The Growth Agenda

By Jasper Ostle and Mitchell Palmer

• We have ranked 14 different policy barriers to private sector growth by their possible contribution to GDP. We also propose concrete policy changes to reduce these barriers.

• Reforms to planning laws and the energy sector stand out as key enablers of private sector growth, with changes to taxes and financial regulation also able to make substantial contributions.

• We estimate that, if this suite of policy reforms were implemented in full, the government could add 10-20% to UK’s GDP (both in aggregate and per capita) over the long-term.

• This would represent an additional £428bn in output by 2036, or £5,800 per person. This would increase real household disposable income by £6,800 a year. If ⅓ of this was taxed, this would allow a tripling of the defence budget or cover 251 extra days of NHS spending.

• Summary for Policy Makers
• Executive Summary
• About the Authors
• Introduction
• Size of the Prize
• Housing and Industrial Development
• Energy
• Taxation
• Financial Services
• Additional Reform Areas
  • Labour market
  • Trade
  • Aviation
  • Digital markets
• Conclusion

Summary for Policy Makers

The UK’s economic growth since the 2008 Global Financial Crisis has severely lagged its pre-crisis trend and that of our peers. This has left GDP per capita roughly 40% lower than it could have been. The underperformance is due to the UK economy’s over-reliance on the financial sector, which was badly hit by the crisis, and a subsequent failure to adapt to the post-crisis world. We argue that outdated policies on planning, energy, and taxation are the primary barriers to growth. Implementing the proposed reforms could boost GDP per capita by 10-20%. This would improve living standards and make it affordable for the UK to meet its growing social obligations. This is crucial given the country’s looming public debt crisis.

Planning: The UK’s restrictive planning system is the single most-damaging barrier to economic growth. It continuously fails to facilitate enough residential and industrial property construction. This acute housing shortage drives up costs significantly. High housing costs cause lower productivity and create human misery. The Town and Country Planning Act 1990 (TCPA) in particular grants local planning authorities too much power to block or delay development and fosters uncertainty. An assortment of other environmental and safety rules further clog up the system.

The solution requires radical, supply-side reform. We should repeal the TCPA and replace it with a new Land Use and Development Act. This new Act would establish a consent-and-compensate model based on property rights. Landowners could build automatically as long as they compensate for external costs. This would create competitive urban land markets and accelerate development. We should also adopt complementary, smaller reforms, such as restraining the Building Safety Regulator, abolishing planning requirements like Biodiversity Net Gain, leaving the Aarhus Convention to reduce uncertainty for developers and establishing Urban Development Corporations (UDCs) in key high-growth areas.

Energy: The UK’s extraordinarily high industrial energy costs have cost us 4.25% in lost GDP growth (relative to French prices). High energy prices make the UK uncompetitive for energy-intensive manufacturing and technology companies. This is the result of a failure to build a secure, dispatchable energy supply as fast as we have retired fossil fuel capacity. Transmission limitations exacerbate the problem. Generation subsidies and levies also raise the marginal cost of electricity when gas sets the price.

A comprehensive agenda must address energy costs by focusing on supply, transmission, and pricing reform. We must end subsidies for mature technologies like wind energy. Wind now introduces price volatility and undermines the economics of necessary backup capacity, such as gas. We should introduce nodal electricity pricing. This would incentivise generation near demand and reduce expensive constraint payments. A major overhaul of the UK’s nuclear regulatory framework is also crucial to provide reliable, affordable energy in place of coal. First, we must abolish the ‘As Low as Reasonably Practicable’ (ALARP) principle that drives disproportionately high construction costs. We should also allow reactors proven to work in South Korea and France without modification. Further, abolishing Carbon Price Support would reduce bills by an estimated £1.3 billion and remove a tax that perversely discourages industrial electrification.

Finally, we should reinvigorate our domestic oil and gas industry. Existing government policy has prematurely throttled the sector. If instead we had kept pace with Norway’s production since 2010, total UK production would be 210% of current levels, creating 0.5% of extra GDP. This production is essential for national security and provides a useful counter-cyclical revenue stream for public finances. Moreover, restricting UK extraction will only have a small effect on global supply and may worsen environmental outcomes by making coal more competitive. The UK’s climate response should focus on reducing demand through the Emissions Trading System, while allowing producers to drill as much as economically viable.

Taxation: The UK’s tax system is complicated and inefficient, ranking only 32nd in the OECD on tax competitiveness. It particularly punishes those who build. A revenue-neutral reform of stamp duty, business rates, and council tax into a proportional land tax, with an exemption for low-value agricultural land and accommodations for pensioners, would reduce this bias against building. So too would allowing firms to write off investments in commercial buildings off their taxes more quickly. Finally, we should reduce the £100k tax trap that punishes aspiration and bring down the headline rate of corporation tax to encourage investment. These policies, combined with administrative efficiencies, could unlock almost 2% of extra GDP.

Finance: Since the Global Financial Crisis, business lending has become more difficult. This is driven by overly risk-averse bank regulations, which ought to be reviewed to allow banks to take responsible risks. Moreover, anti-money laundering rules have imposed substantial costs on banks, firms, and individuals. Indeed, the financial sector spends four times more on AML enforcement than the Home Office spends on all policing. Reforms to banking regulations could unlock 1.3% of extra GDP.

Other Changes: A variety of other smaller changes, such as liberalising employment laws, building a third runway at Heathrow, and repealing the UK GDPR, could unlock a further 3% of extra GDP growth.

Executive Summary

• This paper ranks 14 different policy barriers to private sector growth by their possible contribution to Gross Value Add (GVA) for the British private sector. It also proposes concrete policy changes to reduce these barriers.
• Reforms to planning laws and the energy sector stand out as key enablers of private sector growth, with changes to taxes, financial regulations, labour market rules, and trade also able to make substantial contributions.
• We estimate that, if this suite of policy reforms were implemented in full, the government could add 10-20% to UK’s GDP (both in aggregate and per capita) over the long-term.
• This would represent an additional £428bn to GDP by 2036, or an increase in per-capita output of £5,800 in 2036 nominal terms.
• We have estimated the ‘size of the prize’ for reforms to the following policy areas and made the following policy proposals:

Housing and land-use planning for industry – +7.05% to long-run GDP

• Repeal the Town and Country Planning Act 1990 and replace it with a consent-and-compensate model.
• Restrain the Building Safety Regulator.
• Abolish Biodiversity Net Gain, nutrient neutrality, and protected species requirements.
• Establish Urban Development Corporations in key areas: Lower Thames Crossing, Oxford, Bristol, and Cambridge.
• Leave the Aarhus Convention.
• Reverse impending increases to Minimum Energy Efficiency Standards.

Energy – 4.75%

• End all future subsidies for wind energy.
• Establish nodal electricity pricing.
• Abolish the windfall tax on North Sea profits.
• Restart issuing fracking and North Sea licenses.
• Abolish the ALARP principle of nuclear regulation within the Ionising Radiations Regulations 2017.
• Restrict the Office for Nuclear Regulation’s capacity to mandate nuclear reactor design amendments by
  • expanding the whitelist of countries with automatic approval for reactor designs;
  • shifting the burden of proof on mandated design changes from nuclear developers to the ONR.
• Abolish or zero-rate Carbon Price Support.

Taxation – 1.75%

• Replace business rates, Council Tax, and Stamp Duty Land Tax with a proportional land tax on land values above £8,400/acre.
• Increase the generosity of capital allowances on buildings and structures.
• Reduce the headline rate of corporation tax back to 19%..
• Remove the £100,000 tax cliff.
• Simplify the tax system by broadening the VAT base.

Financial Services – 1.31%

• Review post-crisis bank regulations to remove those that are disproportionately reducing lending to business.
• Reduce the regulatory burden of the UK’s anti-money-laundering rules.

Labour Market Reform – 0.94%

• Move to a partially at-will employment system, similar to those used in Canada and Switzerland.
• Tighten access to the pay equity regime.
• Freeze the minimum wage in nominal terms.

Trade – 0.79%

• Adopt unilateral free trade with the rest of the world.
• Enter mutual recognition agreements (or do so unilaterally) to recognise other countries’ regulations as equivalent to our own and reduce non-tariff barriers.

Aviation – 0.75%

• Continue with the approval and construction of additional runways at Heathrow and Gatwick Airports.
• Switch to market-based allocation for landing slots.

Digital Markets – 0.40%

• Repeal the UK’s General Data Protection Regulation regime.

About the Authors

Mitchell Palmer is an Economist at the Adam Smith Institute. He is the author and maintainer of the Institute’s UK Fiscal Sustainability Model.

He previously worked as a special advisor to the Deputy Prime Minister of New Zealand, whom he advised on fiscal policy and microeconomics. He has also worked in economic consulting in New Zealand and at a think tank in Singapore.

Mitchell holds a first-class degree in History and Economics from the University of Oxford. While at Oxford, he was made a Hayek Fellow of the Mont Pelerin Society. He also studied at Yale-NUS College in Singapore.

Jasper Ostle is the Head of Research and Education of the Adam Smith Institute.

Before joining the ASI, he graduated from the University of Cambridge with a first-class BA in Human, Social and Political Sciences. He specialised in comparative politics and intellectual history.

Jasper manages the public policy research of the ASI. He has contributed towards publications on sanctions, housing, energy, tax and more. He also coordinates all educational projects, including talks at schools and universities, student outreach and academic publications.

Introduction

The 2008 Global Financial Crisis (GFC) hit this country hard. If growth in the United Kingdom had kept up with its 1990-2007 trend, the average British resident would be 40% better off today. By contrast, the average American is only 12% behind where he would be if the US’s 1990-2007 trend continued. In fact, the UK’s forgone post-GFC growth is by far the largest in the English-speaking world and the G7.

This underperformance is the product of two factors. First, the British economy was uniquely financialised in 2007. Since the Glorious Revolution, the City of London has been outsized relative to the British economy. This overweighting to the financial sector was reinforced by Thatcher’s Big Bang, which set the British financial industry free to compete (and win) internationally. Thus, the sector-specific shock to the financial industry hit the United Kingdom harder than any other major economy, almost by construction. Second – and more importantly – the British economy was less able to reorient itself towards the new world order, after the crisis.

In this paper, we identify the major barriers that have held the British economy back since 2007. Many of these are old rules, but they became binding constraints only when the UK’s primary cash cow was struck down by the GFC. We find that our planning, energy, and taxation policies have been particularly damaging.

We estimate that the policy reforms outlined in this paper could unlock a 10-20% increase in GDP per capita. This would move the UK back ahead of Italy, France, and Canada in the GDP-per-capita stakes. Such a change matters for two reasons. Firstly, increasing economic output will improve the living standards of ordinary British people, who have been stuck on roughly stagnant real wages since 2007. Secondly, only a sustained increase in economic growth will make it affordable for the United Kingdom to meet the overwhelming wave of social obligations that are coming due as the population ages. As Foreboding Fiscals, this paper’s companion, lays out, on current policies and trends, Britain’s net public sector debt will rapidly become unsustainable. Growth is absolutely necessary to avoid this calamity.

In our view, the United Kingdom is ready for radical change. The parallels with the 1970s are unavoidable. An energy crisis has once again brought into stark relief this country’s gradual relative decline compared to our traditional peers. This paper represents the Adam Smith Institute’s opening bid for what a programme of reform in the 2030s might look like, paralleling the Thatcher revolution.

Some aspects of the programme may appear radical ex ante, but so too did many aspects of the successfully implemented liberalising programmes of the 1980s and 1990s. But perhaps political courage will fail us. In this case, we have also identified smaller policy changes that would still be improvements on the status quo in each policy area.

Size of the Prize

To ground this report in economic reality, we have created a ranking of the reforms that could deliver additional growth for the UK economy. Each estimate represents our best guess for the long-run uplift in GDP that could be delivered by the specific change identified. These estimates were constructed by conducting literature reviews and adapting the estimates from the literature to the UK’s circumstances; each estimate is a ceteris paribus estimate of the causal effect of the identified change. Most of the impacts identified are so-called ‘steady-state’ impacts, which may take an indeterminate amount of time to be fully realised. When a specific time horizon has to be assumed, we used 10 years.

Rank	Sector	Change	Long-term impact on GVA
1	Planning	Planning reform for housing alone that relaxes planning restrictions across the UK	6.10%
2	Energy	Energy reforms that reduce UK industrial and commercial electricity prices to the same as France	4.25%
3	Finance	Bank regulation reforms that loosen credit standards by 1 std. dev. or reduce corporate lending spreads by 1pp	1.1%
4	Planning	Planning reform for industrial development that results in a 20 per cent increase in approvals for industrial buildings	0.95%
5	Labour market reforms	Reduce the UK’s employment protection level (in the OECD index) to the same level as the United States	0.94%
6	Taxation	Abolishing stamp duty, business rates, and council tax and replacing them with a proportional land tax	0.90%
7	Trade	Adopting unilateral free trade	0.79%
8	Aviation	Building a third runway at LHR	0.75%
9	Energy	Recover the UK’s 2010 position in oil and gas production relative to Norway	0.50%
10	Taxation	Introducing neutral cost-recovery (or full expensing) for business structures	0.50%
11	Digital markets	Reversing damage of GDPR	0.40%
12	Taxation	Cutting Corporation Tax back to 19%	0.30%
13	Finance	Reforms to money laundering regulations that lower financial crimes compliance costs by 15%	0.21%
14	Taxation	Reforms to tax code that lower tax compliance costs borne by businesses by 10%	0.05%
		TOTAL GDP UPLIFT ACHIEVABLE OVER 10 YEARS	10-20%

The sum of the items identified above is 18%. We estimate that an uplift between 10-20% could be possible in reality. This large range is for two reasons. Firstly, each of the estimates in the table above is subject to substantial uncertainty. They should be interpreted as orders of magnitude rather than precise point estimates. Second, many of the policy proposals overlap in their impact. For instance, planning reform for industrial development would make it easier to build energy production and transmission infrastructure. Therefore, counting the totals for both might result in double-counting.

This identified 10-20% increase in GDP is a level shift. This is illustrated on the graph above as the vertical gap between the dotted blue ‘pre-reform trend’ for GDP and the solid orange ‘post-reform’ line at the conclusion of the reform period.¹ However, many of the identified reforms will also generate longer-run growth dividends, by increasing the dynamism of the economy. This is shown by the steeper slope of the orange ‘post-reform’ line after the end of the reform period, compared to the pre-reform trend.

Based on a forecast 2036 nominal GDP of £4.3tn, a 10% uplift would represent a £428bn addition to GDP. On a forecast population of 73.7 million, that is an increase in per-capita output (which typically translates quite closely to living standards) of £5,800 in 2036 nominal terms or £4,700 in 2025 terms.

If a third of this additional GDP was taken in tax revenue (compared to a current tax-to-GDP ratio of 39%), the government would gain £141bn in additional annual tax revenue (or £113bn in today’s money). To contextualise, this would cover:

• Twice the current annual defence budget,² or the capital cost of 27 new Queen Elizabeth-class aircraft carriers,³
• The annual employment costs for 1.97 million new Metropolitan Police constables,⁴
• 251 extra days of NHS spending,⁵ or
• Over 10,000 additional miles of flat road (each year).⁶

Much more importantly, it would also deliver the first sustained increase in household living standards – and private consumption – in decades. In 2024, UK households were able to spend (i.e., their real household disposable income was) approximately £1.8 trillion – out of a GDP of £2.9 trillion. If this ratio continued, real household disposable income would grow by £2,900 per head or £6,815 for an average household of 2.35 people. That is enough to cover an average household’s food, restaurant, and alcohol bill for more than an entire year.

Housing and Industrial Development

The UK’s restrictive planning system remains the single most-damaging barrier to growth in the economy. Simply put, the UK has continuously failed to construct enough buildings for people to live and work in. As a result, in 2024, the median house price in England was 7.7 times the median earnings of a full-time employee.⁷ English tenants spend 36% of their income on rent.⁸ The problem is most acute in London, where house prices were 11.5 times the median income in 2024.⁹ High housing costs reduce consumer spending, productivity, internal economic migration, and agglomeration benefits in the UK’s most economically productive cities.¹⁰

Despite variance in prescribed solutions, there is cross-ideological consensus on this subject: the Institute for Public Policy Research (IPPR),¹¹ the Centre for Policy Studies (CPS),¹² Onward,¹³ and the Centre for British Progress (CBP)¹⁴ have all claimed (to varying degrees) that supply-side reform to increase housing stock is vital to alleviating the housing crisis and unlocking vast swathes of the economy tied up by it.

