Business rate cuts won't help the high street

Responding to new recommendations on cutting business rates from the Retail Sector Council, Daniel Pryor, Head of Programmes at the Adam Smith Institute, said:

“There are no economists on the Retail Sector Council committee—and it shows. Business rate cuts are a sop to landlords and do nothing to adapt to the fact that fewer of us are working, living or traveling to the high street. Landlords have reacted to previous rate cuts by increasing rents and within a few years any savings for businesses evaporated. 

“Funding this misguided policy through corporation tax hikes will subsidise landlords while punishing companies that have been the backbone of the British jobs miracle. Hiking taxes now would hurt jobs, growth and investment across the country: all for very little benefit.”

E-Scooters are a wheely good policy

A new paper from the neoliberal think tank the Adam Smith Institute comes hot on the tail of the UK Government’s announcement to consult on legalising e-scooters and argues that a liberal approach would provide low-cost, environmentally friendly last-mile transport for Britain’s towns and cities. 

• One-third of e-scooter rides replace car rides, the ASI has calculated, helping reduce CO2 emissions, NOx pollutants and busting congestion;

• The UK Government must amend the outdated Highways Act 1835 and the Road Traffic Act 1988 to legalise e-scooters; 

• In just over two years e-scooters have become available in over 350 cities worldwide and are available in over twenty European countries;

• Two-thirds of car trips in cities are under three miles and replaceable by e-scooter;

• E-scooters are safe, presenting a comparable risk to bicycles. They will become safer over time due to increased familiarity of passengers and other road users;

• E-scooters address economic immobility by serving areas lacking in traditional transport options;

• The Government should take a devolved approach to legalisation, empowering cities to decide the specifics within a broadly liberal framework.

The UK Government’s move to consider legalising e-scooters brings into sharp focus the need to ensure that regulation is well thought-through and evidence based. 

Instead of succumbing to moral panics on safety that have plagued launches of every new travel technology from the bicycle to cars, the Government should look at how e-scooter legalisation will help meet environmental targets, reduce costs of congestion to the economy, and give more people choice over how they get around our major cities.

New research by the Adam Smith Institute has shown that, where legal already, one third of all e-scooter journeys have replaced car rides — reducing CO2 and congestion in major cities. If legalised they could help the UK meet the country’s climate change and air pollution targets. 

Cars are the most popular transport method in the United Kingdom, with over two-thirds (70%) of trips to work undertaken by car. A majority (58%) of car journeys in the UK are for a short distance, with 7% of car journeys below one mile, 18% between one and two miles, and 33% between two and five miles. The free market think tank argues that there are therefore millions of journeys that green modes of short transport that could be made by e-scooters or bikes that are currently made by car.

While rentable bikes have been slow to take off, e-scooters have been a hit with passengers. In the United States it took seven years to go from the launch of docked bikes to having over 30 million rides per annum, e-scooters surpassed that in their first full year of launching with over 38.5 million rides in 2018. 

The think tank argues that we must avoid the moral panics over scooter safety, noting that every transport innovation, from bikes to cars and even trains suffered from hysteria over their introduction before widespread acceptance. The report also notes that the injury rates for e-scooter use so far are comparable to bicycles and that legalisation could increase safety with clear rules. 

There is also a well observed safety in number effect: where higher numbers of road users have been shown to bring down the number of accidents. Doubling the number of people walking or bicycling increases the number of people struck by just one third — with cars the number of crashes grows in equal proportion to the number of extra journeys. The same logic should apply to e-scooters where, as they become a regular sight for motorists, we should expect to see an increase in the responsiveness of other road users and substantially reduce the likelihood of crashes.

The Adam Smith Institute warns that the UK is falling behind in the development of this new technology, with producers in other countries having a significant first-mover advantage due to the UK’s Government's slow take-up of the technology. 

The report sets out six clear and simple rules for e-scooter use under legalisation: 

1. Only ride on bicycle paths and on the left-hand side of the road;

2. Riders must be 16 or over;

3. One rider at a time;

4. Do not ride on the sidewalks unless specified;

5. A speed limit of 15-20mph; and

6. Do not ride while intoxicated or affected by drugs;

In addition, the think tank says the parking rules should minimise disruption, suggesting four rules with consequences for licence retention should they not be met by companies providing scooters:

1. Do not block sidewalks, allow at least two metres of free passage. 

2. Park only near the curb or adjacent to a building. 

3. Do not block bus stops, entrances to houses and buildings, on public gardens or parks, in the middle of bicycle paths, or on car parking areas. 

