-74 year old whilst the number of working-age people for every pensioner is likely to fall from 3.2 to just 2.7 by 2037.

In the ten years between 2004 and 2014 homeownership fell from 60% to 35% among 25-34 year olds—the key childbearing demographic. In 1991 nearly two thirds of 16-25 year olds would have purchased property - that figure stands at just one in ten now.

Properties that young people do buy, the paper warns, will often be too physically small to fit a large family and the saving required pushes women towards older motherhood – in 2010 the average age of women giving birth went above 30 years of age with more than a quarter of births (26.5%) to mothers born outside of the UK. More and more young women are being forced to wait to have the children they want and, by both age and inappropriate housing, are forced to have fewer children than they want. These trends will mean that more and more grandchildren will be born after it is too late to meet their grandparents and great-grandparents.

This demographic decline is our choice, says the paper. To change course and allow people to start their families earlier the government must take radical action to allow more homes to be built. Without more homes and greater supply many babies will simply never be born.

Andrew Sabisky, Independent Researcher and author of the report, says:

“The housing crisis is a well-known immediate economic problem, but this report showcases how it is wrecking the lives of the people of this country, preventing them from having the children they want to have.

"This private tragedy will, in the long-run, entail massive knock-on costs to public finances. Housing market liberalisation is something the Government should do anyway, but this report outlines a new set of pressing reasons for it to act.”

For further comments or to arrange an interview, contact Matt Kilcoyne, Head of Communications, matt@adamsmith.org | 07584 778207.
The report ‘Children of When’ is available to read in full here.
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.

Adam Smith Institute welcomes the Taylor Review on the gig economy

The Adam Smith Institute welcomes the Taylor Review out today reporting on the Gig Economy.

Sam Dumitriu, Research Economist at the Adam Smith Institute, says:

"It's good news that Matthew Taylor has resisted Labour's call to ban zero-hours contracts. They provide flexibility that benefits both workers and bosses. People on zero-hours contracts actually have higher job satisfaction that ordinary employees and when McDonald's offered staff a choice most chose flexibility over security.

"Gig Economy firms like Uber, Deliveroo and CitySprint are good for both consumers and workers. They deserve a lot of the credit for Britain's record high employment rate. We should be wary of attempts to regulate new flexible forms of employment.

"One of the Report's findings suggested forcing platforms to calculate 'average' and expected hourly wages. But that would impose administrative burdens that established players can handle but new entrants might struggle with.

“We don’t want to punish employers for giving workers more rights by hitting them with higher taxes, and raising taxes on the self-employed is unpopular and will simply be seen as a money grab. The Government should be bold instead by combining National Insurance and Income Tax while expanding the personal allowance to help out those on low incomes.”

To arrange an interview or request further comment please contact Matt Kilcoyne on 07584778207.

The European Commission fining Google will end up hurting users in a misguided quest to help them

The European Commission fining Google will end up hurting users in a misguided quest to help them

In fining Google this morning for giving prominence to its Google Shopping service European Regulators made the same mistake that regulators did in the 1990s when Microsoft was fined for bundling Internet Explorer with Windows products. Bundling has benefits as well as costs, because it pays for the free things Google does, and trying to stamp it out will end up hurting users in a misguided quest to help them.

Labour’s fare cap is a bung to train passengers

Commenting on Jeremy Corbyn's pledge to cut commuter rail bills by £1000, Adam Smith Institute Head of Research Ben Southwood said:

Labour’s fare cap is a bung to train passengers which will be paid in higher taxes on those who cycle, drive, or get the bus instead.

Railway improvements cost money. The government already pays around a quarter of the price of a ticket—although very little of this goes to commuters—and the more of the cost they take on, the less money we have to modernise and improve our railways.

Under British Rail, the government chronically underinvested in the railways and they dwindled for decades and half the network had to be mothballed; since we returned operating companies to the private sector passenger journeys have more than doubled. HS2 effectively rebuilds, at great cost, the high speed line that already existed—built by the private sector, and scrapped by the state.

Before privatisation there were 17 trains a day from London to Manchester—now there are 47.

The franchise system isn’t perfect, but nationalisation is a step backwards. To move forwards we must learn from the most successful systems, like Japan’s, where integrating track and train in a private system has unlocked a torrent of investment—newer and faster bullet trains every year.

For further comment or to arrange an interview please get in touch with ben@adamsmith.org or call 020 7222 499