In Cooped Up (2024), the Adam Smith Institute (ASI) quantified the cost of the housing crisis.¹⁵ Adapting a model by Chang-Tai Hsieh and Enrico Moretti (2019),¹⁶ Duncan McClements and Jason Hausenloy (2024) estimate that the damage done to GDP by the UK’s planning regulation regime on houses alone could be between 6–11.5%, depending on the inputs one chooses. It is hard to overstate just how much economic damage the constraint of housing stock has caused the UK.

Planning reform that only affected industrial development could also unlock economic growth. Our estimate, based on work from John Henneberry (2005) and his colleagues and assuming that their measured local effects can be straightforwardly aggregated into national effects, is that permitting reform that resulted in 20% more industrial planning permissions being granted could leave the economy 0.95% larger.¹⁷

Of course, regulations are not the only barrier to housing and industrial development. As a recent ASI briefing paper showed, the United Kingdom’s tax system is almost uniquely punishing for those who develop.¹⁸ For instance, British firms can only write off 39% of the cost of new industrial buildings off their taxes, compared to 49% on average in the OECD. Even worse, they cannot write off any of the cost of residential development. Another ASI paper, Boosting Brownfield (2024), showed that allowing firms to at least write off the costs for brownfield development would encourage development of unsightly ex-industrial land.¹⁹ Nonetheless, no matter how favourable the tax system is, any development must be legal before it can be incentivised. Planning and regulatory reform must remain a priority.

Substantial reforms to housing regulation and land-use planning for industry could include:

• Repealing the Town and Country Planning Act and replacing it with a new Land Use and Development Act with a consent-and-compensate model that respects property rights;
• Restraining the Building Safety Regulator;
• Abolishing Biodiversity Net Gain, nutrient neutrality, and protected species requirements;
• Establishing Urban Development Corporations in key high-growth areas;
• Leaving the Aarhus Convention, and
• Reversing impending increases to Minimum Energy Efficiency Standards.

Repeal and replace the Town and Country Planning Act 1990

Repeal

The Town and Country Planning Act (TCPA) 1947 was passed under the Attlee Administration, before being updated and repackaged under the Heath Administration in 1971 and again under the Thatcher Administration in 1990. The TCPA instituted Britain’s post-war planning regime that requires government approval for all development and construction.²⁰ The base permission to build property changed from ‘yes, but’ to ‘no, unless’.

This was a fundamental change from the Victorian model of land ownership, which saw the greatest per-capita increase in housing stock of any historical period. 4.28 million homes we built from 1856–1901, peaking at 162,000 units constructed a year.²¹ Construction was cheap and unimpeded by bureaucracy. Private housebuilding rates, controlled for population, never reached similar heights after 1947.

The nationalisation of land development rights found in the TCPA constitutes the single greatest block on housebuilding and industrial development in this country. The ability for local planning authorities (LPAs) to deny people the right to construct property on their own land is a perversion of property rights with significant economic consequences.

In an international context, the UK’s planning system is unusually discretionary. Most countries operate according to zonal planning, which affords an intrinsic right-to-build for developments that meet specific requirements in their relevant zone. The USA, France, Australia, Japan, the Netherlands, South Korea, and New Zealand all have primarily zonal or zonal-dominant hybrid land-use planning frameworks. Regulations in these zones may refer to property type (residential or commercial), density limits, foot traffic limits, and more. These systems often have discretionary avenues of influence. In contrast, the UK’s planning system is mostly discretionary. There is no right for landowners to build property without planning permission. The authority to grant planning permission is devolved to LPAs. These are arms of local government which receive and judge planning requests, grant or deny planning permission, and decide on mandatory development requirements such as Section 106 affordable housing or Community Infrastructure Levy (CIL).

The extent of discretion granted to LPAs can be found in Section 70 of the TCPA. This states that ‘[i]n dealing with an application for planning permission or permission in principle the authority shall have regard to the provisions of the development plan, so far as material to the application’.²² This decouples the development plan from the decision to grant planning permission and creates uncertainty about what could lead to the rejection of permission since ‘[t]he local planning authority is at liberty to determine what considerations are material to the decision at stake’.²³ Considerations could include biodiversity, community need, or neighbourhood character—all of which are amorphous and interpreted at the discretion of the LPA.²⁴

The discretionary nature of the UK’s planning system directly suppresses British housing stock. Michael Ball (2010) performed a quantitative study of the time taken to acquire planning permission for different development applications in one region of the UK, finding that ‘[t]he overall amount of time spent considering whether to grant building projects planning permission is substantial’.²⁵ The time spent in the application process is a time when developers are not working towards development, incurring operational costs whilst business activity is prohibited. Despite the 13-week statutory deadline for LPA planning decision-making, 68% of major developers acquiesce to a longer deadline, thus lengthening the period of operative cost as well as the uncertainty costs of the application process (outlined in following paragraphs).²⁶ Ball argues that, if his findings are representative of the entire country, ‘a major cause of the low supply price elasticity of housing in the UK may be found within the process of development control’.²⁷ Considering that ‘sites of 1,000+ dwellings take on average five years to obtain detailed planning permission’, this is likely to be (and remain) true.²⁸ The intrinsic ‘penalty’ of a discretionary planning system is thus ‘uncertainty and delay’.²⁹ This, in turn, inhibits the responsiveness of housing supply to housing demand.

A discretionary planning regime also creates unquantifiable, unseen deterrences for developers. Michael White and Philip Allmendinger (2003) note how ‘the discretionary nature of the British planning system […] increase[s] uncertainty for developers’ due to the lack of clear guidelines regarding construction amendments required for permission, such as Section 106 mandates.³⁰ This uncertainty is what Stephen Mayo and Stephen Shephard (2001) call ‘stochastic development control’, which means that developers view planning application processes as financial risks. These risks result in a higher required hurdle rate for development, meaning higher prices and fewer applications.³¹ The discretionary nature of LPAs also enables them to exert ad hoc distortions of market signals as they often try to ‘channel new housing development towards selected locations relating to’ their own objectives, such as ‘employment generation rather than housing market demands’.³² As such, the uncertainty inherent in the discretionary model of land-use planning inhibits 1) the total number of houses produced and 2) the optimal distribution of those houses.

But even more damaging than the discretionary nature of the TCPA is how LPAs exercise that discretion. New developments—both commercial and residential—are often perceived by the local, propertied electorate as threatening to their community appeal, tranquility, or property prices. The would-be residents of these new houses – or employees of these new firms – do not get a vote. Because LPAs are staffed by local councillors, they have a political incentive to restrict as much development as possible. This is reinforced by fiscal incentives. As Paul Cheshire and Christian A.L. Hilber (2008) note how the ‘the fiscal disincentive to local communities to allow commercial development’ creates inherent opposition within LPAs to allow new developments.³³

However, simply looking at the figures may suggest there is no problem with planning at all. After all, 87% of planning applications are approved, and ‘91% of major applications within 13 weeks or the agreed time’.³⁴ This gives the impression that the discretionary model is sufficiently permissive and unobstructive. But these figures do not capture what is not seen, most importantly, the projects for which permission is never sought. Moreover, they ignore compliance costs, uncertainty, the time cost of money and opportunity cost during the application process, and added demands like Section 106 affordable housing, as well as the downstream costs of these phenomena.

The UK system also couples discretionary restrictions with effective bans on certain types of development. The most prominent examples are green belts, which are greenfield land surrounding cities that cannot be built upon. The original purpose of these was to limit internal economic migration: ‘[t]he continued drift from the countryside must be arrested’.³⁵ Today, Green Belt land is justified with the mission to ‘prevent urban sprawl by keeping land permanently open’.³⁶ London, Oxford, and Cambridge are particularly affected by Green Belt land surrounding their borders.³⁷ Whilst building on Green Belt land is not impossible, it is rare, requiring special exemptions and permissions.

The impact of urban containment through Green Belt policy is to prohibit Britain’s cities from growing. This has drastic economic consequences by limiting internal economic migration and dampening agglomeration benefits and subsequent productivity gains from Britain’s best-performing economic centres.³⁸ Maurice Lange (2024) identifies three million economically productive homes (in cities and near reasonable commute lines) blocked by Green Belt land,³⁹ which simply further ‘decrease[s] housing affordability by limiting housing supply’ in Britain’s highest-performing cities.⁴⁰ Instead, people are priced out of living near their workplaces: ‘Green Belt policy imposes longer journeys that cost commuters time and money and increase pollution’.⁴¹ This is before we consider the effect on businesses and investment, whereby Green Belt restrictions ‘lead to high land prices in those areas and may result in the diversion of investment to locations less favoured by business or even the loss of prospective investment altogether’.⁴²

Lewis Silkin, Clement Attlee’s Minister for Town and Country Planning, argued that the TCPA would ensure that ‘all the land of the country is used in the best interests of the whole people’.⁴³ If this is the TCPA’s mission, then it has failed. However, it has (as one of Mr Silkin’s interlocutors apparently predicted) been ‘the most important [law] for a century’.

As a result of the TCPA, the ratio of house prices to wages in England has practically doubled since pre-war levels. Those without inherited property or below the 80th income percentile are financially precluded from home ownership. Sam Bowman, Samuel Hughes, and Ben Southwood (2024) – authors of the seminal Foundations essay – put it so:

‘The postwar housing system has underdelivered since the 1950s: the enormous improvements in housing affordability in the Victorian and Edwardian eras stalled as soon as the new system was introduced.’⁴⁴

Instead, it has created a system that subordinates property rights to the whims of government caution and local opposition, skyrocketing house prices in the process. It has favoured the propertied class at the expense of renters and young people. It has deterred the construction of housing that would increase the supply that decreases prices and rents. Britain is short 4.3–6.5 million homes, minimum.⁴⁵ Fundamentally, it is this shortage that underlies Britain’s housing crisis and all its downstream economic consequences. Most of the blame for this lands squarely with the TCPA.

Replace

The TCPA should be replaced by a new Land Use and Development Act that lets landowners build, so long as they are mindful of (and internalise the cost of) the external costs of their activities. In a future report, we will lay out a detailed possible design for this Act. But its key objective would be to establish competitive urban land markets and to manage external costs by allowing the Coase Theorem to work where it can and substituting for it where it cannot.

The Coase Theorem posits that, so long as property rights are clearly defined and transaction costs are low, externalities can be efficiently managed by mutual negotiation.⁴⁶ As Coase himself later put it: ‘The law of property determines who owns something, but the market determines how it will be used’.⁴⁷ Many so-called ‘land use disputes’ can easily fall into this category, so long as the legislation is clear on who has the property right and is designed to ease negotiations. Where conflicts cannot be easily resolved, a model based on compulsory purchase (complete with judicially-determined compensation) could step in. In essence, almost all development would be permitted, so long as the developer was willing to compensate others for the costs imposed on them. For the most offensive developments, these costs would clearly make them unprofitable.

Perhaps the most common ‘external cost’ of development is increased pressure on communal infrastructure: roads, streetlights, and more. These would be paid for via the Community Infrastructure Levy (which is already in the TCPA and should remain in a Land Use and Development Act) or by another levy designed to avoid ‘impact fees’ on developers, such as a Mello-Roos-style system of financial obligation of future landowners dependent on said infrastructure.⁴⁸

For the most precious pieces of natural landscape or architectural beauty, such as national parks, bespoke legislative protection could be added. Alternatively, such land could be made subject to covenants, which could not be overridden by the consent-and-compensate model. Indeed, the Land Use and Development Act should explicitly contemplate and accommodate binding land covenants. Crucially, however, these should be negotiable and where the costs of maintaining these outweigh the benefits, able to be set aside.

The Land Use and Development Act would operate differently than the current TCPA. Instead of LPAs controlling planning permission, land owners and developers would be able to build property automatically. The property itself would be regulated according to standards that protect neighbours’ property rights. This would enable much greater rates of housebuilding without significantly compromising on the quality of property being created.

This new framework would enable and speed up housebuilding by liberalising planning laws. We already know that the primary cause of Britain’s extortionate house and rent prices is lack of supply. We know that liberalising planning laws leads to greater housebuilding. Therefore, restoring property rights would lead to a greater volume of housebuilding.

Moreover, it would ensure a competitive land market.⁴⁹ Land has value to the extent to which it 1) has planning permission and 2) the surrounding area renders that plot attractive. In a dynamic land market, developers have to build property quickly such that their potential gains are realised before another developer builds on a nearby plot and satisfies local housing demand there. Currently, the fact that it takes months to years for planning permission to be granted allows developers to ‘land bank’, accruing value from their undeveloped land with little fear that others will meet demand—a scenario which yields little housebuilding. This is especially true in cities like London with high housing demand and high land value. A permissive, property-regulation-based planning system would accelerate the pipeline of land acquisition to development, thus rendering the land market competitive and incentivising housebuilding at pace.

A note on political feasibility

Repealing the TCPA in its entirety may seem like a pipe dream. It is certainly a stretch goal. But countries have radically reformed their planning systems before. For instance, New Zealand recently repealed its Resource Management Act 1991 and replaced it with a new model based on property rights, which will almost halve the number of planning applications and approvals needed.⁵⁰ The RMA itself was a wholesale (but, in that case, bad) replacement for a Town and Country Planning Act, modelled on the UK system, that represented a total paradigm shift in land-use regulation towards a new ‘sustainable management’ concept.⁵¹ Similarly, the Florida State Legislature recently passed a bill entirely overriding local planning discretion when a housing development featured sufficient affordable housing.⁵² Rhode Island, Tennessee, Washington, and Montana have also all adopted legislation sharply restricting the grounds on which municipalities can reject planning applications.⁵³ Even the creation of the TCPA itself – done amidst a post-war recovery and a programme of economic transformation peerless in modern British history – demonstrates the possibility of radical planning reform.

If the total repeal of the TCPA were unpalatable, any moves towards increased permissiveness would be welcome. One obvious change would be to remove the ability for the local authorities to object to development that is contemplated in their local plan. Changes such as the government’s recently announced ‘default-yes’ for development near train stations are also welcome. Nonetheless, any reform will need real teeth to ensure that councils actually comply with their intent.⁵⁴

Restrain the Building Safety Regulator

The Building Safety Regulator (BSR) was created under the Building Safety Act 2022 in response to the 72 lives lost in the Grenfell Tower tragedy. Its purpose is to regulate High Rise Buildings (HRBs) to ensure they comply with safety standards. It is required to approve all buildings above seven storeys, or containing more than one residential unit.

Whilst its goals and history are noble, it is undeniable that the BSR’s regulatory burden is slowing down the rate of house-building. Since the BSR came into effect in 2023 the number of HRBs granted permission to construct has declined to near-zero, whilst applications have increased. This is down from a non-COVID high of over 100 permissions granted for HRBs in 2015.⁵⁵ This is likely due to the BSR’s 18-month wait times for approval, multi-stage regulatory inspection process, unclear compliance criteria, ‘lack of built environment expertise’, and opaque assessment process.⁵⁶

Gateway 2 of the BSR’s pre-construction assessment stage seems to be a particularly strong impediment to house-building. Despite the rate of consents to Build to Rent (BTR) schemes increasing by 18% since 2024, starts to BTR construction have fallen by 47% over the same time period.⁵⁷ Multiple high-rise developers have gone insolvent as their projects were held alongside another 90+ in the BSR’s Gateway 2 backlog.⁵⁸

Restraining and streamlining the BSR’s regulatory process is necessary to ensure that high-rise buildings can still be built. Obvious changes that should be made include 1) publishing all HRB compliance regulations in one information source (for greater clarity), 2) stricter commitments to review deadlines, and 3) aligning Gateway 3 compliance criteria (which only has an 18% success rate) with Stages 6 and 7 of the Royal Institute of British Architects’ Plan of Work.⁵⁹

Abolish Biodiversity Net Gain, nutrient neutrality, and protected species requirements

Under the Environment Act 2021, housing developers are required to outline mandatory construction features by which each housing development increases the diversity of animal and insect species around the development by 10%. This is the Biodiversity Net Gain (BNG) rule, which became mandatory for all prospective housing sites from 2024.

‘Nutrient neutrality’ is a planning requirement whereby planning authorities are required to assess the impact of prospective housing developments on soil and water nutrient balance, mostly nitrogen and phosphorus. Planning authorities are required to assess prospective nutrient impacts of prospective housing developments along protected water catchment areas, such as the Rivers Wye and Tees, the Solent, the Norfolk Broads, and the Somerset Levels. This is not optional: ‘the Law requires that planning permission can only be given for developments in these areas where a Habitats Regulations Assessment […] demonstrates a neutral impact on current nutrient levels in the catchment’.⁶⁰

If a housing development is suspected to proceed in a space inhabited by a protected species, they are required to apply for a mitigation license. Protected species include bats, badgers, great crested newts, certain fungi and lichen, and more. The process of complaint and investigation of species present in the land delays construction and increases cost.

