Released to coincide with a seminar event at the Conservative Party Conference on 7 October 2009, this paper from Keith Boyfield argues that while Governments and regulators invariably claim that regulations are introduced for the most laudable of reasons, regulations often have unforeseen and highly damaging consequences. This paper discusses some striking examples of this trend across a spectrum of business and social sectors, ranging from banking and finance to health and safety regulations.
Good money after bad?
In Good Money after Bad?, Keith Boyfield analyses the efficacy and drawbacks of EU regional aid. Among other things, Boyfield recommends that the system for allocating structural funds to the regions of the EU be changed, and member states should take over responsibility for allocating any regional development aid, according to the principle of subsidiarity.
Regulatory Corporatism
In 'Regulatory Corporatism: Lord Turner and the Tobin Tax' financial analyst Miles Saltiel attacks the idea of a 'Tobin tax' on financial transactions, calling it "misguided", "unfounded" and "incoherent". As well as being unrealistic – such a tax could only be implemented after widespread international agreement – Saltiel says the Tobin tax is a distraction from the reforms the financial sector really needs. Indeed, by guaranteeing government a bigger slice of banks' profits, it would encourage politicians to accept the too-big-to-fail, near-monopolies that have emerged in the banking sector over the last economic cycle.
Ten Economic Priorities
'Ten Economic Priorities: An agenda for an incoming government' argues that significant real terms cuts in government spending are essential if the UK is to balance its books and stave off bankruptcy, and calls on an incoming government to draw up a "Medium Term Financial Strategy" to restore stability and reassure investors. The next government should also commit to tax cuts once the public finances are under control, focusing on income tax, national insurance and corporation tax. This report also covers sound money, privatization, public sector pensions, PFI, public procurement, bank supervision, and the Asset Protection Scheme.
Financial Regulation
Financial Regulation: What is the best solution for the EU? responds to the EU consultation papers Communication from the Commission, European financial supervision, and the accompanying Impact Assessment. The authors also outline their own proposals for the future of EU financial regulation.
Re-energizing Britain
In Re-energizing Britain Nigel Hawkins warns the UK faces blackouts unless the six major energy companies invest. New nuclear plant should be encouraged by replacing the existing Renewables Obligation with a new Low Carbon Obligation, which would include nuclear power. The three key aims of energy policy – security of supply, reduced carbon emissions, and lower prices – would all benefit from this change, since nuclear energy is both low-carbon and less expensive than many other ways of generating electricity, and does not depend on risky supplies of gas from Russia. The government also needs to work with the energy companies to make sure that they have both planning approval and access to finance to increase Britain's gas storage facilities substantially. The UK has only one-tenth of the gas storage of Germany, and is dangerously exposed to interruptions in supply.
The War on Capitalism
According to mainstream human rights thinking all human rights are “indivisible". Therefore, this mantra insists, economic, social and cultural rights such as the right to an adequate living and the right to social security should not be treated differently from classic freedom rights such as free speech and habeas corpus. In 'The War on Capitalism: Human rights, political bias' Jacob Mchangama argues that this conflation of very different rights is a fallacy, and that it reveals a marked political bias towards state involvement in the economy, increased public spending and the limitation or even abolishment of free market initiatives.
The Recession: Causes and Cures
In The Recession: Causes and Cures, economist David Simpson analyzes the current recession and the government's responses to it. He finds that the widely-held conventional view of the economic cycle – which suggests recessions are caused by external shocks and can be remedied by a government-applied stimulus – is inadequate in the present circumstances, and is leading policymakers both to misunderstand the causes of the crisis, and to advocate the wrong cures. This report examines the real causes of the recession, and suggests policy options which could bring it more quickly to an end.
Regulatory Myopia
This response to Financial Services Authority Discussion Paper 09/2 argues that regulators, not under-regulation, are to blame for the financial crash. It points out that the banks are already minutely regulated, but that the regulators became so preoccupied with form-filling that they did not see that the whole financial system was at risk. What is needed is the kind of overall supervision that would have seen the potentially fatal risks that the banks were running and would have intervened to curb them. The authors suggest the Bank of England should take on this supervision role in future, and that far from being expanded, the powers of the Financial Services Authority (FSA), should be cut back to 'match its competence'.
Zero Base Policy
Britain is broken. Its finances are in ruins, its taxation is chaotic and punitive, its public services fail to reach adequate standards, and its public administration shows no coherence and commands no respect. In Zero Base Policy Madsen Pirie urges a new approach. Instead of tinkering at the edges by trying to improve existing policies, he urges a re-think to first principles, asking in each case what are the purposes and the objectives sought. The policies derived from such an approach make a clean break with the past, setting out how Britain can be put right. Ranging across all areas of public policy, Madsen Pirie presents the radical agenda which can transform the nation from broken Britain into a dynamic society and a successful economy, one which achieves the objectives its citizens yearn for. It should be bedtime reading for those who aspire to govern Britain in the future.