CASH-STRAPPED COUNCILS CAN COUNT ON PLANNING REFORM

New paper identifies another way to grow Britain
•    Government could unlock billions in extra funding for councils
•    Councils should be allowed to buy land grant planning permission on it and then sell at higher value – capturing the uplift in value themselves
•    Could bring in almost £30bn from the first million permits issued by cash-strapped councils
•    This proposition would raise growth and revenues for local authorities; with no taxes imposed and no extra borrowing
 
Councils should be empowered by Government to purchase land, grant themselves planning permission and sell it on – with funds retained locally - the Adam Smith Institute argues today in a report released today.

The report’s author Dr Madsen Pirie, President of the Adam Smith Institute, says that devolving power to local councils to purchase land and grant themselves permission on it can deliver money into their coffers and bring a house building revolution.

The report argues that the Government should let councils buy land, grant it planning permission and then sell it off – benefiting from the corresponding increase in its value. This process could yield billions of pounds to pay for public services - £30bn from the first million units according to the paper’s estimates.

Land with planning permission is extremely scarce. One estimate found that an acre of land was worth £2,500 without planning permission and £4m with it. By granting permission to land they own, councils can capture the monetary benefits for themselves and their residents.

A further advantage of this new initiative is that it would clear the way for many new houses to be built where people want them – relieving the pressure on the housing market and enabling young people once again to aspire to home-ownership.

The paper says that by allowing councils to purchase land and grant themselves planning permission there would be no need to impose new taxes nor increase borrowing with a burden on future generations. It would, however, boost growth with the accelerated house-building programme it facilitated creating jobs. This in turn would increase tax revenues without the need to hike rates.

With austerity under attack from both the political establishment and the electorate it might be an opportune time to try a new approach. The paper argues the Government will find it extremely difficult to meet its spending commitments while softening some of its expenditures without seriously exploring options such as this.
 
Sam Bowman, Executive Director at the Adam Smith Institute, said:
“Right now, if you own a field that gets planning permission, you could stand to gain one or two hundred times in value what the field was originally worth. That massive uplift is called “planning gain” and the fact that local communities mostly don’t capture it is one reason they oppose new development so much – they only stand to lose from new houses being built near them.

“We need to change that. Not only would a system like the one we’re proposing make housebuilding much easier in the places it’s needed most, it would create a large and lucrative source of revenue for local government. That would truly be a win/win for everyone: more houses, more money for locals, and less of a drain on central government which can redirect some of the money saved to other areas.”

To read the full paper please click here.

For further comments or to arrange an interview, contact Matt Kilcoyne, Head of Communications, matt@adamsmith.org | 07584 778207.

Sadiq Khan should drop his loony language tests for cab drivers

The Adam Smith Institute supports Uber's appeal of the bonkers English language tests for minicab drivers that Sadiq Khan and TfL have made compulsory.

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

"Uber is right to appeal against Sadiq's bonkers written English language tests for private hire drivers.

"Passengers rightly expect to be able to communicate with their drivers in English but Sadiq's written English tests are excessive. London minicab drivers of twenty years or more must pay £200 to answer essay questions about topics like the Aurora Borealis, snowboarding and Mars. What next? Three paragraphs on Macbeth?

"The test is even hitting native English speaking drivers who've been working in London for 30 years and can't dig out their old O-Level certificates. It defies common sense. These tests risk putting hard working minicab drivers out of work – pushing prices and wait-times up for ordinary consumers.

"Most Londoners will want a driver who can get them from A to B not an expert on the Northern Lights. Sadiq should drop these loony language tests."

For further comment or to arrange an interview please contact Matt Kilcoyne, via email (matt@adamsmith.org) or phone 07584778207.

Kind regards,
Matt

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

On Tuesday 27th June it was announced that the European Commission had fined Google €2.42bn for breaching EU antitrust laws. The Adam Smith Institute is damning in its criticism of that ruling.

Sam Bowman, Executive Director at the Adam Smith Institute, said in reaction to this morning's news:

"In fining Google this morning for giving prominence to its Google Shopping service European Regulators made the same mistake that regulators did in the 1990s when Microsoft was fined for bundling Internet Explorer with Windows products.

The basic error is to assume companies like Google and Microsoft are akin to 'Natural Monopolies.' If a user experience is made worse by Google Shopping being prioritised then users will have the option of moving to a search engine like Bing - not to mention there would be an incentive for large existing rivals like Facebook to create their own rival platform. If people can switch between platforms it doesn't matter much if, within a platform, there isn't that much competition.

The core issue here is whether we need to force competition within software platforms if competition exists between them. Just as use of Windows declined steadily as users moved to other operating systems so Google users have plenty of alternatives they can switch to if bundling worsens the platform's quality enough. Bundling has benefits as well as costs, because it pays for the free things Google does, and trying to stamp it out will end up hurting users in a misguided quest to help them."