These environmental planning regulations, both individually and combined, serve to obstruct housebuilding by increasing application and development costs. Nutrient neutrality laws blocked at least 145,000 homes (circa 2023),⁶¹ despite the fact that housing affects only <5% of nitrate and phosphate loads in water catchments (the rest being from water infrastructure and agricultural run-off).⁶²

The BNG rule caused delays for 92% of developers (according to a survey by the Home Builders Federation).⁶³ It also increases development and planning costs, further reducing house-building rates:

‘Developers are expected to make financial and spatial provisions for biodiversity improvements, which can translate into higher land acquisition costs, the need for specialised ecological expertise, and increased delays in securing planning permission.’⁶⁴

Protected species regulation’s impact on house-building rates is hard to quantify, as the discovery of a protected species (as well as the investigation process of attaining this information) is itself the cost, and can be cited by local residents to delay construction projects. Nonetheless, 129 housing developments were delayed due to the presence of great crested newts alone between 2017–22.⁶⁵

There are other environmental regulations that continue to obstruct housebuilding. These include other regulations that fall within the Habitat Regulations 2017, legislated under European Union (EU) directives that (amongst other things) creates Special Areas of Conservation that obstruct development. Another obstructive government provision is Environmental Impact Assessments, which are mandatory for all developments over 150 units. In water-stressed regions, ‘water efficiency’ of 110 litres per person per day is mandated for buildings; demand for water is being managed at the expense of developers, rather than simply building more reservoirs.⁶⁶ The impact of these regulations, boiled down to brass tacks, is to simply increase cost and difficulty of housebuilding.

There are three arguments in favour of abolishing these requirements. The first is that most of Britain’s environment will not be affected. The second is that these regulations underestimate the adaptability of ecosystems. Species have adapted to habitat changes throughout history; it is unclear that housing and infrastructure development is an insurmountable hurdle. The third reason is that, even if species and certain parts of the environment do incur harm, that harm is the trade-off paid for greater housing affordability for humans. We place primacy on anthropocentric utility.

Abolishing these requirements will increase the rate of housebuilding significantly. Whilst environmental protection is an important function of the state, it should be noted that 90% of England remains untouched by development.⁶⁷ This provides a substantial margin for error before nature is truly threatened. Moreover, environmental concerns must be measured against anthropocentric utility. Currently, the balance tips too much in favour of the former against the latter. Alleviating developers of these environmental constraints would serve to rebalance this.

However, there is a noteworthy barrier to repealing these regulations: the non-regression clause of the UK-EU Trade and Cooperation Agreement (TCA). This means that the EU could impose trade tariffs on the UK, should the EU Commission find repealing the Habitat Regulations to breach the ‘level playing field’ provision of Title XI of the TCA.⁶⁸ There is also a binding UK commitment to not repeal these regulations. Specifically, Article 391 of the TCA states that:

‘A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its environmental levels of protection or its climate level of protection below the levels that are in place at the end of the transition period, including by failing to effectively enforce its environmental law or climate level of protection.’⁶⁹

The likely EU response—which could include the imposition of trade barriers—depends on to what extent environmental regulation on property development negatively impacts EU trade. The answer is a soft ‘yes’. Reducing compliance costs on infrastructure would make the UK a more attractive place than the EU to, for example, build a data centre. Perhaps signing away the UK’s ability to acquire any form of comparative regulatory advantage was not optimal.

UK policy should clearly be to negotiate away sanctions should the EU Commission actually levy them. However, even in a worst-case scenario where sanctions are imposed, we would still recommend the abolition of these environmental regulations. Full-fat housing reform, of which this would be a part, would still be deeply positive for the British economy and population even with the added cost the EU would impose.

Establish Urban Development Corporations in key areas: Lower Thames Crossing, Oxford, Bristol, and Cambridge

Urban Development Corporations (UDCs) were created under the Local Government, Planning and Land Act 1980 with the objective of regenerating targeted areas of the UK. They are appointed boards with established powers over land acquisition, infrastructure development, and planning authority within their jurisdiction. UDCs can be established across designated regions by the Secretary of State for Housing, Communities and Local Government via Statutory Instrument. They are centrally funded by the government.

The purpose of UDCs was to create private governance bodies with special powers to bypass local authorities and regulations to regenerate specific areas by using their regulatory bypasses to attract private investment to their regions. They proved highly successful. UDCs were responsible for the historic rejuvenation of, most notably, the London Docklands and Canary Wharf, as well as Liverpool and Manchester, in the 1980s and 1990s.

Whilst their legacy is contested,⁷⁰ UDCs have a proven record of effectively attracting private investment. Richard Caborn, Tony Blair’s Minister for the Regions, Regeneration and Planning, noted that every £1 of public funding for UDC’s attracted roughly £3.80 of private investment.⁷¹ The London Docklands Development Corporation achieved a grant-in-aid to private investment ratio of 1:4.⁷² Their ability to bypass planning regulation and local authority blockage proved pivotal in their success, as developers saw UDCs as more effective vehicles for converting capital investment into development compared to local planning authorities. By selectively bypassing local consultation, UDCs ‘can achieve volumes of housebuilding which far exceed the scale of development which would occur otherwise’.⁷³

Reviving the UDC model could prove to be a cost-efficient means of strategically bolstering housing supply in key areas. A Thames Gateway Development Corporation, stretching along southeast London and north Kent, could facilitate the construction of 163,000 homes in places like Dagenham.⁷⁴ Similarly, a UDC in Bristol – one of the UK’s best-performing economic centres – could add ~60,000 homes in the north of Bristol alone.⁷⁵ UDCs in Oxford and Cambridge would go far to help realise the government’s correct vision of empowering the Oxford-Cambridge Arc, and the £78 billion in GDP that would come from it.⁷⁶ This would be particularly fruitful in delivering much-needed laboratory and science facilities of which there is a chronic and obvious >82% shortage,⁷⁷ providing a significant uplift to the UK’s life sciences sector at risk of decline.⁷⁸

In aggregate, UDCs constitute a powerful tool of statecraft to increase the UK’s housing supply. However, the Government should avoid the ‘Locally-led Development Corporation’ model floated in 2024, whereby a coalition of local councils administer a UDC rather than a government minister.⁷⁹ This evolution would undermine the key strength of UDCs—to bypass local stakeholders with obstructive interests.

Leave the Aarhus Convention

The Aarhus Convention is a binding international agreement on environmental protection ratified by the UK in 2005. The function of the Aarhus Convention is that it ‘grants the public rights and imposes on Parties and public authorities obligations regarding access to information and public participation and access to justice’.⁸⁰ The ‘access to justice’ provision is implemented by the Environmental Cost Protection Regime (ECPR), which rules that liability costs for claimants bringing forward Aarhus-relevant judicial reviews are fixed ‘at £5,000 for individuals and £10,000 for organisations’.⁸¹ The ECPR cost cap for claimants can only be departed from if a court deems that ‘to do so would not make the costs of the proceedings prohibitively expensive’,⁸² which involves a financial assessment of the claimant.

The Aarhus Convention, despite being an environmental agreement, affects planning judicial reviews. Indeed, the ECPR applies ‘to almost every type of planning based claim including claims involving a challenge to the application of a development plan as well as the application of policies to a particular planning dispute’.⁸³ The ECPR’s cost cap for claimants in planning judicial reviews is found in British case law, specifically Venn v. SSCLG [2014] EWCA Civ. 1539.⁸⁴ In ‘a broader interpretation’ of this case,

‘a challenge to a planning decision under section 70(2) of the 1990 Town and Country Planning Act could potentially fall within the Aarhus Convention cost cap because planning law, though not exclusively environmental, implements environmental protection through policies.’⁸⁵

The impact of the ECPR’s coverage of planning judicial reviews is that it greatly empowers local residents and environmental organisations to legally challenge and delay housing developments in their vicinity. Win or lose, developers incur costs no matter the outcome of said reviews: uncapped judicial costs, delayed delivery timelines, material stagnation, carry-over labour costs, and more. This also applies to industrial land-use and even government infrastructure, although nationally significant projects are to become increasingly exempt from such challenges.

It should be noted that the proportion of planning judicial review challenges relative to approved developments is small. There were only 201 planning judicial reviews in 2023,⁸⁶ whilst 10,527 development sites were granted planning permission in the same year.⁸⁷

The problem with ECPR coverage of planning judicial reviews is not necessarily their quantity, but rather the uncertainty that it adds to the planning permission process, and the unquantifiable delays (and downstream costs) that this can hoist upon housebuilders. It is a significant risk: ‘[t]he stretching of timescales is one of the major contributory factors to increasing costs on projects subject to judicial reviews, and can severely damage the developer’s profit margins’.⁸⁸ So much so that an entirely new field of insurance, judicial review indemnity policy, is becoming increasingly popular amongst housebuilders.⁸⁹

Developers have noted how the ECPR’s empowerment of planning judicial review challenges contributes to ‘how incredibly slow and uncertain our regulatory system has become’.⁹⁰ Probability neglect and risk-aversion biases compound the deterrence; whilst the risk is low, the potential cost is high, thus increasing caution and delay amongst developers. Gabriel Moberg and David Lawrence (2024) of the Centre for British Progress have also correlated the cost-capping of planning judicial reviews with the obstruction of housebuilding, such as in Eddington, northwest Cambridge.⁹¹

The financial ease of filing planning judicial reviews contributes to the uncertainty with which developers operate and price in development costs, thus deterring developers from endeavouring to build houses. Unquantifiable costs greatly deter business activity. It is this Damoclean risk of runaway judicial and delay costs incurred from planning judicial reviews that invokes undue caution in housing developers; caution that decreases the quantity of housebuilding in the UK. As such, we believe industry spokespeople when they say that planning judicial reviews constitute a significant delaying and cost-increasing force for housing developers.⁹²

We accept Lord Banner’s legal judgement that abolition of the ECPR scheme for planning judicial review cannot be achieved without leaving the Aarhus Convention.⁹³ As such, with no other option of reforming the ECPR scheme, we advocate for leaving the Aarhus Convention.

It should be noted that, should we leave the Aarhus Convention, British citizens’ ‘access to [environmental] justice’ would not be unduly eroded. The Criminal Justice and Courts Act 2015 instituted the cost capping order (CCO) regime, whereby claimants’ judicial costs can be capped for ‘public interest proceedings’ according to financial capacity.⁹⁴ Leaving the Aarhus Convention and abolishing the ECPR scheme would not strip Britons of their judicial rights. It would simply equalise claimants’ cost balances of planning judicial reviews with reviews pertaining to other topics of public interest.

Access to justice remains a vital protection in a liberal democracy. However, this has to be balanced against reasonable access to housing. Unfortunately, the Aarhus Convention – in the context of the UK’s housing crisis – puts these two rights in conflict. In the context of the provision of CCOs, we believe leaving the Aarhus Convention would not wrongly deprive British citizens of access to justice. Rather, it would stop planning and environmental judicial reviews from being disproportionately empowered at the expense of developers, the housing market, and renters.

Reverse impending increases to Minimum Energy Efficiency Standards

Environmental Protection Certificates (EPCs) are government-mandated rankings of a property’s energy efficiency ranging from A (best) to G (worst). EPCs are granted according to standardised assessments measuring insulation, heating mechanisms, types of windows, and more. Crucially, EPCs are required when ‘selling a property, renting out a property, [or] building a new property’.⁹⁵ Some properties, such as holiday lets or listed buildings, are exempt from this requirement.

EPCs are not, in and of themselves, a bad idea. They reduce the information asymmetry inherent in prospective tenants and homebuyers not being able to see through and inside walls and judge the likely energy efficiency of a building in advance.

However, the government uses EPCs as a metric to require properties to meet Minimum Energy Efficiency Standards (MEES).⁹⁶ These EPC minima differ between residential and commercial properties. As of 2025, all new residential properties for let must be rated C or above by 2030.⁹⁷ By 2030, commercial properties must achieve EPC rating B.⁹⁸ A majority of existing homes have a rating below D today.⁹⁹ 96% of commercial properties in London (15% of total UK commercial property and 36% of total value)¹⁰⁰ are EPC rating C or below (circa 2023).¹⁰¹

The primary impact of this is that it increases the cost of housebuilding. The average cost of increasing a residential property to EPC rating C is £9,260.¹⁰² Whilst retrofitting a current property is much more expensive than building a new property to meet EPC rating C, this cost illustrates the possible scale of added cost. The typical average cost of building a new house is £242,000.¹⁰³ As such, the impending MEES increase for residential properties could add up to 3.8% to the cost.

The average cost of retrofitting commercial property in London from EPC rating D to B varies according to different sources, which range between £36–£65/sqft¹⁰⁴ and £113/sqft.¹⁰⁵ Note the average cost of building new commercial property in London is £318/sqft.¹⁰⁶ As such, impending MEES increases for commercial property in the worst case could increase construction costs in London by somewhere between 11.3% and 35.5%.

In all likelihood, the actual added costs on construction will not be this high. Comparative studies of the effects of energy efficiency mandates on construction costs yield lower figures. In Turkey, ‘the additional construction cost was found to be 7.43% and 9.43%’ for energy efficiency ratings of ‘gold and platinum certified building respectively’.¹⁰⁷ In Canada, ‘the construction costs of LEED buildings are increased by approximately 3.8% more than non-LEED buildings’.¹⁰⁸ We cannot necessarily apply these costs – which occurred in different markets and from complying with different standards – to the UK. Nonetheless, even if retrofitting is five times more expensive than new build procedure, that could still amount to as high as 7% increase in commercial new build cost. This does not help with increasing the supply of commercial property in London.

The government predicts that increasing the MEES for residential properties to EPC rating C will save tenants £240 a year on their energy bill.¹⁰⁹ This may well be true in isolation. However, the cost on property owners is predicted to be £15 billion.¹¹⁰ Exactly how the energy savings and higher costs will be incident on landlords and tenants depends on the exact structure of the rental market. But there is a strong risk that landlords will both pass on some of the additional costs and/or offset the lower energy costs through higher rents.

The MEES increase for residential properties is meant as a step towards the UK’s carbon emissions strategy towards ‘net zero’.¹¹¹ However, the UK already has in place a suite of carbon taxes, such as the Emissions Trading Scheme and Climate Change Levy, which more efficiently account for the social cost of fossil fuels and disincentivise inefficient energy use.¹¹² Further regulation at the point of consumption is unnecessary; standardising household energy consumption VAT rates would be less distortionary. The MEES increases are thus an example of everythingism; using housing policy to do climate policy, at the expense of the former.¹¹³

Housing policy should not be a vehicle for climate policy. The consequence of the impending MEES increases is to increase the cost of building. This applies especially to London commercial property, which could see up to a 30% increase in construction costs. The downstream suppression of economic agglomeration benefits would be significant.

Energy

The UK has the highest industrial energy costs in Europe.¹¹⁴ This cost has approximately tripled in nominal terms since 2004.¹¹⁵ Based on work from Hillard Huntington and Brantley Liddle (2022), we estimate that these high industrial energy prices (relative to France) have cost the UK ~4.25% in lost GDP growth.¹¹⁶

There are very few countries with high energy prices and high economic growth.¹¹⁷ Higher energy costs price out technology and manufacturing companies from operating in the UK. This period of rising energy prices has presided over a concurrent decline in the energy-intensive manufacturing industries (from automobiles to chemicals) from 17% of total GDP output in 1990 to about 9% today. The chemicals industry – the UK’s second-largest export and once a global industry the UK led, on account of its complexity – cites untenable energy prices as contributing to its impending ‘extinction’.¹¹⁸

The question of ‘why is energy so expensive now?’ has contested answers, but a lack of secure, dispatchable supply must play a role. In essence, the UK has closed its fossil fuel baseload and dispatchable capacity faster than its regulatory regimes have allowed for the construction of equivalent capacity from green sources. This especially applies to nuclear energy, which has seen a 60% reduction in energy output since 1998.¹¹⁹ Intermittent supplies from wind fill the gap sometimes, but they cannot be relied upon.

