Room for improvement: How drug consumption rooms save lives

A new report by Jarryd Bartle, a drug policy consultant and university lecturer, calls for Britain to introduce life-saving Drug Consumption Rooms:

• Drug consumption rooms are an evidence-based harm reduction intervention which allow people who use illicit drugs to do so within a medically supervised environment.

• The use of drug consumption rooms in other jurisdictions has been shown to reduce drug-related deaths, reduce health burdens and decrease public injection and syringe litter.

• Supervised Drug Consumption Rooms are effective at engaging hard to reach, highly marginalised populations with drug treatment, healthcare and other services. People in treatment use less illegal heroin and other drugs, potentially reducing the scale of the illegal drugs market.

• Concerns that drug consumption rooms will increase drug use, attract substance users to an area or increase local crime are not supported by research.

• A large majority (89%) of drug users are willing to use a drug consumption room.

  The UK is falling behind the rest of the world, including countries such as Australia, Canada, Denmark and France which are increasingly adopting drug consumption rooms as part of drug harm reduction strategies. 

• This paper recommends that the UK prioritises the introduction of an integrated drug consumption room in an area identified as being of increased risk of drug-related harms.

• Drug consumption rooms currently sit in a legal gray zone, leading to a lack of willingness by local authorities to introduce this proven harm reduction strategy. This could be addressed by:

  • 1. An explicit statement by the Home Office that the operation of DCRs is a matter for local authorities; specific rules could then be agreed by police forces, the Crown Prosecution Service (CPS), health bodies and local authorities; and

  • 2. The UK Parliament passing legislation that makes it explicitly legal to take controlled substances within such facilities in specified circumstances.

How to Make Long-Distance Work: Fixing Britain’s railways with open access

A new report by Adrian Quine, rail consultant and journalist, and Sophie Jarvis, Head of Government at the ASI, calls for the abolition of the current monopoly franchise system for trains and replacement with an Open Access system:

• Open Access, by enabling competition between operators on the same route, drives down costs and ticket prices, improves passenger satisfaction, increases frequency, and encourages innovation. 

• Fares are up to 55% cheaper on routes on Open Access routes compared to where a single monopoly franchise operates.

• Open Access operators have the highest level of passanger satisfaction. Open Access operator Grand Central has had the largest increase of passengers of any train company, up 12% over 2017-18, discluding Transport for London services.

• Under Open Access new routes have been opened by operators, giving smaller stations direct, fast, long-distance services without the need to change trains. These new rail destinations drive economic growth, social mobility and wider prosperity.

• The running costs of Open Access operators is lower than the heavily unionised monopoly franchise operators, resulting in lower passenger fares.

• In order to expand rail competition, this paper In order to expand rail competition, this paper recommends:

  • 1. Abolishing the current monopoly franchise system for long distance rail routes and replacement with an Open Access system.

  • 2. In the meantime, the creation a level playing field between Open Access and monopoly franchise operators by:

    • a. Abolishing the Not Primarily Abstractive (NPA) test, which limits which tracks Open Access operators can use. 

    • b. Introducing parity between the track access charges for monopoly franchise operators and the open access operators. 

  • 3. Reverse auctions to allocate operators and decide the subsidy level for less profitable stations.

Build, Baby, Build!

In a new paper Senior Fellow Nigel Hawkins explains how we can get Britain building and end the housing crisis:

• During the 1950s, the UK’s annual new house-build exceeded 300,000 units. Prior to the introduction of wide-ranging planning legislation in 1947, the annual figure had been even higher in the 1930s.

• In recent years, despite a steadily rising population, around 200,000 new units per year have been built, so that the English housing stock figure is now c23.8 million dwellings. The shortfall in new housing stock has contributed to soaring property prices, and the consequential erection of major financial barriers to first-time buyers.

• For under-35s, unless they are high earners or the beneficiaries of family financial support, the hopes of becoming a homeowner before their mid-30s are receding. Many of this age-group are accepting—perhaps reluctantly—the attractions of home rental rather than home ownership.

• Following the financial crisis in 2008/09 and despite ultra-low interest rates subsequently, securing the necessary mortgage has often been challenging; indeed, house-building levels fell.

• While constructing more homes is a widely-held priority, volume housebuilders (VHBs) face real challenges in navigating the time-consuming planning process, before even a brick is laid.

• This Paper examines a number of potential ways that Britain could increase the level of housebuilding at a national and local level: Local authorities must reverse their opposition to smaller units in order to provide Londoners with more housing choice at affordable levels.

