- The National Living Wage, announced in the 2015 Autumn Statement and effective from 1 April 2016, effectively takes control of the Minimum Wage out of the hands of the Low Pay Commission and gives it to the government.
- Whereas the LPC had a mandate to balance both pay and employment concerns, free from political pressure, the issue is now politicised.
- There are worries that abandoning this framework will threaten employment: the Office for Budget Responsibility projected last year that 60,000 fewer jobs will be created under this regime than the previous status quo.
- This paper reviews the empirical evidence on the direct and indirect impacts of increases to the Minimum Wage.
The people of California have just voted to legalise cannabis – a decision which will have immense repercussions both in America and around the world, while efforts are already underway in Canada to legally regulate the cannabis market. The Tide Effect argues strongly that the UK should follow suit, and that the legalisation of cannabis here is both overdue and imperative.
The eight main points outlined in The Tide Effect are:
The government strategy is based around three main pillars: reducing demand, restricting supply and building recovery. All three are failing.
Regulation is substantially more desirable than simple decriminalisation or unregulated legalisation, because only regulation addresses all four key issues: ensuring that the product meets acceptable standards of quality and purity; removing criminal gangs from the equation as far as possible; raising revenue for the Treasury through point-of-sale taxation; and best protecting public health.
The entire language used to address cannabis-related issues needs to change. Language poses a barrier every bit as formidable as legislation does. The opponents of legalisation have long been able to reinforce their position by using the words of public fear
– ‘illegal,’ ‘criminal’, ‘dangerous’, and so on. Only by using the language of public health, consumer rights and harm reduction, the same language used about alcohol and tobacco, can we move towards regulation.
The scale of a legalised industry will be huge. The US market is estimated to be worth $25bn by the time of the next election in 2020. A similarly regulated UK market could be worth around £7bn per annum.
Legally regulating cannabis will allow long-term studies of its health effects not currently possible. The effects of both tobacco and alcohol are well understood because of the amount of scientific scrutiny brought to bear on them.
Many shifts in public policy are prompted, or at least prodded, by an emotional response on the part of the public. Greater efforts must be made to show that the cannabis issue also has a human aspect to which many people respond.
Any campaign to legalise cannabis must be multifaceted, involving public support, media analysis and political engagement.
Responsibility for cannabis policy should be moved primarily to the department for Health, while the role of the Home Office should change from enforcement of prohibition to enforcement of regulation and licensing.
Read the full paper here.
Supporters of renewable energy argue that wind- and solar-generated electricity can form the basis of a secure, affordable, low carbon energy supply for the UK and EU, despite the inherently variable and intermittent nature of these sources.
• This paper first contributes to the debate by estimating the output of a model UK fleet of solar farms rated at 8.4GW, by using ten years of half-hourly aviation weather reports as a data source.
• The key findings for such a solar fleet are that:
- It has a capacity factor of just 9% when the panels are new, and so generates less than a tenth of its nominal output over the course of a year.
- It produces hardly any power in winter when demand is highest.
- Power output is severely intermittent, lying below 10% of installed capacity for 5,790 hours a year and exceeding 60% for only 7.
• The claim that a mixture of solar and wind generation can smooth out this intermittency is found untrue. Under this compounded system, power output falls below 10% of installed capacity 97 times a year for periods of between 6 and 141 hours.
• This study evaluates three other proposed solutions to the intermittency problem, and comes to the following conclusions:
- Pumped storage is currently the best and most cost-effective solution for large-scale energy storage, but would be enormously expensive on such a huge scale and have a severe environmental impact, even in the unlikely event that enough UK sites could be identified.
- Battery storage on this scale is likely to be even more expensive and batteries would require frequent replacement.
- Interconnectors to a northern European renewable-energy grid would be ineffective, because both solar and wind resources vary with time across the region in much the same way as for the UK.
• With the energy storage technology available for the foreseeable future, no combination of wind and solar energy with backup storage would be suitable to supply a significant proportion of grid electricity without full conventional backup being available.
• However, intermittent renewable energy could have a useful role to play if it was used primarily for domestic space and water heating. An option which has been successfully implemented in New Zealand in the past.
Read the full paper here.