Network costs (transmission and distribution of electricity across the Grid, associated construction and upkeep costs, and lost current from resistance along transmission infrastructure) made up >20% of the cost of electricity bills in 2024.¹²⁰ However, transmission investment regulation – set by OFGEM – is deemed by energy industry leaders as ‘not commensurate with globally competitive market rates [or] robust market evidence’.¹²¹ Transmission and storage limitations increase costs: ‘[w]e are having to pay wind to turn off in Scotland, costing us this year probably north of £1.5 billion, because we do not have enough transmission lines to send it to where it can be used’.¹²²

Generation subsidies and levies, such as the UK Emissions Trading Scheme and Carbon Price Support, make up a similar proportion of cost and now primarily ‘raise the marginal cost of electricity when gas is on the margin’.¹²³ Having banned fracking and undermined the business case for North Sea oil and gas extraction, the UK now imports 50–63% of the gas it uses, which also means high gas prices now have a strongly negative effect on our balance of payments.¹²⁴

The cost of electricity is thus a complex problem comprising supply, transmission, pricing, and subsidy areas. Nonetheless, there are serious, supply-side, deregulatory, and market-based solutions that would reduce costs whilst fostering energy sovereignty. They also need not doom our environmental ambitions, though they may need to be tempered. These include:

• Ending the subsidies for wind energy;
• Introducing nodal electricity pricing;
• Abolishing the ‘as low as reasonably possible’ rule for nuclear regulation;
• Restricting the Office for Nuclear Regulation’s interference in nuclear construction;
• Abolishing Carbon Price Support; and
• Removing restrictions on fracking and oil and gas production in the North Sea.

Stop subsidising wind energy

The electricity market is peculiar in that the quantity supplied must always equal the quantity demanded, at every instant and in every location. Without expensive batteries or pumped hydro storage, electricity cannot be stockpiled. It can be moved, but only if sufficient line capacity exists. The cost of failure is immense. If supply does not exactly meet demand – even for just a few seconds – rolling nationwide blackouts could result. As such, the electricity market is designed to always meet these constraints, ideally in the most cost-effective way possible.

Before the rise of intermittent renewables, this was not an issue. Expensive-to-build but cheap-to-run baseload generators, such as coal and nuclear power stations, would provide a continuous supply that could meet minimum demand – say at 2am during a summer weekend. For demand above this level, combined-cycle gas power stations would step in because their fuel was more expensive but the generators were cheaper. Finally, for the very peak of electricity demand (say half-time of an England v Scotland World Cup football match in the middle of winter), cheap-but-fuel-inefficient diesel generators or gas peakers might provide the last unit. Pumped hydro might also step in. Because demand was largely predictable, it was possible to optimise the power system by building exactly the right generation in exactly the right places. This could be done by a monopoly utility undertaking a lowest-cost generation expansion plan (LCGEP), but a competitive electricity market would also reach the same conclusion along with a variety of other advantages (such as stronger cost-containment incentives).¹²⁵

This simple picture is complicated by the existence of so-called ‘intermittent’ renewables, such as wind and solar energy. Unfortunately, we cannot choose when or where the wind blows. But when it is available, wind power has no fuel cost and therefore displaces generation with non-zero marginal costs. Thus, it adds an additional layer of uncertainty to power investment.

As wind grows as a share of output, it also starts to undermine the economics of the rest of the market. When wind is only 10% of generation it can usually be easily replaced if it is not available, unless it happens to be at the very peak of power demand. However, as it grows, replacing it would not be so easy. Instead, dispatchable capacity will need to be available to back it up.¹²⁶ Gas is usually the best option for this. This means that – in the absence of affordable batteries or pumped hydro – wind dominance effectively guarantees an ongoing place for gas in the power mix. Unfortunately, with wind under-bidding gas whenever it is available, it also makes each megawatt-hour produced by those gas power stations more expensive. This is because gas operators will need to recover their fixed costs from an ever-smaller number of operating periods or the capacity market. The result may be hyper-volatile electricity prices. When wind is the marginal dispatched power source, prices will be effectively zero – if not negative (depending on the subsidy structure). When it is not, then prices could be much higher than the short-run marginal cost of gas.

Gas operators may also – or instead – seek support from the capacity market, which pays plants simply for being there, rather than for producing energy. As the number of operating periods that the plants are in use falls, they will demand ever-larger capacity payments to contribute to their fixed costs. This can already be seen in the results of past capacity market auctions, where the clearing price per kW of capacity and the total cost of the market are increasing. By 2028/29, billpayers will be paying operators more than £3 billion just to keep their plants operating.¹²⁷

This volatility is not, in and of itself, a bad thing. Even well-designed, relatively unsubsidised power markets, such as New Zealand and Texas, are beginning to experience much more volatile power prices. Power consumers, including large industrial concerns, can easily smooth out the peaks and troughs by entering into hedge contracts. Similarly, a capacity market is not an inherently bad idea, as a solution to prevent electricity shortages without spot prices that are unpalatably high.¹²⁸ Nonetheless, it is an unusual choice by the Government to continue to subsidise – in the name of energy affordability, security, and sustainability – a power source that effectively requires the continuous availability of natural gas power and makes that power more expensive.

Moreover, because the UK’s strongest winds are to be found in Scotland – which has little demand for additional electricity and limited transmission capacity to the demand centres of the South – much of this ‘cheap’ wind power will be wasted.¹²⁹

Thus, the case for continuing to subsidise wind electricity is very weak. Britain already has enough. As wind makes up an increasing share of the UK’s generation, each additional wind turbine offers little additional environmental benefit and much additional price volatility – whether experienced directly by billpayers or hedged through the Capacity Market.

Introduce nodal electricity pricing

Compounding the problems of wind dominance is the old-fashioned design of the electricity market in Great Britain. Under the national pricing system, every consumer and generator faces the same wholesale price, no matter their location. However, moving electricity from wind-rich Scotland to the power-hungry South of England is not free. It requires expensive transmission infrastructure.

At present, when the lines are overloaded, the system operator pays generators for electricity that is produced but cannot be transmitted. These constraint payments may cost billpayers more than £8 billion by 2030, as the problem only worsens. Already in 2024, Scotland’s largest wind farm received such payments 71% of the time.¹³⁰ Perversely, these payments further blunt the incentive for generators to locate their generation near to demand centres. Equally, large-scale electricity users have little incentive to locate their demand close to generators.

A more sensible electricity pricing system would confront users and generators with the real costs of their location choices. That would encourage them (respectively) to build demand in areas with a surplus of electricity and supply in areas with a shortage. Sophisticated electricity markets in the United States, New Zealand, and Singapore deliver these market signals through nodal prices that incorporate supply and demand dynamics, as well as transmission constraints, at thousands of different points in the transmission network.

A switch to nodal pricing or even regional pricing was ruled out by the Secretary of State for Energy Security and Net Zero, Ed Miliband, earlier this year. Regional prices would not deliver the textbook optimality of nodal prices, but they would be an improvement on the status quo. Those American markets that have switched to nodal pricing have seen much more efficient use of their transmission grids.¹³¹ This frees up the grid operator to work on delivering even more additional capacity. The Government should re-visit this decision and switch to nodal pricing quickly, to ensure that it can have an impact on short-term investment decisions.

Fix the UK’s nuclear regulations

If, as recommended, the government were to abandon its wind-heavy energy strategy, the market would have to find relatively clean, affordable electricity from elsewhere. Nuclear energy is an obvious candidate. Unfortunately, the UK’s nuclear regulations are deeply broken.

In November 2025, the Nuclear Regulatory Review was published. Spearheaded by John Fingleton, it constitutes one of the most serious and measured treatments of the UK’s nuclear energy policy. Its recommendations touch on the core issues of this policy sector: ‘risk aversion’, ‘process over outcomes’, and ‘lack of incentives’.¹³² The Review advocates for 47 policy recommendations to solve these issues. We believe implementing all of these measures in full would constitute a vital upgrade of the UK’s nuclear sector. Nonetheless, below are two proposals that we believe are of especial importance.

Abolish the ‘As Low as Reasonably Practical’ principle and codify Relevant Good Practice

The Office for Nuclear Regulation (ONR) regulates all non-military nuclear activities in the UK. When an energy company wants to build a nuclear plant, it is the ONR that determines their compliance with regulatory standards.

The ONR is empowered by the Energy Act 2013 to enforce regulations under the Health and Safety at Work etc. Act 1974 (HSWA). A statutory instrument under the HSWA is the Ionising Radiations Regulations 2017 (IRR17), which mandates the ‘as low as reasonably practicable’ (ALARP) model of nuclear radiation risk reduction for employees and the general public.¹³³

ALARP is a ‘non-prescriptive’ regulatory framework which ‘involves weighing a risk against the trouble, time and money needed to control it’. As such, the ALARP principle determines the process of building a nuclear reactor to be ‘not one of balancing the costs and benefits of measures but, rather, of adopting measures except where they are ruled out because they involve grossly disproportionate sacrifices’.¹³⁴

ALARP is a regulatory principle held by many countries. However, as science and technology in physics, biology and the nuclear industry has evolved the utility of the ALARP principle has eroded.

‘As low as reasonably achievable [practicable]’ is not a generic phrase, but a specific principle in the history of nuclear science. Between the 1940s and 1960s, radiologists were researching the impact of ionising radiation on rates of genetic mutation. Whilst not consensus, the prevailing view at the time was informed by the ‘Linear No Threshold [LNT] view that all ionizing radiation causes harm to humans’.¹³⁵ In the 1970s, this was assessed by American legislators in the wake of transparency and institutional-cultural concerns with the Atomic Energy Commission. They concluded that no risk to human life is tolerable in exchange for efficiency gains. ‘ALARP’ was the fusion of these two principles: LNT and zero-risk tolerance.

Cytogenetic studies in DNA repair began to challenge the LNT principle. A 2005 report by the French National Academy of Medicine ‘expressed “doubts on the validity of using LNT for evaluating the carcinogenic risk of low doses (<100 mSv) and even more for very low doses (<10 mSv)”’.¹³⁶ John Fingleton also notes how ‘the reality of radiation exposure is more complex’ than LNT affirms, especially at small doses.¹³⁷ The U.S. Department of Energy is also rumoured to be considering the replacement of ALARA (their equivalent of ALARP) with a model of dose limits.¹³⁸ Scientific judgement on clear probable increases in the likelihood of developing cancer from radiation exposure below 100mSv is evolving.

ALARP is used to govern the obligation to introduce risk reduction measures (RRMs). The way it is applied is quantified through the Tolerability of Risk Carrot Diagram. There are two limits: Baseline Safety Limit (BSL) and Baseline Safety Objective (BSO). BSL is defined as 20mSv of radiation exposure per year for workers (or 100mSv across five years) and 1mSv of annual added public radiation exposure. BSO is 1mSv/year for workers and 0.02mSv/year for public exposure. Another way of quantifying these limits is through annual individual risk of fatality. BSL is 1×10-3 for workers and 1×10-4 for the public. For context, the top-line BSL for workers is such that one death would be expected every one thousand years. BSO is 1×10-6 for all individuals.¹³⁹ The conversion rate between dosage and fatality risk is called the Risk Coefficient, defined by the International Commission on Radiological Protection to be 1Sv = ~5% fatality risk.¹⁴⁰

Operation above BSL is illegal at any point; if a reactor breaches the 20mSv/year (worker) or 1mSv/year (background) limits, the operator must close the reactor and explain itself. Reactors operating between BSL and BSO will be compelled by the ONR to implement RRMs, as will those operating below BSO (but the governing exception principles are different, as outlined below).

Figure modified from Health and Safety Executive, Tolerability of Risk Carrot Diagram¹⁴¹

Reactors are only exempt from implementing ALARP-motivated RRMs if they can demonstrate the cost:benefit ratio falls under Gross Disproportion (GD). Here, the difference between BSL and BSO territory is the rate of GD that needs to be demonstrated. For example, a reactor operating near BSL may have a GD factor of eight. This means that reactor can only be exempt from implementing an RRM if they can demonstrate the cost of said measure is greater than eight times the social benefit. The GD function decreases as one gets closer to BSO. For example, if a reactor operating at 19mSv/year of worker exposure has a GD factor of nine, a reactor operating at 8mSv/year could have a GD factor of four. However, the GD never reaches one, at which point exemption cost would equal social benefit.

The calculation of exemption from RRM ALARP obligations changes for reactors operating at or below BSO level. Deemed ‘broadly tolerable risk’, when reactors operate at this level ‘the ALARP demonstration may be based on adherence to codes, standards and established good practice. However, these must be shown to be up-to-date and relevant to the operations in question’.¹⁴² The ‘codes’ in question refer to Relevant Good Practice (RGP), a specific term in nuclear energy policy.¹⁴³

As such, ALARP exemption works as follows: the lower down the Carrot Diagram one goes, the lower the GD factor is. However, the GD factor never reaches one, at which point exemption cost would equal social benefit.¹⁴⁴ At or below BSO, RGP becomes the guiding principle of ALARP-mandated RRM obligations.

Today, the consequence of the UK’s application of ALARP-style regulation is to maximise the cost of construction beyond the point of reasonable safety. For example, ‘EDF restricts worker radiation exposure to 10 millisieverts a year’.¹⁴⁵ This is despite the BSL statutory radiation dosage limit in IRR17 being 20mSv per year. Nonetheless, EDF aims for half its statutory limit due to its obligation to abide by ALARP principles, likely at greater cost than they would otherwise have to. This principle governs the designs and operation of their reactors in their entirety.

At the tail-end of ALARP-motivated safety regulation and design, one gets exponentially diminishing returns relative to disproportionately high costs. Bernard Cohen (1990) calculated that the USA spent $2.5 billion per life saved from nuclear radiation.¹⁴⁶ Such calculations have inspired some, such as Sam Dumitriu (2024), to estimate similar cost ranges for British nuclear construction and conclude that British nuclear power is ‘probably too safe’.¹⁴⁷ Disproportionate cost in pursuit of zero risk from nuclear energy, arguably the world’s safest form of energy generation, is suboptimal.¹⁴⁸ Wind energy has 25% more deaths per terawatt hour than nuclear energy, yet wind turbine construction and operation are not subject to the same degree of ALARP principles.¹⁴⁹ Considering the opportunity cost of spending that money on other life-improving technologies and the utility gains downstream of cheaper energy, this is an intolerable cost-benefit ratio.

We believe the removal of ALARP from IRR17 is necessary for empowering nuclear power developers and operators to operate within demonstrably safe risk tolerances without compromising on effective safety. This will empower nuclear reactors to be designed and run below BSL statutory dosage levels without the obligation to pursue further tail-end ALARP safety mechanisms with compounding costs. For example, the EPR reactors at Hinkley Point C (HPC) required a ‘separate analogue control system and two additional HVAC floors’ in order for their DR to be ALARP, despite the fact that EPR reactors in Finland were deemed acceptable without.¹⁵⁰ ‘More steel, concrete, and cabling were required as a result’, increasing cost through added materials, labour and delay.¹⁵¹ This, and countless other mandated and self-directed risk-reducing measures, would not have occurred if ALARP were replaced by a tolerance for operations below the BSL dosage limit.

Recommendation 6 of John Fingleton’s Nuclear Regulatory Review 2025 touches on reforming ALARP. Specifically, he advocates that ‘risks at or below broadly acceptable levels are deemed to be ALARP and ALARA unless there are strong and compelling reasons to the contrary’.¹⁵² This is different to our proposal because ‘broadly acceptable level’ refers to the broadly acceptable region (BSO) of the Tolerability of Risk Triangle, in which BSL is a tier above.¹⁵³ Under Fingleton’s proposal, designers and operators could still be compelled under ALARP to seek further safety restrictions with BSL until they reach BSO. We believe this to be slightly too risk-averse. But our disagreement is a difference in degree of risk tolerance, not a difference in kind of the proposal itself. Recommendation 6 of Fingleton’s review would be preferable to the status quo.

ALARP should not apply to environments and reactors that operate below BSL statutory dosage limits. The consequence of its application is more expensive nuclear reactors, hence fewer, hence higher energy prices. The cost-risk trade-off needs rebalancing. Instead, reactors and companies that already meet explicit requirements should not be compelled to seek the furthest reductions at extortionate prices – this cannot be achieved without removing ALARP from IRR17. The ONR should simply assess meeting the 20mSv and 1mSv BSL dosage limits. RGP should be codified according to international standards with peer countries. Nuclear developers and companies should be empowered to operate within clearer boundaries that have already been deemed safe.¹⁵⁴

Restrict the ONR’s capacity to mandate design amendments

The UK has a unique method of nuclear regulation. Whilst other countries set specific standards by which reactor designs achieve or fail permission to build, the ONR operates a continuous regulatory mandate throughout the construction process beyond application approval. This contributes to the perception of UK nuclear regulation as ‘overly complex, unnecessarily slow, inefficient, and costly’.¹⁵⁵

Instead of the ONR just giving singular approval for designs, it demands nuclear developers to consistently prove their reactor abides by ALARP and Relevant Good Practice (RGP). This is despite the fact there is no clear, public guideline of what constitutes RGP.¹⁵⁶ Nuclear developers have very little recourse against ONR intrusion and can only block a regulatory requirement if they prove the costs fall under Gross Disproportionality clause (as discussed earlier).¹⁵⁷ As such, developers must constantly iterate and reiterate their designs at the ALARP-motivated requests of the ONR.