4. Do not block access for people with disabilities.

Matthew Lesh, Head of Research at the Adam Smith Institute and author of the paper, says: 

“E-scooters are reducing emissions and busting congestion in more than 350 cities worldwide. The multi-billion pound e-scooter industry has safely provided hundreds of millions of rides - including for communities and routes underserved by traditional public transport. 

“In the United Kingdom, outdated laws from as far as 1835 are preventing e-scooters from being used on public roads, bike paths and pavements. The UK should immediately legalise e-scooters and begin sharing scheme trials, with the locally appropriate regulatory regime."

Mayoral Candidate Shaun Bailey said:

“London urgently needs a solution to the clean air crisis and e-scooters should be part of that solution. As the ASI report outlines, e-scooters get people out of cars; ease congestion and reduce carbon emissions which all help to improve our air quality. “As Mayor, I will show the leadership London has lacked for four years, by embracing innovative technology, such as e-scooters, if it can help make our city a cleaner, prosperous and safer city.”

Notes to editors:  

For further comments or to arrange an interview, contact Matt Kilcoyne, matt@adamsmith.org | 07904 099599.

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

ASI welcomes fightback against mercantilism

Following the Prime Minister’s speech today, the Adam Smith Institute welcomed calls to tear down trade barriers post-Brexit.

The ASI’s Deputy Director Matthew Kilcoyne said:

"Boris is absolutely right to emphasise the role of free trade in raising more people out of poverty than any other idea in human history.

"Britain should now become the global champion of free trade in an increasingly mercantilist world. The Government is right to commit to reducing tariff and non-tariff barriers to trade with or without deals. We should go further by making it possible for Brits to live and work in the USA, Canada, Australia and New Zealand - for free people are part of the great exchange."

For further comment, or to arrange an interview, please contact the Adam Smith Institute press team on mobile (07904099599), landline (02072224995), or email matt@adamsmith.org.

ASI comments on Migration Advisory Committee thresholds report

The Adam Smith Institute welcomed the recommendations of the Migration Advisory Committee for a more welcoming visa system after Brexit.

The ASI’s Head of Research Matthew Lesh said:

“Today’s Migration Advisory Committee recommendation to lower the income threshold is an important first step – but we should remember that income is an arbitrary measure to restrict migration. Now that the numbers target has been dropped, the government should stick to their commitment to scrap the salary threshold as well.

“The MAC report’s recommendations to make it easier to migrate for those with a job offer, and provide more pathways for the exceptionally talented without an offer, are also important steps. But we should be moving towards an even more welcoming system, lowering fees and thresholds to enable more people who could contribute to the UK.

“Recent rises in public support for migration underline that Brexit was never to bring up the drawbridge on immigrants – but to ensure immigration matches the needs of the economy and aspirations of society while being under control. A clear and coherent policy can rebuild trust in the migration system while keeping it responsive to the needs of the economy.” 

Red tape strangling our high streets

A new paper from the neoliberal think tank the Adam Smith Institute argues that the problem with the High Street has been totally misunderstood. The ASI says that to reinvigorate our town centres we need to reform restrictive planning rules and reject a policy of managed decline:  

• National  Planning Policy  Framework’s ‘primary  shopping areas’ (PSAs)  designation in town centres  concentrates retail and leisure  uses in one small zone, creating inactive dead zones outside the PSA and separating retail from the residential areas where their users live

• Primary shopping areas are often dominated by one or two large single-owner shopping  centres, limiting the rental market. This allows property owners to charge higher  rents to small businesses, hurting the high street. 

• Local  planning  policies are  based on retail  capacity assessments  that can be-come out of date before the plans are even adopted. 

• Mixed use development, combining retail, office, leisure and residential uses, creates  more viable, safe and liveable spaces with night-time activity and the ability to adapt to changing economic and social circumstances.