1. Major planning reform

2. Modest Green Belt encroachment

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

4. Dismantling some rental restrictions covering Housing Associations

5. Promoting innovation within the house-building sector

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

7. Developing surplus public land

8. Kickstarting the New Garden Towns proposals

Size Doesn’t Matter: Giving a green light to micro-homes

A new report by Vera Kichanova, an urban policy researcher with Zaha Hadid Architects and PhD student at King's College London, argues that Britain should legalise micro homes:

• Housing is the most crucial problem faced by Londoners as supply has not kept pace with demand, leading to a quintupling of average prices over the past 50 years.

• Many are now forced to endure long commutes, live in overcrowded shared flats, or leave the city. In the past 20 years, London’s population has grown by 25%, but the number of homes by only 15%. By 2025, 3.5m Londoners will be living in rented housing, with 79% of the adults who moved to London in the last year renting.

• In addition to reforming the planning system to allow more houses to be built, micro-housing would enable land to be used more efficiently.

• Micro-housing is not for everyone, however, for many younger individuals smaller homes would provide the opportunity to live centrally: close to work, entertainment and other amenities at an affordable price.

• Micro-housing is about expanding the choices available to the many Londoners who are open to living in smaller apartments.

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

• Local authorities must reverse their opposition to smaller units in order to provide Londoners with more housing choice at affordable levels.

Flexible Right to Buy

Many in council subsidised accommodation are trapped paying rent to the state due to current prices in the UK’s cities. High prices mean, even with the current Right to Buy discount, that many mortgages are out of reach for those in these homes. Today we call for a reboot of Help to Buy: by making it flexible.

• UK has the second-largest social housing sector in the EU, and over half of tenants in the sector want to own their own home.

• The Right to Buy works for some, but some social tenants live in expensive properties which they cannot afford to buy.

• Almost 700,000 local authority owned homes are in areas where median house prices exceed £250,000. Over 200,000 of these are in areas where median house prices exceed £500,000.

• Social tenants eligible for the Right to Buy should be given a Flexible Right to Buy, entitling them to buy a new home, using the value of their Right to Buy discount.

• The tenant’s previous home would then be sold, funding the discount and raising additional revenue.

• A conservative estimate of the impact would see 21,000 tenants take advantage of the scheme with £2 billion of discounts on £9 billion of stock and net receipts of £7 billion.

• An ambitious estimate of the impact would see 197,000 tenants benefit, with £83 billion of stock and £21 billion of discounts and net receipts of £62 billion.

• Housing stock would be better matched to people’s circumstances, with a cooling effect on overheated local markets.

• Some friction would be removed from labour markets, resulting in improved productivity and wages.

Read the whole paper here.

Capping competition

New report by Sam Dumitriu looks at dangers to the Energy market by government intervention, and just what the Government should do to encourage competition.

• Big 6 energy suppliers should be invited to sell off 10% of their customer base to allow a new entrant to enter the market and boost competition for consumers; this would follow a proposal by Professor Stephen Littlechild that suppliers should be forced to sell customer bases as National Power and Powergen were as power generators.

• Price differences between “rip off” Standard Variable Tariffs (SVTs) and cheaper fixed tariffs are not evidence of low levels of competition. In fact, large price differences between similar products are frequently observed in highly competitive markets.

• International evidence suggests that price caps reduce rates of customer engagement (measured by switching), lead to higher average costs, and result in inefficient pricing arrangements.

• Reduced customer engagement will reduce the prospects of innovation within the energy market in the medium-to-long term to the detriment of consumers.

• Price controls would threaten an environment of permissionless innovation where suppliers can offer new pricing models without asking for regulatory approval. Dynamic pricing models could accelerate the roll-out of low-carbon renewables and home batteries, but such models rely on peak-time surge pricing.

• Relative price caps will also likely lead to reduced customer engagement, lesser competition in the fixed rate market and higher mark-ups on SVTs – with profits flowing to suppliers and not savings to consumers.

• Evidence from Australia suggests that caps harm competition and lead to worse long-run deals for consumers. In 2012 when Queensland's politics forced a lowering of the price cap just over 45% were on the standing offer, and 40% on medium-level discounts; by 2015 the number accessing discounts had halved with proportion on standard level at the same amount. In contrast, deregulated Victoria saw the proportion on standing offers almost halve over the same period as the proportion accessing high-level discounts increased rapidly.