HPC is the most pertinent example of this. Projected to be five years late and £30 billion over-budget, HPC is meant to comprise two EPR reactors.¹⁵⁸ Due to the ONR’s continuous process-driven approach to regulation under ALARP principles, EDF ‘had to substantially adapt the EPR design to satisfy British regulations, requiring 7000 changes, adding 35% more steel and 25% more concrete’.¹⁵⁹ As a result, HPC is now the most expensive nuclear plant ever made and the second-most expensive building in history after Masjid al-Haram, the Great Mosque of Mecca.¹⁶⁰

This is despite the fact that EPR reactor designs already met nuclear safety standards in France and Germany, and have been built elsewhere in Finland and China.¹⁶¹ This is not to say that EPR reactors are perfect – they have encountered structural issues – but these were discovered and amended whilst in operation. Zero deaths from radiation exposure have occurred from the operation of EPR reactors.¹⁶²

In 2020, GE Hitachi Nuclear Energy abandoned plans to build two Advanced Boiling Water Reactors (ABWR) at a nuclear power station near Wylfa, northwest Wales.¹⁶³ Hitachi (coyly) cited ‘rising costs’ as the main reason.¹⁶⁴ The torrent of design changes mandated by the ONR will have contributed to this rise. For example, the ONR required Hitachi to install HEPA filters on all HVAC ducts,¹⁶⁵ for a reduction of public radiation exposure of 0.0001mSv (banana-level dosage).¹⁶⁶ This is despite the fact that ABWR reactors have spotless safety records (even when struck by earthquakes).¹⁶⁷ It is safe to assume that regulatory intrusion contributed to Hitachi’s exit.

British nuclear regulation is too different, too speciated from peer countries. As a result, any reactor design built here will essentially be rendered first-of-its-kind by the ONR. This suppresses any ‘learning through doing’ or labour force expertise from scaling nuclear construction, all the while making it harder, more time-consuming and more costly to build nuclear power in the UK – without proportionate risk reduction.

This can be changed. Firstly, by expanding the whitelist of countries from which nuclear reactor designs will be automatically accepted. As of 2025, only reactors from the USA get this fast-track.¹⁶⁸ This should be extended at the very least to France and South Korea too. The risk aversion of not inherently trusting nuclear reactors from other developed countries is inhibiting the UK’s capacity to utilise expertise from peer countries and developers to build nuclear capacity at pace.¹⁶⁹

Secondly and inspired by Sam Dumitriu and Michael Hill (2025), the burden of proof on mandated design changes should shift from nuclear developers to the ONR.¹⁷⁰ Again, nuclear developers must currently implement amendments requested by the ONR at any stage of construction unless they can prove a 10+:1 cost-benefit ratio. Instead, from the Generic Design Assessment and onwards, reactors proven elsewhere to operate below BSL dosage limits should be protected from mandated design changes, unless the ONR can prove that the benefits of such changes would outweigh the costs, including the subsequent costs of updating a design mid-construction. Otherwise, new nuclear power infrastructure – from generation to transmission – should be shielded (except with overwhelming just cause) from construction amendments.

Abolish Carbon Price Support

The UK has two major carbon taxes. The first, the UK Emissions Trading Scheme (ETS), currently hovers around £55/tonne.¹⁷¹ The second, Carbon Price Support (CPS), is set to £18/tonne. They were designed to help the government to achieve net zero by 2050.¹⁷² The UK ETS applies to a large proportion of emissions, but CPS is only levied on emissions involved in electricity generation. In effect, it is meant to discourage generators from using coal or gas. In the former case, it worked: The UK no longer has any coal-fired power plants.

But this is not the only effect. Because gas is usually the marginal bidder on the electricity market, and therefore sets the price, a tax on gas consumption also makes electricity generated by other fuels more expensive for consumers. Therefore, for every £1 it raised for the Treasury in 2024, CPS increased electricity costs by more than £3.50.¹⁷³ The extra £2.50 effectively functions as a subsidy for inframarginal green generators, such as nuclear plants and wind farms, which are already deeply subsidised by contracts for difference and other mechanisms.

As a result, CPS costs billpayers a tremendous amount. Ed Hezlet and Patrick Cook (2025) have calculated that ‘[a]bolishing or zero-rating CPS would reduce bills by £1.3 billion’.¹⁷⁴

But, perhaps even worse, a tax only on gas used in electricity generation also discourages electrification. If an industrial user kept using gas or coal heat directly, it would not pay the CPS. If it made the expensive investment to electrify, it would. Given that much of the UK’s electricity is now from zero-carbon sources, this is obviously harmful for the climate.

The UK already has a carbon tax in the form of the ETS. We should rely upon it. Abolishing CPS would encourage electrification and reduce bills.

Remove restrictions on fracking and North Sea oil and gas

The UK is blessed by its proximity to and sovereignty over part of one of the world’s great offshore oil and gas fields – the North Sea. Unfortunately, rather than cultivating this blessing, governments of both stripes have restricted the industry’s growth and over-taxed any activity it can still conduct. Key barriers include windfall profit taxes, that undermine the incentive on firms to be ready to drill when prices are high, and restrictions on issuing new licenses. Onshore energy production has been even more effectively suppressed. Since 2019 (with a brief interregnum in 2022), hydraulic fracturing has been banned in England.

As explained above, the UK will continue to need natural gas for a long time. So will our trading partners. Restricting UK extraction will slightly reduce the supply of fossil fuels, and drive up their price, but the effect will be small when dozens of other countries are very willing to keep extracting to supply this persistent demand. If they have any effect on the climate at all, restrictions on UK oil and gas production may worsen global environmental outcomes by making coal relatively more affordable. This would be a disaster. The US has made tremendous progress against its climate goals despite a lack of a coordinated strategy, largely because market forces have encouraged utilities to switch from coal to natural gas.

The UK’s climate response should be straightforward and focused on the demand side. By relying on the ETS, we can encourage firms and households to reduce emissions at the lowest possible cost. Simultaneously, we should allow producers to drill as much as is economically viable. If the resulting oil or gas is used in the UK, households and firms will internalise the environmental damage. If it is exported, then it is a matter of indifference to us when or where it is burnt. The importing country will be responsible for the emissions under the Paris Accord – and it will be up to them to manage it.

Unfortunately, liberating the North Sea probably will not reduce UK power prices by much. Oil and natural gas are traded on an international market and, therefore, any price effect will be muted. However, that does not undermine our argument. In times of acute energy shortages, having sufficient domestic energy supply will be a tremendous boost for national security. Moreover, North Sea production is obviously additive to GDP – and therefore the tax take. The resulting revenue is also positively related to energy prices. Given the rest of the economy naturally struggles with high oil or gas prices, this creates a counter-cyclical buffer that can support the economy (and the public finances) during future energy price spikes.

We have estimated what the UK’s North Sea production would be had we kept pace with Norway’s gradual decline in production since 2021, rather than suffering – and continuing to forecast – a calamitous decline. We estimate that output in 2030 would be 81% higher than currently forecast by NSTA. This means an extra 185 million barrels of oil equivalent produced in the United Kingdom. At the present oil price of around £48 a barrel, this is equivalent to a revenue boost of £8.8 billion. Given UK extraction costs are currently approximately £19 per barrel and the oil and gas industry contributes approximately £2.3 to GVA for every £1 in expenditure, this suggests a GVA boost of £8 billion – or 0.2% of forecast 2030 GDP.¹⁷⁵

If instead we had kept pace with Norway’s production since 2010, total UK oil and gas production would be 210% of current levels. By 2030, production would be 455 million barrels higher than is currently forecast by the North Sea Transition Agency. Following the same methodology as above, this would be a boost to 2030’s GDP of almost £20 billion – or 0.5% of forecast GDP.

Taxation

All the way back in 1776, our namesake Adam Smith laid out the basic theory of optimal taxation in four cannons:

1. ‘The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. …
2. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person. …
3. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it. …
4. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state…’¹⁷⁶

That is, a tax system should be equitable (i.e., proportional or progressive), predictable, convenient to pay, and efficient (both administratively and economically). These are much the same principles as those adopted by the 2010 Mirrlees Review as the basis for a better UK tax system. However, the Mirrlees Review added another – and useful – caveat:

‘[N]ot all taxes need to address all objectives. Not every tax needs to be ‘greened’ to tackle climate change as long as the system as a whole does so. And not all taxes need be progressive as long as the overall system is. In general, the right tools for achieving distributional objectives are direct personal taxes and benefits. Since the rates on these can be adjusted to achieve the desired degree of progressivity, other aspects of the tax system can be focused on achieving efficiency.’¹⁷⁷

Therefore, we must assess the system as a whole. It easily meets the equity criterion. As has been amply demonstrated elsewhere, higher earners pay a much higher rate of tax.¹⁷⁸ If anything, the system is so progressive as to be manifestly unfair on that small number of people. However, it fails the three other tests in many places. For instance, the level of VAT owing on a particular good is largely based on the arbitrary categorisation choices of the HMRC and taxation tribunals. After all, is a Jaffa Cake a cake or a biscuit?¹⁷⁹ Similarly, especially after the most recent changes to small business and farm relief, the inconvenient timing of inheritance tax can undermine the operation of successful small businesses or farms. Finally, the tax system is certainly both administratively and economically inefficient: As the Tax Foundation’s International Tax Competitiveness Index showed, the UK’s tax base is very poorly designed, placing us 32nd in the OECD.¹⁸⁰

The most important of these canons for economic growth is (economic) efficiency. We have identified a small number of changes that could substantially increase GDP:

• Swap Stamp Duty, business rates and council tax for a proportional land tax;
• Increase the generosity of capital allowances for structures;
• Reducing Corporation Tax back to 19%; and
• Reducing the £100,000 tax trap.

To fund these changes, an obvious move (in addition to a proportional land tax) would be to broaden the VAT base. At the moment, the UK’s VAT collects only 49% of the revenue that would be expected from a 20% tax on all final consumption.¹⁸¹ This is because the threshold at which UK firms begin paying VAT is quite high and many goods are exempt, zero-rated, or subject to lower rates. The UK’s VAT revenue ratio is lower than the OECD average of 58% and dramatically lower than that of New Zealand, which is the top performer at 96%. These exemptions distort consumers’ decision-making, discourage small firms from growing, and are not particularly progressive. Moreover, VAT is among the least damaging taxes to the economy. This is largely because consumption taxes do not distort taxpayers’ choices between savings and consumption, unlike income taxes, which double-tax savings.¹⁸²

Replace most property taxes with a proportional land tax

The UK levies three major taxes specifically targeted at real property: Stamp duty, business rates, and council tax. Unfortunately, our taxes on property are both the highest in the OECD and very poorly designed.¹⁸³ By contrast, a pure tax on the value of land is one of the most economically efficient ways for a government to raise money. This is because it cannot be avoided by taxpayers distorting their choices.

As we laid out in a recent briefing paper, stamp duty is one of the worst taxes on the books.¹⁸⁴ By disrupting house-moving chains, it gums up the housing market and prevents mutually beneficial housing transactions. It locks young people out of highly productive cities and makes new construction more expensive. Our estimate, constructed according to the methodology in that paper, shows that abolishing Stamp Duty on primary residences alone could increase GDP in ten years by 0.65%.

Business rates are levied on the combined value of both a business’s land and the fixed structures atop of it. As Nobel laureate William Vickrey (1999) put it, they are therefore ‘a combination of one of the worst taxes—the part that is assessed on real estate improvements […]—and one of the best taxes—the tax on land’.¹⁸⁵ Moreover, in the UK, business rates are charged at a variety of arbitrary rates that largely depend on the political clout of individual sectors. Unsurprisingly, such a tax undermines the economics of physical investment by firms. Indeed, the Tony Blair Institute has estimated that replacing it with a pure land tax could increase long-run GDP by 0.25%.¹⁸⁶

Finally, council tax is both unfair and inefficient. It is based on 1991 valuations and levied through an unjustified set of bands, which are themselves based on the property value, including improvements. This means it is subject to the same criticism William Vickrey made of general property taxes.

We propose that all three of these taxes be replaced with a proportional land tax owing on all private land. To account for the disproportionate effect this would have on assetholders with land-heavy portfolios, such as farmers, this tax could be levied only on the land value above £8,400 an acre (which Savills estimates is the average value of agricultural land). Such a flat exemption for the first few thousand pounds of land value per acre, regardless of use, would avoid undue horizontal equity problems, without inefficiently distorting land use towards agriculture.

To deal with the classic problem of asset-rich but cash-poor pensioners, landowners could also be permitted to defer tax payment through a reverse mortgage structure. This would allow landowners to accrue their tax bill over time and to pay it off on death or sale. This deferred payment should be charged interest at market rates to ensure that most taxpayers would be better off paying regularly.

Combining our estimate for the possible growth dividend from abolishing SDLT for primary residences and the TBI estimate for the same from replacing business rates with a commercial land tax, we reach a plausible lower bound of 0.9% in long-term GVA added from property tax reform.

Increase the generosity of capital allowances on buildings and structures

As we pointed out in a recent paper based on the Tax Foundation’s International Tax Competitiveness Index, the UK’s tax system punishes those who build.¹⁸⁷

One particularly egregious example is that the UK system does not allow firms to recover the full cost of industrial buildings from their tax bill. Instead, they can write off only 3% of the value of the new structure each year. It would take 33 years to recover the full value, but by this time, a pound would be worth much less than it is today, both due to inflation and the opportunity cost of foregone investments. According to the Tax Foundation’s estimates (as cited in the above report), the present value of this allowance is only 39% of the initial cost of the building. On average, OECD countries allow firms to write off 49% of the costs. In the US, Estonia, and Latvia, firms can write off the entire amount.

The Tony Blair Institute has estimated, using the OBR’s standard (conservative) methodology, the likely growth dividend that could arise from adopting neutral cost-recovery for structures, which is economically similar to full expensing, at 0.3% of GDP by the end of the OBR’s forecast period and 0.5% in the long run, at an initial fiscal cost of £14 billion a year.¹⁸⁸ We adopt this estimate directly.

At the same time as making this change, we should also allow businesses to write off expenditure on residential buildings off their taxes. The UK is unique in the OECD for not allowing this. The result is that firms are uniquely discouraged from building homes, which reduces the size of an important possible player (i.e., the large-scale corporate build-to-rent landlord) in the residential housing market.

Reduce Corporation Tax back to 19%

According to an estimate from the Office for Budget Responsibility, reducing the headline rate of corporation tax back to 19% would increase long-run GDP by 0.3%.¹⁸⁹ Growth is especially sensitive to the level of corporation tax, because it has many negative impacts on firm decision making. For instance, higher corporation taxes increase the cost of capital facing firms and therefore reduces investment. Similarly, it impacts firms’ choices about where to locate. Indeed, a report from the OECD estimated that corporate tax was the most damaging major form of taxation for growth, ahead of personal income taxation, consumption taxes, and property taxes.¹⁹⁰

However, reducing the rate is only one of many pro-growth reforms that could be made to corporation tax. Above, we proposed changes to full expensing that would allow firms to write off the full cost of their investments in buildings. Other technical changes to the tax code could enable further growth: For instance, the Tax Foundation argues that tax codes should enable longer-term carryforwards/backs of tax losses and that governments should reduce the unequal treatment of debt and equity capital.¹⁹¹

Resolve the £100,000 tax trap

When an earner hits £100,000 in ‘adjusted net income’, his marginal tax rate rises from 40% to 60% as the personal allowance tapers away.¹⁹² An even-worse trap occurs when tax-free childcare is withdrawn at £100,000.¹⁹³ This is further compounded by student loan repayments, which increase the marginal rate by a further 9%.¹⁹⁴ The result is that many people choose to artificially hold their income at £100,000. Sometimes, they do so by using salary sacrifice or increasing their pension contributions. This is not ideal, but it is not especially economically damaging. Much worse, some earners actively turn down pay rises or new responsibilities, as the additional work or hours are not worth the much-diminished rewards. A recent graph from The Economist (below) reveals just how large this effect is. The spike just before £100,000 is clearly driven by these distortions.