• This paper looks at two concerning case studies of overregulation of the town centre, Stafford & Stone and Milton Keynes, and looks also at Aylesbury where less restrictive local planning rules show the benefits of more widespread retail.

With online shopping on the rise, and more people wanting to live in our cities, the high street needs to be made fit for purpose in the next decade. The free market think tank the Adam Smith Institute says that we should expect fewer big chains dominating the high street. Instead we should expect to see supermarkets and pharmacies next to yoga and dancing studios beneath residential apartments and the odd hipster cafe serving smashed avocado on toast.

Instead of a single street designed for chain shops concentrating retail and leisure uses  in one small area, creating dangerous inactive dead zones in our towns and cities, and separating retail from the residential areas where its users live — towns, cities and national planning guidelines should expand the areas that shops and cafes can set up to encourage mixed use. 

The paper identifies four ways that national planning guidelines have led to dead high streets across the country: 

1. They’ve encouraged monopolistic ownership by national landlords jacking up rents;

2. Mixed residential, commercial and office space has been limited;

3. Designated  primary shopping  areas are already  heavily developed and  sometimes overlap with conservation  areas or contain a large number of  listed buildings which has restricted growth;

4. Towns and cities are often inactive outside their centres, leading to unattractive  and unsafe streets, especially at night.  

Far from boosting growth, local plans have in many ways hindered our high streets, the report argues. The bureaucratic nature of local authorities and the policy making process means that local plans are often out of date, superseded by new developments, other policy documents and market changes, before new ones are adopted. 

Plans are based on evidence gathered around a year or two before its publication, and local authorities are in constant political flux with a third of the council being reelected on three out of every four years. A ten-year plan is liable to be at odds with the policy direction of a new administration within a year or two of its adoption, or sometimes even before its adoption.

A lack of central planning can actually be a good thing when it comes to local planning. The Vale of Aylesbury Local Plan 2013-2033 was rejected by the Government in 2014, and remains unadopted to this day. It may seem counterintuitive when nearly one in ten shops stand empty across the UK, but making it easier to set up shop throughout Aylesbury has meant the local town now expects to double the amount of retail space by 2033. The town is allowing new shops to set up where they will be able to entice people in, where punters want to be, and where rents will be competitive.

The Adam Smith Institute recommends seven ways that the government could bring life back to our high streets across the country by learning from this example. 

1. Remove the requirement to set strict areas of shopping activity;

2. Encourage mixed-use developments and a diverse range of uses within and around town centres;

3. Shorter term plans to complement or replace long-term plans;

4. The examination process for local plans should be simplified or abolished;

5. Neighbourhood Planning within urban areas should be encouraged further to take advantage of local knowledge and expertise and produce plans better focused on local needs and priorities.

6. Permitted development rights should be expanded to allow conversion of residential or office buildings to retail use and vice versa.

For Britain’s high streets and town centres to remain active and viable, a looser approach to planning is needed which is better able to respond quickly to changes in technology, habits, and markets. For the retail industry to survive and compete effectively against growing online competition, retailers need to be free to adapt to their customers’ needs in terms of floorspace and location.

A move away from zoning is required to allow local authorities and town centre economies to grow, adapt and survive. We need to remove the red tape strangling Britain’s high streets. 

Thomas Walker, author of the report, said:

“Everybody knows Britain's high streets are struggling. In order for that to change we need a new approach to planning policy that gives our town centres the flexibility to react and adapt to rapidly changing economic conditions and consumer needs. We need to move away from the old idea of dedicated retail zones and embrace a more dynamic, mixed-use approach to make our town centres prosperous and create a safe and active environment for residents, workers and visitors.”

Matthew Lesh, Head of Research at the Adam Smith Institute, says: 

“High streets across Britain have too often become soulless and empty, and we risk creating a country of ghost-towns. Our one-size-fits-all national planning rules don’t fit anyone or anywhere. We need to encourage the dynamic use of high streets and mixed-use retail, residential and commercial across towns if the government is to revitalise forgotten communities.”

Rob Butler MP, the newly elected Member of Parliament for Aylesbury, says:

“This report is an excellent exploration of the challenges our towns are facing, and how reconsidering restrictive zoning can potentially help reinvigorate them, to ensure our town centres thrive in the new decade.”