• There are a number of alternative measures that would cut costs for vulnerable customers without reducing customer engagement and stifling innovation. These include opt-out collective switches and allowing competitors to target disengaged customers with direct marketing.

Don't have a cow, man: The prospects for lab grown meat

Researcher Jamie Hollywood and Adam Smith Institute President Dr Madsen Pirie discuss the potential for lab grown meat to save lives and the environment. 

Executive Summary:

• Demand for meat has grown along with incomes. During the 1960s meat consumption in East Asia stood at just 8.7kg per person, thirty year later that figure was 37.7kg – an increase of over 330%. This increased demand has meant huge swathes of land given over to meat production. While 19 people can be fed from just a single hectare of rice, only one can person can be fed per hectare dedicated to cattle.
   
• Lab grown (or cultured) meat could mean a cut in agricultural greenhouse gas emissions of 78-96% while using 99% less land. 
   
• While growing meat in a lab has been difficult to master, and costly to engineer, the price has been falling. Just five years ago the cost of a burger made with meat grown in a lab stood at $250,000, but now the price tag has dropped to just £8. 
   
• Cultured meat has the potential to solve the looming antibiotic resistance crisis. With farming using up to 70% of antibiotics critical to medical use in humans, cases of resistance are on the rise, driven by intensive farming practices.
   
• Cultured meat will also reduce cases of food poisoning as, unlike on farms, growth takes place under controlled conditions.
   

Asleep at the wheel: the Prudential Regulation Authority & the Equity Release Sector

Professor of finance and economics at the University of Durham, Kevin Dowd, takes a critical look at the Equity Release Mortgage sector and finds something really quite worrying:

• There is a scandal brewing in the Equity Release Mortgage sector. This scandal is similar in nature to the Equitable Life scandal of nearly two decades ago – it involves the underestimation of opaque long-term guarantees – but on a larger scale.  
• The guarantees at the heart of this problem are the No-Negative Equity Guarantees issued by lenders in the Equity Release market. These guarantee that the maximum repayment on Equity Release loans can be no greater than the property price at the time of repayment.  
• This under-valuation problem is a ticking time bomb that could do serious damage to the financial health of the Equity Release sector. 
• The regulator, the Prudential Regulation Authority, has made half-hearted efforts to address this under-valuation problem, but has for years failed to rein in firms that used inadequate valuation methods for their No Negative Equity Guarantees.  
• A recent Treasury Committee investigation into the UK life industry missed these problems and unwisely set up the Equity Release sector as a poster child to be promoted. 
• This Equity Release guarantee scandal raises far-reaching questions not just about the Equity Release sector, but also about the PRA’s supervision of it. 

Drivers of Safety: The outdated practice of MOT testing

Economist Alex Hoagland puts the MOT to the test. He finds that mandatory vehicle safety inspections have few safety benefits and that motorists could be up to £250m better off each year if they were scrapped.

Executive Summary:

• The MOT requires drivers of any vehicle older than 3 years to pay between £30 and £80 annually for vehicle safety inspections, generating over £250 million in yearly revenue for more than 20,000 garages throughout Britain. However, this industry has not been rigorously evaluated for over 20 years.
• The idea of vehicle safety inspections is an outdated one stemming from widespread use of unsafe vehicles in the 1950s. Over the years, reforms have added burdens to drivers rather than removed them due to an unsubstantiated assumption that inspections increase safety. However, this assumption has proven to be inaccurate.
• As vehicle technology increases, annual safety inspections are rendered more and more useless. While the MOT has remained essentially unchanged for half a century, improvements in vehicle safety technology have spurred a 55% decline in traffic fatalities over the last 10 years.
• Mechanical failure accounts for merely 2% of all accidents in the United Kingdom, the same rate as other regions that do not require comparable inspections (for example, the greater portion of the United States). A recent 2018 study performed in the United States shows that discontinuing these inspections has no effect on either the rate or severity of accidents due to mechanical failure.
• Furthermore, over 65% of accidents in the United Kingdom are due to driver-specific behaviours, such as driving with excessive speed, driving under the influence of alcohol, or forgoing the use of a seat belt while travelling—none of which an annual MOT test can prevent. 
• If the MOT is not abolished, it should at least be overhauled substantially to place emphasis on driver-specific behaviours, rather than vehicle-specific ones. At a minimum, the age of testable cars ought to be increased and the frequency 2 of inspections reduced.