The full growth dividend that could arise from resolving this distortion is difficult to estimate. However, as a first pass, we estimate that eliminating this spike could increase taxable labour earnings by £52mn alone, by dividing the 10,000 person spike at £100,000 smoothly over the £100-£120,000 range.

Administration: simplifying the tax code

An overly complex tax code obviously distorts firm decision-making, but it also imposes substantial administrative costs. These administrative costs alone consume around 0.5% of GDP according to a conservative estimate from HMRC.¹⁹⁵ Alterations to simplify the tax code (e.g., allowing for full expensing for more assets, broadening the VAT base, merging Income Tax and National Insurance) could bring these down, as could efficiency improvements at HMRC itself.

Financial Services

Loosen credit standards and bank capital requirements

According to Bank of England research, credit supply shocks explained one-third to one-half of Britain’s ‘lost’ GDP between 2008 and 2012.¹⁹⁶ This demonstrates the crucial importance of access to credit for economic growth. This will hardly be a surprise to the private sector. Most major business investments are at least partially funded by debt. Moreover, the cost of debt anchors the rate of return that equity owners expect on their investments. Thus, if the (real) cost of borrowing goes up, investment becomes less attractive and long-term growth will be lower. Naturally, it also reduces debt-funded consumption.

Figure from Barnett and Thomas (2013), Chart 16

One straightforward measure of the ease of access to credit is the interest rate premium that businesses have to pay over the official Bank Rate on their loans. This allows us to ‘look through’ the effects of monetary policy to understand how effectively the financial system is intermediating funds between savers and borrowers. Though this premium has fallen since its peak in 2012, it remains above pre-crisis levels.

ASI figure, BofE data: IUMABEDR, CFMBJ82

In our primary table, we estimate that reforms which lowered credit spreads by 1pp, which would take them below pre-crisis levels, or loosened credit standards by 1 standard deviation could increase long run GDP by 1.1%. This is based on empirical work from both the UK and the US focused on the sensitivity of output to changes in the supply of credit.¹⁹⁷

Much of the blame for this higher cost of credit in the post-crisis era must go to overly risk-averse government policy, which has made it more difficult for banks (in particular) to lend.

The exact shape of post-crisis bank regulation is very complicated. Major banks must meet three different requirements for loss-absorbing capability: Capital requirements, leverage requirements, and so-called minimum requirements for own funds and eligible liabilities.¹⁹⁸ Each of these requirements is defined slightly differently and each could, at different banks and in different circumstances, become the binding constraint on banks. Simultaneously, banks must also meet stringent liquidity requirements to ensure that they can always meet their liabilities when they come due.¹⁹⁹ As a result, regulatory arbitrage is today one of the most important tasks of a senior banker. To assist them in this task, investment banks have developed a suite of increasingly sophisticated instruments tailored to the regulatory environment, such as AT1 bonds and ‘synthetic risk transfers’.²⁰⁰ These instruments may help central banks to spread risk away from the regulated sector and (therefore) retail deposits, but they may also increase the mess during an inevitable failure.²⁰¹

Nonetheless, despite the complexity of the underlying rules and the availability of new instruments, the empirical evidence is clear. Banks seem to have adjusted the asset mix in their portfolios to reduce higher-risk lending to businesses and increase their allocations to lower-risk lending, such as mortgages and sovereign debt.²⁰²

Certainly, after the crisis and its concomitant bail-outs, governments may have needed to tighten up rules to avoid moral hazard. However, this does not imply that the present level or configuration of capital and liquidity rules is the right one. We should allow banks to take on more risk, so long as they are open about it with their creditors and willing and informed investors bear the costs rather than taxpayers.

Moreover, rules focused on UK lending standards would not have averted the crisis, as it happened. Northern Rock was driven to collapse by a classic bank run. However, the run on Northern Rock was driven by the total collapse of short-term wholesale funding for banks across the world, rather than a flight of depositors.²⁰³ This run does not seem to have been motivated by the perceived quality of the underlying assets. Indeed, Northern Rock held almost no subprime mortgage debt. Instead, it seems to have been driven by Northern Rock’s over-reliance on short-term wholesale funding.²⁰⁴ Meanwhile, RBS’s failure was partially driven by capital inadequacy, but its unwise international expansion was a bigger driver of this situation than weaknesses in the UK lending book.²⁰⁵ Rules that controlled the amount of liquidity transformation that banks can conduct – or a more proactive Bank of England, acting as lender of last resort (consistent with Bagehot’s dictum, of course) – might have averted the crisis; stricter lending standards would not have.²⁰⁶

The Bank of England seems to have recognised the need for more flexibility, and is currently encouraging banks to reduce the ‘management buffers’ on top of capital requirements.²⁰⁷ These are additional buffers that bank managers impose on themselves to ensure that they do not breach the state-imposed limits and incur the wrath of prudential regulators. This jawboning is sensible, but it should be coupled with liberalisation of the underlying rules, beyond the recent small reduction in capital ratios.

Indeed, all bank regulation should be subject to the dual tests of ‘is this necessary to rectify a real market failure?’ and ‘are the economic consequences of this regulation proportionate to the risk they address?’. An affirmative answer to both should be required before a regulation is maintained. We should certainly avoid an implicit policy of ‘zero bank failures’, which insists that stability is always and everywhere the most important objective.

The complexity of the system makes it difficult to propose specific regulatory initiatives that could ease the cost of finance for UK businesses. Nonetheless, it would be worthwhile for the Government to commission a specific study of the effect of post-crisis (macro)prudential policy on banks’ crucial function as financial intermediaries between savers and borrowers. Of course, many of the rules in this area are dictated by international agreements, such as the Basel accords, to prevent a repeat of the cross-border contagion experienced in 2008. This may limit the British Government’s freedom of action, but as the UK remains the third largest banking centre in the world and the largest in Europe, it may have the ability to shape these rules in a more pro-growth direction.

Relax anti-money laundering rules

According to Lexis Nexis and Oxford Economics, Britain’s financial crime compliance rules cost UK financial institutions £38.3bn to administer in 2023.²⁰⁸ Anti-money laundering (AML) rules are likely the majority of these costs. There are three major additional costs of such rules:

1. The administrative costs borne by non-financial services firms that are bound by AML rules, such as lawyers and estate agents,
2. The administrative costs borne by the customers of AML-regulated parties, such as companies and individuals trying to open bank accounts, and
3. The ‘forgone’ activity from legitimate transactions (for instance, in cash-intensive or otherwise ‘high-risk’ sectors) that are deterred.

The ASI’s estimate for the first two of these additional costs are respectively £830 million and £260 million. This estimate is an adaptation of the Deloitte Economics estimates commissioned by the New Zealand Ministry of Justice in advance of the introduction of New Zealand’s own AML laws, which are substantially similar to the UK’s.²⁰⁹

The third cost is very difficult to estimate, but it is nonetheless likely to be large. According to a 2023 FCA survey, de-risking (which is largely motivated by these rules) is a widespread practice in the UK banking market.²¹⁰ The middle 50% of respondents reported that they declined between 0.1% and 6.7% of personal bank account applications and 0.2% and 11.4% of business bank account applications. If even a small fraction of these declines lead to permanent deprivation of financial services from the applicant or, worse, a decision to exit business altogether, the growth consequences would be substantial.

If we adopt the Lexis Nexis estimate for the cost to the financial sector, the total quantifiable cost of financial crime compliance to UK entities is £39.4 billion, of which the vast majority is the cost to UK banks. If this can be reduced by 15%, the gain to UK entities would be £6 billion a year.

We are confident that this figure could be reduced without a substantial increase in criminality. This is because the existing measures represent an extraordinarily large – and disproportionate – application of resources to one class of crime. Indeed, it is more than four times what the Home Office spends on all other policing.²¹¹ This comparison alone suggests that Britain’s AML rules need rebalancing. Moreover, data from America suggests that AML laws are unlikely to be a cost-effective crime fighting tool. Even in 2016 (before many of the most burdensome rules were imposed), Norbert Michel and David Burton (2016) estimated the cost of each conviction secured using AML rules was at least $7 million each.²¹²

Unfortunately, the UK’s ability to act in this area may be substantially constrained by the United States and our international obligations. Every country’s AML laws are subject to inspection by the Financial Action Task Force (FATF) and failing FATF’s inspections can result in diminished access to the dollar-led financial system. Still, the UK currently has one of the highest levels of compliance with FATF’s recommendations, with zero ‘non-compliant’ recommendations and 24 fully compliant, out of 40 total.²¹³ As shown in the table below, this is a strong performance, relative to other global financial centres. This gives us room to relax our rules without falling out of step with world opinion. Moreover, as the world’s third-largest banking centre, Britain may have substantial leverage to argue for these rules to be sensibly liberalised.

Table: Compliance with FATF Recommendations in latest mutual evaluation reports

Jurisdiction	Fully Compliant	Non-Compliant
United Kingdom	24	0
United States	9	3
Germany	17	0
France	19	0
Japan	4	0
Switzerland	8	0
Singapore	20	0
Hong Kong	11	0

Additional Reform Areas

Labour market

Liberal labour market laws are a crucial ingredient for economic dynamism. They allow for the easier reallocation of talent across firms and industries as markets change. Indeed, it has long been one of the UK’s key comparative advantages relative to the Continent that our labour market is more flexible. However, recent – and forthcoming – reforms to employment law have eroded this advantage.

We estimate that liberalising the UK’s employment protection laws to be equivalent to those in the United States (a feasible lower-bound) would increase GDP by 0.94%.²¹⁴ However, this is based on the employment laws as they stood in 2019. Since then, the UK’s labour market has become substantially more rigid, especially with the forthcoming Employment Rights Act (ERA). The gains from labour market liberalisation may therefore be even larger.

The UK could move to a model of ‘partially at-will’ employment, subject to a mandatory notice period or compensation in lieu. This model is used in Australia for high earners and in Canada and Switzerland more generally.²¹⁵ It is an intermediate option between the entirely at-will nature of employment in the United States and the justification-required model in the UK and the rest of Europe. It would give employers the confidence to hire new workers and the ability to fire underperformers, while offering some protection to employees. Unfortunately, by removing the cap on wrongful dismissal compensation, the Employment Rights Bill is moving us further away from this model.

Reforms to equal pay laws and the minimum wage, though not directly related to employment protection, could also free up the labour market. Already, the absurd results of judicial misinterpretation of the Equal Pay regime have bankrupted one city council.²¹⁶ Similarly, the UK’s minimum wage now rivals that of France, especially relative to the (stagnant) median wage.²¹⁷ The result is aggressive wage compression so young, inexperienced workers cost as much as less-risky later-career workers. In such an environment, it is little surprise that fresh graduates are struggling to find work. Reforming Equal Pay laws, along the lines of the reforms introduced in New Zealand this year, to restrict claims to egregious, actual cases of gender discrimination could help.²¹⁸ So too could freezing the minimum wage in nominal terms to allow productivity growth to catch up.

Trade

The United Kingdom has always been a trading nation, which has done much for her economic success. Not only does trade reduce prices for consumers, it also spurs productivity improvements among domestic firms.

The UK’s effective tariff rate has fallen substantially over time, especially since Brexit. Today, the UK’s tariffs are very low by global standards and continue to fall as the UK negotiates free trade agreements. However, there is still scope for unilateral tariff reduction.

In fact, we estimate that full unilateral abolition of tariffs could unlock 0.79% in extra GDP. This would be a radical maneuver but it would not be without precedent. For instance, Hong Kong and Singapore both operate zero-tariff policies.

This figure is based on an existing average tariff rate of 0.95%, empirical estimates for the elasticity of imports to tariffs, and empirical estimates for the relationship between trade and growth.²¹⁹ However, it also underrates the possible gains from unilateral tariff reductions. Uneven import tariffs across nations can lead to inefficient ‘trade diversion’, whereby consumers choose more expensive and/or otherwise worse goods from a trading partner with preferential tariffs because of the tariff gap. Unilateral abolition – or otherwise flattening the distribution of tariffs across trading partners – can ensure that each pound spent on imports has the largest possible benefit to consumers.

However, given the relatively low level of explicit tariffs, non-tariff barriers (NTBs), such as excessive and discriminatory phytosanitary standards for food trade, are likely to be bigger restrictions on trade. These are difficult to measure, but, since Brexit, it is likely that the UK’s NTBs with the ‘rest of the world’ have fallen, while those with the EU have increased. Lowering NTBs would have similar effects to lowering standard tariffs, though the total size is likely to be much larger.

One obvious way to lower NTBs would be to enter general mutual recognition agreements with comparable foreign states to recognise their regulations as equivalent to our own. For instance, such an arrangement exists between Australia and New Zealand, which means that any good legal for sale in one country is generally legal in the other and any professional licensed to serve in one country is generally licensed in the other.²²⁰ If such agreements were difficult to strike, the UK could also unilaterally recognise other countries’ regulations as equivalent to our own.

Aviation

According to the independent Airports Commission, a third runway at Heathrow could add 0.75% to long-run GDP.²²¹ It is the primary gateway from Great Britain to the wider world and, as the single busiest two-runway airport on Earth, is a key bottleneck for the economy. The Government’s approval for new runways at Heathrow and Gatwick is therefore welcome. It must now stay the course and protect the projects from regulatory overreach until completion.

In addition to increasing Heathrow’s capacity, longer-term reforms should be made to the airports system. Firstly, central control over capacity should be loosened. It should largely be a question for the airport companies, who could (for instance) be simply required to pay monetary compensation to highly-affected people. Secondly, capacity should be better allocated between airlines. The inefficient grandfathering system currently used is a relic of our membership of the EU. An auction system would ensure that the capacity that already exists – or will be built – is allocated to the most high-value uses.²²²

Digital markets

Since the UK’s exit from the EU, it has effectively retained most of the EU’s regulatory apparatus, including the General Data Protection Regulation (GDPR). The last Conservative government rebranded it as the UK GDPR, but left it substantially unchanged. Happily, the UK has not copied the so-called regulatory superpower’s innovation of an ‘AI Act’, but the rules that were already in place by 2020 remain a handbrake on technological growth.

A number of studies have linked the GDPR in particular to Europe’s continued technological impotence. For instance, Mert Demirer (2024) and his colleagues show that GDPR made European firms much less ‘data-intensive’, which increased their production costs.²²³ Meanwhile, Rebecca Janßen (2022) and her colleagues demonstrate that the GDPR led to a ‘lost generation’ of new apps, halving the number of new apps added to the Google Play store in Europe.²²⁴ Finally, Jian Jia et al. (2018; 2025) reveal that the GDPR reduced venture investment in European tech firms by more than 25% compared to the US.²²⁵ Based on these works, we estimate that the GDPR alone may have reduced the size of the UK economy by 0.40%.

Repealing the GDPR is an obvious first step to reinvigorating the UK tech sector. It could be replaced by a lighter-touch set of rules, driven by UK consumers’ desires for the trade-off between privacy and convenience, instead of the German privacy fetish.

Conclusion

Without economic growth, democratic politics becomes ugly. It becomes a zero-sum game, characterised by disputes about the allocation of a seemingly fixed pie. Sometimes, efforts to improve that allocation even result in the pie shrinking further. But with growth, many ills can be forgiven.

Growth is also the easiest path towards fiscal sustainability. As the companion paper to this paper demonstrated, in the absence of sustained improvements in real wages, the welfare state is likely to consume an ever-larger share of the economy. Unless we resort to continental levels of taxation – which has its own consequences for growth – the result will be a rapid descent into a self-reinforcing sovereign debt spiral.²²⁶

Finally, growth is the only way to continually improve the living standards of working people – however one defines that famously amorphous term. We rarely agree with Paul Krugman (1992), but he was right when he said:

‘Productivity isn’t everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.’²²⁷

This paper is our attempt to demonstrate to policymakers that growth need not be a mere slogan. Better public policy can – and has – delivered substantial, quantifiable growth dividends when tried in this country and others.

Finally, we would like to extend an unprompted ‘thank you’ to the UK’s growing community of progress-minded wonks. Not just those cited in this paper (although we thank them doubly) but everyone dedicated to pursuing British prosperity. Many (perhaps most) of the proposals here have been made before. Without the tireless efforts of these people, these crucial ideas would not have entered the public consciousness. This paper is just one of many contributions to this cause.

We hope this helps those interested in making the country a better place. Thank you for reading.