- In a complex world, there will be times when our actions have consequences that we could not have foreseen, however good our intentions were. This complexity is one of the major challenges in public policy: it is what divides people with similar goals, and what demands rigorous analysis of public policy.
- Most people fall somewhere in between paternalism and libertarianism. They regret the harms that alcohol and tobacco cause to heavy users, but also believe that those users should have the right to take those if they are aware of the harms and aren’t hurting other people. For these people, though they are not libertarians, liberal harm reduction is the key – not rigid prohibitionism.
- For the authors of the papers in this book, government bans on harmful behaviour do not automatically reduce harm. Indeed, because of the complexity of society and the difficulty of making good public policy, these bans (or other restrictions) may have the opposite effect, and increase harm to the public.
- By stifling innovation, regulation may freeze products in a state that is far less safe than free-wheeling capitalism would otherwise provide. Given that most smokers or drinkers would prefer not to die young or suffer from chronic illnesses, there is a clear (and perhaps very strong) profit incentive for the firm that can replicate the experience of smoking a cigarette without producing the harm that cigarettes do.
- A ‘permissionless innovation’ approach may be the best way forward. In this framework, firms are free to innovate and markets anything they like to consumers, with the proviso that untested products must be explicitly marketed as such, with the firm forced to pay the price if and when things go wrong. A regulatory approach on this basis would create a pathway for new reduced-risk products that were, if not 100% safe (such a thing is impossible), a lot safer than the things they were replacing
Read the paper in full here.
• Britain’s Border Force is not equipped to quickly, accurately and securely monitor passengers in and out of Britain. After Brexit it will become even more important for Britain’s borders to be secure.
• The Warning Index and Semaphore systems the Border Force uses are years out of date, and at times 7.5% of high risk flights have not been properly screened, which if representative of the whole year would translate into over four thousand high-risk flights not being met. This has allowed known terrorists to leave the country without being detained properly.
• The Border Force operates a slow service at peak times: during the summer of 2016, an average of three out of four Heathrow Terminals every month failed their target wait times for non-EEA passengers through passport control.
• After sovereignty, polls have found control of the UK’s borders to be the second most important driver of voting for Brexit, and many voters desired sovereignty itself in order to control who comes in and out of the country.
• Public trust in the UK immigration system, and its key enforcer, the UK Border Force, is crucial in order for the UK to have a sensible immigration policy.
• The Border Force is only collecting data from the Advanced Passenger Information System for 86% of passengers, making a mockery of “exporting the border” claims.
• Some past collaborations with the private sector, like the Raytheon project, have turned out badly, but these involved heavy governmental micromanagement; decentralised private companies like AirBnb prove that the private sector can create high trust, heavily-vetted systems.
• The government must thoroughly modernise the force and deliver a new, realtime database and biometric scanning system, collaborating with the private sector to deliver a technological solution and paying for results, not trying to build its own system from the ground up.
Read the full report here.
- Following last year’s decisive General Election result, this Paper addresses the key issues affecting the UK railways sector – and especially those relating to its financing. It advocates the need for concerted action on several railway fronts.
- Network Rail, with its £41.6 billion of net debt now on the public balance sheet, should be progressively sold down. An initial 49.9% sale to long-term investing institutions is proposed; in the interim, its finances need major over-hauling. The eventual aim should be to create a railway equivalent of National Grid - now worth over £40 billion - in the electricity sector.
- Whilst the re-imposition of vertical integration of the railway network would be immensely challenging, some smaller lines could be progressively divested by Network Rail as part of a local transportation policy. The Merseyrail structure offers a possible template. In the longer term, integrated regional railway companies could emerge. In the utility sector, National Grid’s sale of some gas distribution networks also provides a relevant precedent.
- Currently, open access concessions account for less than 1% of passenger journeys. However, this figure would rise sharply if the Office of Rail and Road (ORR) were more pro-active in promoting open access schemes – and made its abstraction formula less onerous to such applicants. Alliance Rail has been at the forefront of winning open access approvals.
- Although the much-criticised franchise system should be retained, the Department for Transport (DfT) and ORR should crack down hard on under-performing rail franchise holders. Substantial fines could be levied, senior management changes demanded or the ultimate sanction - franchise withdrawal - could be imposed.