For further comment or to arrange an interview please contact Matt Kilcoyne, via email (matt@adamsmith.org) or phone 07584778207.

Kind regards,

Matt

Tories should follow Celtic FC and score an open goal to win over English football fans

The Adam Smith Institute welcomes Celtic Park winning the Outstanding Achievement Award at the Stadium Business Awards and news that other clubs in England are looking to try the policy. We call on the Government at Westminster to repeal the ban on standing at football stadiums in England and Wales.

Ben Southwood, Head of Research at the Adam Smith Institute says:

"No surprises: Celtic’s safe standing section has won Celtic Park the Fan Experience Award from Stadium Business, in its very first year. It proves yet again that standing in football stadiums is the future—the Conservatives should seize on this to provide a liberal reform that makes a real difference to people’s lives.

We now know, from numerous reviews, that standing was not responsible for the disasters and tragedies of the 80s: that was bad policing, stadium design, and management. These problems have gone away: technology is incomparably more advanced and safer now. This is why standing operates across the continent, divisions outside the top two, and in other sports without incident.

Standing provides a much improved atmosphere—which is why 80-95% of fans surveyed in polls say they favour bringing it back time and time again. It may also allow clubs to reduce the price of the cheapest tickets: the gap between the priciest and most affordable ticket is far bigger at European clubs that have standing sections.

Many in politics already understand this, especially those MPs who are football fans: it would be a zero-cost reform that the government could do today to show fans across the country it cares about them."

The Adam Smith Institute has called for the ban on safe-standing in England and Wales to be lifted before - releasing a paper in 2016 supporting this position.

For further comment or to arrange an interview please drop matt@adamsmith.org a line or call 07584 778207.

Kind regards,
Matt

Queen's Speech - A missed opportunity?

The Adam Smith Institute (ASI) reacts to the Queen's Speech delivered earlier today.

Sam Bowman, Executive Director of the Adam Smith Institute says of the speech:

"The Queen’s speech was worryingly narrow. The Government has a slim working majority, so of course many of its more stupid manifesto commitments have been dropped. But it would be a grave political mistake to do nothing with this Parliament – voters will want something to show for this government’s time in office, and if it does nothing but Brexit and small niche Bills the voters will punish them at the next election.

Hopefully this speech won’t actually define the next two years. We need serious action on housing to bring down rents. We should seriously reform tax to boost productivity to deliver more high wage jobs. And we need to unlock private investment in infrastructure to renew parts of the country that have missed out on growth. The government ignores the problems that ordinary voters face at its peril."

For any further comment or to arrange an interview please contact Matt Kilcoyne via email matt@adamsmith.org or via phone 07584 778207

Medical monoliths can be smashed after Brexit

New report reveals opportunity for UK to be a leading medical innovator after Brexit

Britain can become a world innovator in healthcare technology following Brexit, according to a new report from the Adam Smith Institute released this morning (you can read the report in full here).

The report argues that Britain should streamline the approvals process for new medicines and health technologies, as well as allowing the use in Britain of medical products already approved by regulators in other countries with safe track records of medical regulation.

Brexit is an opportunity for Britain to overhaul and streamline its regulatory regime, giving it a unique chance to encourage more medical innovation, says the paper. Once dominated solely by multi-billion dollar companies, medical developments are increasingly coming from small start ups, which are often held back by slow and risk-averse regulators.

The UK’s Medicines & Healthcare products Regulatory Agency (MHRA) is in desperate need of reform as it struggles to adapt to new technological advances, warns the paper. Mark Lutter, the report’s author, suggests two strategies to boost the Britain’s regulatory regime. First, recognise decisions from the world’s best drug and medical device regulatory practices. Second, lower the cost of innovation here in Britain.

Under MHRA rules many new technological innovations, such as phone apps that magnify text for the short sighted, are currently counted as medical devices and subject to close oversight which deprives patients easy access to tools which would be able to improve their health or even save their lives.

As well as relaxing regulation at home, the UK should also look to use regulatory decisions made by partners in the EU and beyond. Drugs and medical devices approved by sensible regulators overseas would give Brits access to an increased number of safe and effective drugs, while at the same time cutting costs.

The world of medical innovation is rapidly changing and Brexit gives the UK the opportunity to become a leader in it. The UK can create a regulatory system that can attract the most innovative companies, says the report.

The MHRA should focus on becoming a partner to innovation, not a hindrance.Delaying lifesaving technology costs lives, the UK must seize this opportunity for regulatory reform for the health of its citizens.