Acknowledgments

We would like to thank the following people for their generous insights in the process of writing this paper: Maxwell Marlow, Emma Munday, Ben Southwood, Sam Bidwell, Ed Hezlet, and Samuel Hughes. We also thank contributors who have asked to remain anonymous. All errors – and recommendations – remain our own.

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1. N.b., the above graph shows the indicative logarithm of GDP. This is for ease of illustration, as a logarithm transforms a series with a constant geometric growth rate into a straight line.↩︎

2. National Audit Office, ‘Ministry of Defence 2024-25’, (2025), https://www.nao.org.uk/overviews/ministry-of-defence-2024-25/↩︎

3. George Allison, ‘Britain now has two aircraft carriers at sea’, ukdj (2024), https://ukdefencejournal.org.uk/britain-now-has-two-aircraft-carriers-at-sea-2/↩︎

4. Mayor of London, ‘Police officer costs’ (2021), https://www.london.gov.uk/who-we-are/what-london-assembly-does/questions-mayor/find-an-answer/police-officer-costs-1 – inflated by labour cost growth in the public administration and defence sector.↩︎

5. Danielle Jefferies and Katie Purbrick-Thompson, ‘The NHS budget and how it has changed’, The King’s Fund (2025), https://www.kingsfund.org.uk/insight-and-analysis/data-and-charts/nhs-budget-nutshell↩︎

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9. Ibid.↩︎

10. Cf. John Myers, Sam Bowman, and Ben Southwood, ‘The housing theory of everything’, Works in Progress (2021), https://worksinprogress.co/issue/the-housing-theory-of-everything/↩︎

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38. Cf. Pierre-Philippe Combes et al., ‘The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection’, Econometrica: Journal of the Econometric Society (2012)↩︎

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56. Ibid.; ‘What is going on with the Building Safety Regulator?’, pbctoday (2025), https://www.pbctoday.co.uk/news/building-control-news/what-going-with-building-safety-regulator/152490/↩︎

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59. As proposed by The YIMBY Initiative (2025)↩︎

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66. This is the evolution of ‘water neutrality’ rules which were much stronger but have since diluted as of November 2025.↩︎

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70. Cf. Iain Deas, Brian Robson and Michael Bradford, ‘Re-thinking the Urban Development↩︎

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75. Ibid.↩︎

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88. Richard Willis, ‘Protecting property developments from risk of judicial review’, Lighthouse Communications, accessed 31/10/2025, https://lighthouseni.com/protecting-property-developments-risk-judicial-review/↩︎

89. Ibid.↩︎

90. Sam Coates, ‘Pressure grows to leave ‘mad’ Aarhus Convention used to block UK building projects’, Sky News (2025), https://news.sky.com/story/pressure-grows-to-leave-mad-aarhus-convention-used-to-block-uk-building-projects-13399877, emphasis added.↩︎

91. Gabriel Moberg and David Lawrence, ‘Reforming Judicial Review to get Britain Building’, Centre for British Progress (2024), https://britishprogress.org/briefings/reforming-judicial-review-to-get-britain-building. Note that the authors do not advocate for the UK’s exit from the Aarhus Convention in this article.↩︎

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96. CF. Department for Energy Security and Net Zero, ‘Domestic private rented property: minimum energy efficiency standard - landlord guidance’, accessed 03/11/2025, https://www.gov.uk/guidance/domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance↩︎

97. GOV.UK, ‘Warm homes and cheaper bills as government accelerates Plan for Change’, accessed 03/11/2025, https://www.gov.uk/government/news/warm-homes-and-cheaper-bills-as-government-accelerates-plan-for-change↩︎

98. Sarah Wertheim and Francesca Gallagher, ‘EPC regulation – reform affecting commercial premises’, Local Government Lawyer (2024), https://www.localgovernmentlawyer.co.uk/sharpeedge/808-sharpeedge-planning/57853-epc-regulation-reform-affecting-commercial-premises↩︎

99. Oliver Knight, ‘Improving your EPC rating could increase your home’s value by up to 20%’, Knight Frank (2022), https://www.knightfrank.com/research/article/2022-10-11-improving-your-epc-rating-could-increase-your-homes-value-by-up-to-20↩︎

100. Valuation Office Agency, ‘Non-domestic rating: stock of properties statistical commentary’ (2025), https://www.gov.uk/government/statistics/non-domestic-rating-stock-of-properties-2025/non-domestic-rating-stock-of-properties-statistical-commentary↩︎

101. Jack Conroy, ‘EPC ratings and planning policy: A comparative analysis across London’, Savills (2023), https://www.savills.co.uk/blog/article/347511/residential-property/epc-ratings-and-planning-policy–a-comparative-analysis-across-london.aspx↩︎

102. Oliver Knight, ‘Improving your EPC rating could increase your home’s value by up to 20%’, Knight Frank (2022). https://www.knightfrank.com/research/article/2022-10-11-improving-your-epc-rating-could-increase-your-homes-value-by-up-to-20↩︎

103. Anna Clarke, ‘The cost of building a house’, The Housing Forum (2024), https://housingforum.org.uk/wp-content/uploads/2024/09/The-Cost-of-Building-a-House-Housing-Forum-Sept-2024.pdf↩︎

104. Jack Conroy, ‘EPC ratings and planning policy: A comparative analysis across London’, Savills (2023), https://www.savills.co.uk/blog/article/347511/residential-property/epc-ratings-and-planning-policy–a-comparative-analysis-across-london.aspx↩︎

105. Flora Harley, ‘Meeting the Commercial Property Retrofit Challenge - Part 2: The Business Case for Action’, Knight Frank (2024), https://www.knightfrank.com/research/article/2024-10-24-meeting-the-commercial-property-retrofit-challenge-part-2-the-business-case-for-action↩︎

106. Chris Sargent, ‘New growth catalysts revving the economic engine’, Turner and Townsend (2024), https://publications.turnerandtownsend.com/international-construction-market-survey-2024/uk. Article puts construction cost at US$4,473/m².↩︎

107. Latif Onur Uğur and Neşe Leblebici, ‘An examination of the LEED green building certification system in terms of construction costs’, Renewable and Sustainable Energy Reviews, Volume 81, Part 1 (2018)↩︎

108. Ruchit Parekh, ‘Comparison Analysis of Construction Costs According to LEED and Non-LEED Certified Educational Buildings’, JETIR, Volume 11, Issue 8 (2024)↩︎

109. GOV.UK, ‘Warm homes and cheaper bills as government accelerates Plan for Change’, accessed 03/11/2025, https://www.gov.uk/government/news/warm-homes-and-cheaper-bills-as-government-accelerates-plan-for-change↩︎

110. Rebecca Delaney and Ellie Herve, ‘Could Minimum Energy Efficiency Standards (MEES) be about to bite?’, Macfarlanes (2022), https://www.macfarlanes.com/what-we-think/102eli5/could-minimum-energy-efficiency-standards-mees-be-about-to-bite-102i3s6/↩︎

111. Adam Score, as quoted in GOV.UK. ‘Warm homes and cheaper bills as government accelerates Plan for Change’, accessed 04/11/2025, https://www.gov.uk/government/news/warm-homes-and-cheaper-bills-as-government-accelerates-plan-for-change↩︎

112. Office for National Statistics, ‘UK environmental taxes: 2023’, accessed 04/11/2025, https://www.ons.gov.uk/economy/environmentalaccounts/bulletins/ukenvironmentaltaxes/2023↩︎

113. Cf. Joe Hill, ‘Everythingism: an essay’, Re:State (2025), https://re-state.co.uk/publications/everythingism-an-essay/↩︎

114. Matt Oliver, ‘Britain paying highest electricity prices in the world as net zero costs rise’, The Telegraph (2025)↩︎

115. Department for Energy Security and Net Zero, ‘Gas and electricity prices in the non-domestic sector’ (2025), https://www.gov.uk/government/statistical-data-sets/gas-and-electricity-prices-in-the-non-domestic-sector; Cf. Ben Southwood, Samuel Hughes, and Sam Bowman. ‘Foundations: Why Britain has stagnated’, Foundations (2024), https://ukfoundations.co/↩︎

116. Hillard Huntington, and Brantley Liddle, “How Energy Prices Shape OECD Economic Growth: Panel Evidence from Multiple Decades”, MPRA, Paper No. 113040 (2022)↩︎

117. Todd Moss, and Jacob Kincer, “How does energy impact economic growth? An overview of the evidence”, Energy for Growth Hub (2023)↩︎

118. Sam Barker, ‘UK chemicals sector on path of ‘steady decline’ according to new report’, The Chemical Engineer (2025)↩︎

119. Hannah Ritchie, and Pablo Rosado (2020), ‘Nuclear Energy’, Our World In Data (2020), https://ourworldindata.org/nuclear-energy↩︎

120. Tone Langengen, ‘Cheaper Power 2030, Net Zero 2050: Resetting the UK’s Electricity Strategy for the Future’, Tony Blair Institute for Global Change (2025), https://institute.global/insights/climate-and-energy/cheaper-power-2030-net-zero-2050-resetting-UK-electricity-strategy↩︎

121. Julia Kollewe, ‘Great Britain’s energy networks to get £24bn upgrade but bills to rise’, The Guardian (2025)↩︎

122. Rachel Fletcher, as quoted in Energy Security and Net Zero (ESNZ) Committee. ‘15 October 2025 - The cost of energy - Oral evidence’, UK Parliament (2025), Q316; cf. ‘Wasted Wind’, Octopus Energy (2025), https://wastedwind.energy/2025-10-23↩︎

123. Tone Langengen, ‘Cheaper Power 2030, Net Zero 2050: Resetting the UK’s Electricity Strategy for the Future’, Tony Blair Institute for Global Change (2025), https://institute.global/insights/climate-and-energy/cheaper-power-2030-net-zero-2050-resetting-UK-electricity-strategy↩︎

124. Hannah Donnarumma, ‘Trends in UK imports and exports of fuels’, Office for National Statistics (2022); cf. Josh Jackman, ‘Where does the UK get its gas from?’, Sunsave (2025)↩︎

125. Steven Stoft, Power System Economics: Designing Markets for Electricity (2002), p. 129.↩︎

126. Dispatchable means a power source that can be turned on at will and relied upon to generate, largely regardless of the weather conditions. Examples include pumped hydro, grid-scale batteries, and natural gas turbines. It typically does not include zero marginal-cost technologies, such as nuclear power, that are reliably available but rarely make sense to turn off. Using such ‘baseload’ technologies in a dispatchable role is very expensive and is typically only done when they are market imperfections or it is the only available power source, such as geothermal energy in Hawaii.↩︎

127. ‘Annual Report on the Operation of the Capacity Market in 2024/25’, Ofgem (2025), https://www.ofgem.gov.uk/transparency-document/operation-capacity-market-2024-2025↩︎

128. Nonetheless, capacity markets are certainly a second-best solution. They effectively force all energy consumers to insure against the risk of high spot prices in the same manner. If it was politically possible for spot electricity prices to reach very high levels during times of short supply, this would better incentivise the right type of capacity and the right type of demand management. However, the ever-present risk of political interference may create ‘soft price caps’ that undermine the market mechanism.↩︎

129. For more on the cost on wind curtailment and turn-up, see ‘Wasted Wind’ by Robin Hawkes: https://wastedwind.energy/↩︎

130. Justin Rowlatt, ‘Britain’s energy bills problem - and why firms are paid huge sums to stop producing power’, BBC News (2025), https://www.bbc.co.uk/news/articles/cdedjnw8e85o↩︎

131. Anselm Eicke and Tim Schittekatte, ‘Fighting the wrong battle? A critical assessment of arguments against nodal electricity prices in the European debate’, Energy Policy (2022).↩︎

132. John Fingleton. ‘Nuclear Regulatory Review 2025’, Department of Energy Security and Net Zero (2025), https://assets.publishing.service.gov.uk/media/692080f75c394e481336ab89/nuclear-regulatory-review-2025.pdf↩︎

133. The legislation says specifically the duty to ‘take all necessary steps to restrict so far as is reasonably practicable the extent to which its employees and other persons are exposed to ionising radiation’.Cf. Office for Nuclear Regulation. ‘SAFETY ASSESSMENT PRINCIPLES FOR NUCLEAR FACILITIES, 2014 EDITION, REVISION 1’ ( 2020), accessed 04/11/2025, https://www.onr.org.uk/publications/regulatory-guidance/regulatory-assessment-and-permissioning/safety-assessment-principles-saps↩︎

134. John Hurst. ‘A summary of the ’ALARP’ principle and associated thinking’, Journal of Nuclear Science and Technology, Volume 56, Issue 2 (2019)↩︎

135. Alex Chalmers. ‘The bad science behind expensive nuclear’. Works in Progress (2025), https://worksinprogress.co/issue/the-bad-science-behind-expensive-nuclear/↩︎

136. Maurice Tubiana (2005) et al. as cited in: Ibid.↩︎

137. John Fingleton. ‘Nuclear Regulatory Review 2025’, Department of Energy Security and Net Zero (2025), https://assets.publishing.service.gov.uk/media/692080f75c394e481336ab89/nuclear-regulatory-review-2025.pdf↩︎

138. Cf. https://www.eenews.net/articles/doe-kills-decades-old-radiation-safety-standard/↩︎

139. ‘Guidance on ALARP Decisions in COMAH’, Health and Safety Executive, accessed 16/15/2025, https://www.hse.gov.uk/foi/internalops/hid_circs/permissioning/spc_perm_37/↩︎

140. ‘Applications of the 2007 Recommendations of the ICRP to the UK’, Health Protection Agency (2009), accessed 17/12/2025, https://assets.publishing.service.gov.uk/media/5a7e2c0540f0b62302689a19/RCE-12_for_website_v2.pdf; there are arguments that the Risk Coefficient is too high, thus warping the UK’s tolerability of nuclear risk. Such arguments are based on previous elaboration of criticism of the LNT model. However, such analysis falls outside the scope of this paper.↩︎

141. ‘Guidance on ALARP Decisions in COMAH’, Health and Safety Executive, accessed 16/15/2025, https://www.hse.gov.uk/foi/internalops/hid_circs/permissioning/spc_perm_37/; edited to add BSL and BSO levels.↩︎

142. Ibid.↩︎

143. RGP has its own problems, specifically regarding ambiguity. For more on this, see Recommendation 6 of the Nuclear Regulatory Review 2025.↩︎

144. For more on the mechanics of ALARP-based RRM compulsion, see: ‘Guidance on ALARP Decisions in COMAH’, Health and Safety Executive, accessed 16/15/2025, https://www.hse.gov.uk/foi/internalops/hid_circs/permissioning/spc_perm_37/↩︎

145. Alex Chalmers, ‘The bad science behind expensive nuclear’. Works in Progress (2025), https://worksinprogress.co/issue/the-bad-science-behind-expensive-nuclear/↩︎

146. Bernard Cohen, ‘The Nuclear Energy Option’, Plenum Press (1990)↩︎

147. Sam Dumitriu, ‘Why Britain is building the world’s most expensive nuclear plant’, The Spectator (2024), https://www.spectator.co.uk/article/why-britain-is-building-the-worlds-most-expensive-nuclear-plant/; Cf. Jack Devanney, ‘Nuclear Power is Too Safe’, Substack (2023), https://jackdevanney.substack.com/p/nuclear-power-is-too-safe↩︎

148. Our World In Data, ‘Death rates per unit of electricity production’, accessed 06/11/2025, https://ourworldindata.org/grapher/death-rates-from-energy-production-per-twh↩︎

149. Ibid.; this is a facetious argument.↩︎

150. Sam Dumitriu and Michael Hill, ‘A policy playbook for cheaper nuclear’, Britain Remade (2025), https://www.britainremade.co.uk/cheapernuclear↩︎

151. Ibid.↩︎

152. John Fingleton, ‘Nuclear Regulatory Review 2025’, Department of Energy Security and Net Zero (2025), https://assets.publishing.service.gov.uk/media/692080f75c394e481336ab89/nuclear-regulatory-review-2025.pdf↩︎

153. For reference, see page 53 of Ibid.↩︎

154. For (much) more on the negative economic impact of ALARP, read the excellent paper by Sam Dumitriu and Michael Hill, ‘A policy playbook for cheaper nuclear’, Britain Remade (2025), https://www.britainremade.co.uk/cheapernuclear↩︎

155. Bridget Newman, ‘The Nuclear Regulatory Taskforce Interim Report’, Sharpe Pritchard (2025), https://www.sharpepritchard.co.uk/latest-news/energy/the-nuclear-regulatory-taskforce-interim-report/↩︎