- The controversial £50+ billion High-Speed 2 project should be scrapped on grounds of excessive cost compared with the questionable benefits that may accrue. The numbers, including the projected Benefit/Cost Ratio, simply do not stack up.
- Instead, a far less grandiose, more piece-meal, investment approach is needed to deal with understandable concerns about the overcrowding at some peak periods on the southern parts of the West Coast Main Line (WCML). Overall seat occupancy on the WCML remains well below 60% compared with the near 90% figure achieved by leading budget airlines.
- The embryonic Northern Powerhouse initiative merits detailed study. Designing new railway infrastructure, centring on the Manchester/Leeds hub, is pivotal. In time, this should embrace points west at Liverpool and points east at Hull. It is important, too, that the delayed London to Sheffield Midland Mainline and the TransPennine Express electrification schemes are accorded a high priority.
- With EU regulation creating far more opportunities for the railways sector, UK companies are planning to expand overseas. Indeed, Arriva – now owned by Deutsche Bahn - has recently won several train franchises in Europe. Network Rail is well-placed to develop a sizeable overseas business, given the UK’s extensive railway construction activities during the days of Empire.
Read the whole paper here
This new report, written by the Institute's President Dr. Madsen Pirie, calls on the government to take back control of UK waters and bring an end to the billions of fish thrown back dead into the sea each year.
The report lays out a comprehensive ten point plan for how Britain can replenish its waters following Brexit and reveals the full extent of the damage caused by the European Common Fisheries Policy (ECFP).
- Extension of Exclusive Economic Zone from 12 miles to the 200 miles from UK shores as specified by the United Nations International Convention on the Law of the Sea.
- Ban fishing in UK waters without specific consent and require all boats to be registered.
- Naval and air patrols over UK fishing waters to identify and intercept illegal fishing.
- Creation of a Maritime Research Institute tasked with monitoring fish stocks, examining the levels of the different species, mapping breeding grounds, and recording all catches made within UK waters.
- Creation of a National Fisheries Council to determine a total allowable catch for each species and assign a quota to each registered fishing vessel that is divisible and tradable. All catches must be landed, and if any exceed the quota, the vessel must trade or buy quotas from others.
- All boats fitted with satellite tracking devices, and their position constantly indexed.
- All catches size and species recorded on landing with information uploaded to a public database.
- UK fishing waters divided into administrative zones with the National Fisheries Council able to impose an immediate suspension of fishing in any areas where the sustainability of any fish stocks appears to be at risk.
- Inspections from the National Fisheries Council on any boat two times per year.
- The National Fisheries Council and the Maritime Research Council to publish all their information online, accessible to members of the public as well as to the industry.
Read the full report here.
• The UK has an effective ban on standing sections in football stadia in the top-two tiers of English & Welsh football
• A recent inquiry does not find standing responsible for the Hillsborough Disaster; by contrast, poor management and policing are judged the culprit; many other recent stadium disasters have happened despite all-seater stadia
• Advances in seating technology and stadium management make ‘safe standing’ a plausible option for sections of UK football stadia
• Experience from other sports, lower football tiers, and around Europe show standing can be safe
• Fans overwhelmingly support the reintroduction of some standing in football stadia, including female fans, whenever they are asked
• Standing can increase densities, sometimes modestly, and sometimes impressively: this means lower prices for the same revenue, and more price points for clubs to offer
• European clubs with standing in their stadia have a much wider variation between the cheapest and most expensive tickets: even if Premier League clubs kept their most expensive ticket the same price, bringing the ratio of standing available up to the European level would cut the average cheapest season ticket by 57%, from £514 to £221
• The UK government should liberalise the safety regime to allow for limited safe standing sections in Premier League and Championship football clubs
Read the full paper here.
“No Stress II: the flaws in the Bank of England’s stress testing programme”, challenges the stress tests carried out by the Bank of England to assess the financial resilience of UK banks, and refutes their claim that major UK banks could withstand another big shock.
The report's release comes as Europe faces a renewed banking crisis. There is already a major crisis in Italy and mounting concerns about Deutsche Bank, the biggest bank in Europe and recently described by the International Monetary Fund as the most systemically dangerous bank in the world.
Read the paper online here.