Sam Bowman, Executive Director at the Adam Smith Institute, said:

“Britain has a chance to make itself a global hub for medical regulation after Brexit forces us to rethink the old ways of doing things. But we need to balance that innovation against the need for safety. This report’s solution to that need is ingenious: continue to require regulatory approval, but outsource some of that to the regulators of Japan, Germany, Canada and other safe, developed countries that also trial and approve medical products. Let’s hotwire the approvals process and unleash a new era of research and development in the field of making people live longer, happier lives. ”

Mark Lutter, author of the report and Lead Economist at NeWAY Capital, said

“The world is on the cusp of major innovations in personalized medicine, gene therapy, medical devices, and 3d printed organs. Unfortunately, regulatory agencies have slowed innovation. The MHRA, for example, classifies apps which magnify text for the visually impaired as medical devices. With Brexit, the time is right for regulatory change, to create the environment to cultivate the next generation of medical innovation.”

If you would like further information please do contact Matt Kilcoyne, Head of Communications, via email at matt@adamsmith.org | or via phone on 07584 778207.

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Make sure you read the report today!

Labour’s fare cap is a bung to train passengers

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

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

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

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

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

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

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

Undermining encryption will make us less safe and do nothing to stop ISIS

Following The Sun’s report that ministers are planning to force tech companies like Facebook and Apple to introduce backdoors for encrypted messaging services, Sam Dumitriu, Research Economist of the Adam Smith Institute, said:

"The encryption backdoor that intelligence services are proposing is exactly what led to the NHS WannaCry attack two weeks ago, and would put everyone who uses WhatsApp at risk.

"Criminals and terrorists will always have access to encryption whether or not it’s banned for apps that you and I use. If you outlaw encryption, only outlaws will have encryption, and that will make us all less safe.

"Terrorists like Salman Abedi will simply switch to lesser known, even more secure apps like Telegram, which protect journalists and activists from government survelliance and censorship in China and Iran.

"Hackers already dedicate substantial effort to seeking out and exploiting every vulnerability out there. Just two weeks ago we saw the harm and chaos they can cause when they shutdown IT systems at forty NHS trusts. The WannaCry exploit they used was based off a leaked NSA vulnerability in Windows. If WhatsApp, Facebook, and Google were forced to create vulnerabilities in their encryption, it'd risk giving cyber criminals a blank cheque to cause chaos and extort billions - and do nothing to stop terrorism."

For further comment or to arrange an interview please get in touch with samd@adamsmith.org or call 020 7222 4995

Unionising Deliveroo riders will hurt them and the wider economy

In response to the International Workers Union of Great Britain's attempt to force Deliveroo to accept it as a union for its riders, Sam Bowman, Executive Director of the Adam Smith Institute, said:

“Deliveroo riders do the job because it gives them so much flexibility, and ruling against that would hurt them. Just like Uber drivers and other ‘gig economy’ workers, being able to work when they want allows riders to work around other commitments – essential for students or people with irregular social lives. Deliveroo is hardly a monopolistic employer either – riders can choose between UberEats, Deliveroo or even similar services like Amazon Flex, choosing between whichever is offering the best deal at the time for them. That’s just one freedom that would be limited if riders had to be classified as ‘workers’.

“It’s misleading doublespeak to say that the court will be giving these riders more “rights”. Only 19% of Deliveroo’s riders in Camden supports the union's motion. The whole reason these jobs exist is because they are less tightly constrained by the type of job restrictions and barriers to entry that many full-time workers face. If you want to see what full-throttle “protections” for workers do, go to Italy or France, where unemployment rates are double Britain’s. 

“Our flexible labour market is what’s allowed us to create two million new private sector jobs since 2010, while the rest of Europe has stagnated. It allows firms like Deliveroo to innovate with new employment models and gives workers more choices and more opportunities. Ruling against the gig economy would be bad for Deliveroo riders, bad for innovation, and bad for Britain’s workers as a whole."

For further comment or to arrange an interview please get in touch via sam@adamsmith.org or 02072224995.

Theresa May is trying to turn us into Italy

In response to Theresa May's pledge of a raft of new European-style workers regulations, as well as a crackdown on the gig economy, the ASI's head of research damned them as risky.

Ben Southwood, Head of Research at the Adam Smith Institute, said:

Theresa May’s decision to copy Ed Miliband’s continental-style labour laws risks continental style unemployment and stagnation.

One of the British economy’s greatest strengths is its flexible labour market: it is easy to hire and fire workers, and when you do, the terms are simple and lightweight. It is this flexible labour market that has allowed us to get unemployment down to 4.7%, and employment up to a record high, despite a historically slow recovery around the world.

And it is this flexible labour market that has allowed “gig economy” employers like Uber, Deliveroo and Airbnb to flourish here, completely changing markets with new innovative products. Clamping down on this kind of work will make it harder for British firms to experiment with new business models in the future and act as a drag on innovation at a time when we need all the entrepreneurship we can get.

Look over the channel where countries ban new entrants like Uber, and cynically regulate away their business models, and you find 10, 20, 30% youth unemployment in rigid labour markets that cannot deal with shocks. We don’t want to emulate that here.

For further comment or to arrange an interview please get in touch via ben@adamsmith.org or 02072224995