156. Ibid.↩︎

157. Sam Dumitriu, ‘What’s taking Britain so long to build new nuclear power plants?’, The Spectator (2025), https://www.spectator.co.uk/article/whats-taking-britain-so-long-to-build-new-nuclear-power-plants/↩︎

158. World Nuclear News, ‘EDF announces Hinkley Point C delay and rise in project cost’, accessed 05/11/2025, https://www.world-nuclear-news.org/articles/edf-announces-hinkley-point-c-delay-and-big-rise-i; Emily Godsen, ‘Hinkley Point C’s soaring costs blamed on red tape’, Sunday Telegraph (2025), https://www.thetimes.com/business-money/economics/article/hinkley-point-cs-soaring-costs-blamed-on-red-tape-2wcw8gxm8↩︎

159. Stuart Crooks, as cited in: Ibid 1.↩︎

160. Emily Godsen, ‘Hinkley Point C’s soaring costs blamed on red tape’, Sunday Telegraph (2025), https://www.thetimes.com/business-money/economics/article/hinkley-point-cs-soaring-costs-blamed-on-red-tape-2wcw8gxm8; Linda Pentz Gunter, ‘What a turkey’, Beyond Nuclear International (2024), https://beyondnuclearinternational.org/2024/01/31/what-a-turkey/↩︎

161. Jan Bartak and Noël Camarcat, ‘Nuclear Power in France and its Contribution to Reaching EU’s Climate Objectives’, NUC Advisor (2022), https://www.nucadvisor.com/post/nuclear-power-in-france-and-its-contribution-to-reaching-eu-s-climate-objectives↩︎

162. World Nuclear Association, ‘Safety of Nuclear Power Reactors’ (2025), accessed 05/11/2025, https://world-nuclear.org/information-library/safety-and-security/safety-of-plants/safety-of-nuclear-power-reactors↩︎

163. BBC News, ‘Nuclear: Hitachi scraps £20bn Wylfa power plant’ (2020), accessed 06/11/2025, https://www.bbc.co.uk/news/uk-wales-54175280↩︎

164. BBC News, ‘PM urged to end new Wylfa nuclear plant ‘uncertainty’ (2023), accessed 06/11/2025, https://www.bbc.co.uk/news/uk-wales-politics-64837049↩︎

165. Office for Nuclear Regulation, ‘Nuclear ventilation codes and standards – Hitachi-GE UK ABWR’ (2017), accessed 06/11/2025, https://www.onr.org.uk/media/oh0ltiac/ro-abwr-0017.pdf↩︎

166. Sam Dumitriu and Michael Hill, ‘A policy playbook for cheaper nuclear’, Britain Remade (2025), https://www.britainremade.co.uk/cheapernuclear↩︎

167. International Atomic Energy Agency, ‘IAEA Team to Report on Kashiwazaki Kariwa Nuclear Power Plant Examination’ (2007), accessed 06/11/2025, https://www.iaea.org/newscenter/pressreleases/iaea-team-report-kashiwazaki-kariwa-nuclear-power-plant-examination↩︎

168. GOV.UK, ‘Golden age of nuclear delivers UK-US deal on energy security’, accessed 06/11/2025, https://www.gov.uk/government/news/golden-age-of-nuclear-delivers-uk-us-deal-on-energy-security↩︎

169. For a more impressive and fleshed out vision of this scheme, Cf. Tym Syrytczyk, Julia Willemyns, Duncan McClements and Jason Hausenloy. ‘Approve Reactor Designs for Cheaper, Greener Energy’, Centre for British Progress (2025), https://britishprogress.org/briefings/approve-reactor-designs-for-cheaper-greener-energy↩︎

170. Sam Dumitriu and Michael Hill, ‘A policy playbook for cheaper nuclear’, Britain Remade (2025), https://www.britainremade.co.uk/cheapernuclear↩︎

171. ICE, ‘UK Emissions Auctions 01-Jan-2025 to 10-Nov-2025’, (2025), https://www.ice.com/report/278↩︎

172. National Audit Office, ‘UK Emissions Trading Scheme’, (2025), https://www.nao.org.uk/wp-content/uploads/2025/06/uk-emissions-trading-scheme-summary.pdf↩︎

173. Ed Hezlet and Patrick Cook, ‘Cut bills & boost electrification by removing carbon price support’, Centre for British Progress (2025), https://britishprogress.org/briefings/cut-bills-boost-electrification-by-removing-carbon↩︎

174. Ibid.↩︎

175. Offshore Energies UK, ‘Economic Report’ (2023), https://oeuk.org.uk/wp-content/uploads/2023/09/Economic-Report-2023-Offshore-Energies-UK-OEUK.pdf.↩︎

176. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Jonathan B. Wight (1776; Harriman House, 2007), p. 536.↩︎

177. James Mirrlees et al., Tax by Design: The Mirrlees Review, (Oxford University Press/Institute for Fiscal Studies, 2011), p. 472.↩︎

178. Office of National Statistics, ‘Effects of taxes and benefits on UK household income: financial year ending 2024’ (2025), https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/2024.↩︎

179. Customs and Excise v United Biscuits, LON/91/0160 (VAT Tribunal 1991), https://www.gov.uk/hmrc-internal-manuals/vat-food/vfood6260.↩︎

180. Alex Mengden and Andrea Nieder, ‘International Tax Competitiveness Index 2025’, Tax Foundation (2025), https://taxfoundation.org/research/all/global/2025-international-tax-competitiveness-index/.↩︎

181. OECD, Consumption Tax Trends 2024: VAT/GST and Excise, Core Design Features and Trends (OECD Publishing, 2024), https://doi.org/10.1787/dcd4dd36-en, p. 111.↩︎

182. For one of the earlier arguments to this effect, see Irving Fisher, ‘The Double Taxation of Savings’, The American Economic Review (1939)↩︎

183. OECD, Revenue Statistics (2025), table 3.12, https://www.oecd.org/en/publications/revenue-statistics-2025_3a264267-en/full-report/↩︎

184. Mitchell Palmer, ‘Stamped Out: The Economics of Abolishing Stamp Duty on Primary Residences’, Adam Smith Institute (2025), https://www.adamsmith.org/research/stamped-out-the-economics-of-abolishing-stamp-duty-on-primary-residences.↩︎

185. William Vickrey, ‘A Modern Theory of Land-Value Taxation’, in Land-Value Taxation, ed. K.C. Wenzer (Routledge, 1999), p. 17.↩︎

186. James Browne et al., ‘A Pro-Growth Roadmap for Business-Tax Reform’, Tony Blair Institute for Global Change (2025), https://institute.global/insights/economic-prosperity/a-pro-growth-roadmap-for-business-tax-reform↩︎

187. Mitchell Palmer, ‘Britain’s Tax System is Blocking Builders’, Adam Smith Institute (2025), https://www.adamsmith.org/research/britains-tax-system-is-blocking-builders.↩︎

188. James Browne et al., ‘A Pro-Growth Roadmap for Business-Tax Reform’, Tony Blair Institute for Global Change (2025), https://institute.global/insights/economic-prosperity/a-pro-growth-roadmap-for-business-tax-reform↩︎

189. Office for Budget Responsibility, ‘The impact of corporation tax changes on business investment’, Economic and Fiscal Outlook – November 2023 (2023), https://obr.uk/box/the-impact-of-corporation-tax-changes-on-business-investment/↩︎

190. OECD, ‘Tax Policy Reform and Economic Growth’ (2010), https://www.oecd.org/en/publications/tax-policy-reform-and-economic-growth_9789264091085-en.html↩︎

191. Alex Mengden and Andrea Nieder, ‘International Tax Competitiveness Index 2025’, Tax Foundation (2025), https://taxfoundation.org/research/all/global/2025-international-tax-competitiveness-index↩︎

192. HMRC, ‘Income Tax Rates and Allowances for Current and Previous Tax Years’, GOV.UK, accessed 5 December 2025, https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past.↩︎

193. HMRC, ‘Tax-Free Childcare’, GOV.UK, accessed 5 December 2025, https://www.gov.uk/tax-free-childcare.↩︎

194. ‘Who Will Speak for Henry?’, The Economist, 26 March 2025, https://www.economist.com/britain/2025/03/26/who-will-speak-for-henry; Dan Neidle, ‘How to Reform Income Tax: End the High Marginal Rate Scandal’, Tax Policy Associates (2024), https://taxpolicy.org.uk/2024/10/17/reform-income-tax-end-the-scandal-of-high-marginal-rates/.↩︎

195. National Audit Office, ‘The Administrative Costs of the Tax System’ (2025), https://www.nao.org.uk/reports/the-administrative-cost-of-the-tax-system↩︎

196. Alina Barnett and Ryland Thomas, ‘Has weak lending and activity in the United Kingdom been driven by credit supply shocks?’, Bank of England (2013), https://www.bankofengland.co.uk/working-paper/2013/has-week-lending-and-activity-in-the-uk-been-driven-by-credit-supply-shocks↩︎

197. Ibid.; William Basset et al., ‘Changes in bank lending standards and the macroeconomy’, Journal of Monetary Economics (2014), https://doi.org/10.1016/j.jmoneco.2013.12.005↩︎

198. PwC, ‘Hot Topic: The UK’s Approach to Setting MREL’ (2015), https://www.pwc.co.uk/assets/pdf/mrel-hot-topic-final.pdf.↩︎

199. Marc Farag et al., ‘Bank Capital and Liquidity’, Bank of England (2013), https://www.bankofengland.co.uk/quarterly-bulletin/2013/q3/bank-capital-and-liquidity.↩︎

200. Fabio Cortes et al., ‘Recycling Risk: Synthetic Risk Transfers’, International Monetary Fund (2025), https://www.imf.org/en/publications/wp/issues/2025/10/03/recycling-risk-synthetic-risk-transfers-570914.↩︎

201. See, for instance, the continuing controversy surrounding AT1 instruments that has arisen from the collapse of Credit Suisse: ‘Japanese Investors Sue Switzerland over Credit Suisse’s AT1 Write-down, Law Firm Says’, Reuters (2025), https://www.reuters.com/business/japanese-investors-sue-switzerland-over-credit-suisses-at1-write-down-law-firm-2025-12-04/.↩︎

202. Akash Raja, ‘The impact of changes in bank capital requirements’, Bank of England (2022), https://www.bankofengland.co.uk/working-paper/2022/the-impact-of-changes-in-bank-capital-requirements.↩︎

203. Douglas W. Diamond and Philip H. Dybvig, ‘Bank Runs, Deposit Insurance, and Liquidity’, Journal of Political Economy (1983)↩︎

204. Hyun Song Shin, ‘Reflections on Northern Rock: The Bank Run that Heralded the Global Financial Crisis’, Journal of Economic Perspectives (2009)↩︎

205. ‘The failure of the Royal Bank of Scotland’, Financial Services Authority (2011), https://www.fca.org.uk/publication/corporate/fsa-rbs.pdf.↩︎

206. Bagehot’s dictum is that central banks should lend freely and early to any solvent financial institution against good security, but at high rates, in order to prevent panic. It is a very sensible policy prescription, given the fundamental instability of fractional-reserve banks. See Walter Bagehot, Lombard Street: A Description of the Money Market (Hyperion Press, 1962 [1873]), https://fraser.stlouisfed.org/title/lombard-street-3603↩︎

207. Philip Aldrick, ‘BOE Wants Banks to Remove Extra Capital Buffers in Growth Drive’, Bloomberg News (2025), https://www.bloomberg.com/news/articles/2025-11-05/boe-wants-banks-to-remove-extra-capital-buffers-in-growth-drive↩︎

208. Lexis Nexis and Oxford Economics, ‘True Cost of Compliance’ (2023), https://www.oxfordeconomics.com/resource/true-cost-of-compliance-2023-report/↩︎

209. Deloitte Economics, ‘Phase II Anti-Money Laundering Reforms Business Compliance Impacts’, New Zealand Ministry of Justice (2016), https://www.justice.govt.nz/assets/aml-phase-2-business-compliance-impacts.pdf↩︎

210. Financial Conduct Authority, ‘UK Payment Accounts: access and closures’ (2023), https://www.fca.org.uk/publication/corporate/uk-payment-accounts-access-and-closures.pdf↩︎

211. Jamie Whyte, ‘Debanked: The Economic and Social Consequences of Anti-Money Laundering Regulation’, Institute of Economic Affairs (2024), https://iea.org.uk/publications/debanked-the-economic-and-social-consequences-of-anti-money-laundering-regulation/. National Audit Office, ‘Home Office 2024-25’ (2025), https://www.nao.org.uk/wp-content/uploads/2025/10/home-office-overview-2024-25.pdf.↩︎

212. Norbert Michel and David Burton, ‘Financial Privacy in a Free Society’, Heritage Foundation (2016), https://www.heritage.org/markets-and-finance/report/financial-privacy-free-society↩︎

213. ‘The United Kingdom’s progress in strengthening measures to tackle money laundering and terrorist financing’, Financial Action Task Force (2022), https://www.fatf-gafi.org/en/publications/Mutualevaluations/Fur-united-kingdom-2022.html↩︎

214. Sebastian Barnes et al., ‘The GDP Impact of Reform: A Simple Simulation Framework’, OECD (2013), https://www.oecd.org/content/dam/oecd/en/publications/reports/2013/06/the-gdp-impact-of-reform_g17a1f38/5kgk9qjnhkmt-en.pdf. OECD, ‘Strictness of employment protection’ (2019), https://data-explorer.oecd.org/vis?df[ds]=DisseminateFinalDMZ&df[id]=DSD_EPL%40DF_EPL&df[ag]=OECD.ELS.JAI&dq=A..EPL_OV..VERSION4&pd=2000%2C&to[TIME_PERIOD]=false&vw=tb↩︎

215. Deloitte Legal, ‘International Employment Law Guide’ (2024), https://www.deloitte.com/global/en/services/legal/analysis/international-employment-law-guide.html↩︎

216. ‘British “equal value” lawsuits have become an absurd denial of markets’, The Economist (2025), https://www.economist.com/britain/2025/02/06/british-equal-value-lawsuits-have-become-an-absurd-denial-of-markets↩︎

217. Andrew Ellison, ‘UK’s world-beating minimum wage poses problems for business’, The Times (2025). https://www.thetimes.com/business-money/money/article/minimum-wage-britain-higher-world-02tlvm9ch↩︎

218. Brooke van Velden, ‘Changes to improve pay equity process’, New Zealand Government (2025). https://www.beehive.govt.nz/release/changes-improve-pay-equity-process.↩︎

219. Christoph Boehm et al., ‘The Long and Short (Run) of Trade Elasticities’, American Economic Review (2023); Keith Head and Thierry Mayer, ‘Gravity Equations: Workhorse,Toolkit, and Cookbook’, Handbook of International Economics (2013); George Alessandria et al., ‘Recovering Credible Trade Elasticities from Incredible Trade Reforms’, NBER (2025); James Feyrer, ‘Trade and Income—Exploiting Time Series in Geography’, American Economic Journal: Applied Economics (2019).↩︎

220. Mitchell Palmer, ‘Beyond Tariff Reduction: A Libertarian Approach to Reducing Non-Tariff Barriers’, Liberty and Security in an Anarchical World, Volume I (2024). https://doi.org/10.1007/978-3-031-70525-0_10↩︎

221. Airports Commission, ‘Final Report’ (2015), https://assets.publishing.service.gov.uk/media/5a808ab4e5274a2e8ab50bd4/airports-commission-final-report.pdf↩︎

222. Matthew Lesh, ‘Ready for Takeoff: Building competition in the aviation industry’, Adam Smith Institute (2019), https://www.adamsmith.org/research/ready-for-takeoff↩︎

223. Mert Demirer et al., ‘Data, Privacy Laws and Firm Production: Evidence from the GDPR’, NBER (2024), https://www.nber.org/system/files/working_papers/w32146/w32146.pdf↩︎

224. Rebecca Janßen et al., ‘GDPR and the Lost Generation of Innovative Apps’, NBER (2022),↩︎

225. Jian Jia et al., ‘How Does Privacy Regulation Affect Transatlantic Venture Investment? Evidence from GDPR’, NBER (2025); Jian Jia et al., ‘The Short-Run Effects of GDPR on Technology Venture Investment’, NBER (2018)↩︎

226. Cf. Mitchell Palmer. ‘Foreboding Fiscals’, Adam Smith Institute (2025), adamsmith.org/research/foreboding-fiscals/.↩︎

227. Paul Krugman, The Age of Diminished Expectations: U.S. Economic Policy in the 1990s (MIT Press, 1994), p. 11.↩︎