Notes to editors:  

For further comments or to arrange an interview, contact Matt Kilcoyne, Head of Communications, matt@adamsmith.org | 07904 099599.

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.

Flybe should not get special treatment, no one company should

Matthew Lesh, Head of Research at the Adam Smith Institute, warns that the government should not be picking winners in industry when it comes to bailouts or tax cuts.

“The collapse of Flybe would be a tragic event for its staff and travellers. But the Government is right to remember that no business is too big to fail. It must avoid the temptation to bailout a failing, carbon-intensive business. If customers are unwilling to pay the true cost of a business it should not continue to exist — we must be willing to allow the economy to adapt to new circumstances and demands. We should not ask taxpayers to subsidise the travel of politicians and businessmen.

“A broad lowering of air passenger duty would be a better approach than a direct cash injection into a single business. But even this appears to be inconsistent with broader government goals to reduce carbon emissions. Short haul flights, particularly where the same journey could be taken by train, are a disproportionate contributor to carbon emissions and the government will be hard-pressed to explain why this will be encouraged in future budgets at the expense of future generations. “

For further comment, or to arrange an interview, please contact the Adam Smith Institute press team on mobile 07904099599, landline 02072224995, or email matt@adamsmith.org.

High Pay Stats unoriginal, uninteresting and unhelpful

With the news that the CIPD and the High Pay Centre have released their cod stat report on executive pay saying the exact same thing that it always does the Adam Smith Institute's Head of Research, Matthew Lesh, has issued the following statement calling out the politics of envy and economic illiteracy. 

“Once again the so-called High Pay Centre are revealing their hatred of high pay. These nonsense statistics are unoriginal, uninteresting and an unhelpful contribution to public debate.  

“This is just more of the now discredited Corbyn-style politics of envy. We should be talking about how to help the worst off in society — how to cut red tape, increase the threshold for payment of national insurance, and cutting the Factory Tax that is holding back workers’ wages and unbalancing the economy.

“In a global market for CEOs, British firms must be able to compete for top talent. These people provide immense value to our society. Decisions made by Britain’s makers and doers now have global impacts and their value to firms reflects this. Limits on executive pay would drive top British talent and companies offshore, ultimately leading to fewer jobs and lower pay for workers."

For further comment or to arrange an interview please contact Matt Kilcoyne on 07904099599, via landline 02072224995 or email matt@adamsmith.org

No-one needs this intervention by Boris

The Adam Smith Institute is very disappointed by the Conservative Party’s proposed changes to state aid rules that take the United Kingdom in an interventionist direction. Matthew Lesh, Head of Research at the Adam Smith Institute, says:

“We shouldn’t free ourselves from the European Union in order to just enslave ourselves to the whims of Whitehall. The British people are sick of massive corporations, who have close connections with the government, getting huge handouts at the taxpayer’s expense.

“Weakening bailout rules is hugely disturbing. A Conservative government should not be promising to use taxpayer money to subsidise failing industries. Making a profit is a proof of the value added to society, and there must be no business that is too big to fail. Boris should support individuals to build skills and safeguard their futures, not entrap them in old industries.

“Promoting the “local economy” in procurement and having a “buy British” rule for state bodies is a form of Trumpian protectionism. The local economy does best when government wastes the least. If it’s better to procure goods or services overseas then that means more to spend on frontline services at home.

“Britain must not go backward, but onward into a competitive global future.”

For further comment, or to arrange an interview, please contact Matt Kilcoyne via email matt@adamsmith.org, mobile 07904099599, or landline 02072224995.

London Uber ban is a total disgrace

The Adam Smith Institute has today slammed TfL’s announcement that it is stripping Uber of its license to operate in London.

The ASI’s Head of Research Matthew Lesh said:

“Labour Mayor Sadiq Khan’s decision to strip Uber of their operating licence on spurious grounds is a total disgrace. He has sided with the vested interest of Black Cabs — who want less competition — over the interests of all Londoners. 

Uber provides thousands of jobs for low income and immigrant Londoners. It provides a much-loved service to get people home safely at night. It is more affordable than other cabs and provides a flexible working life for drivers. 

Today’s decision is a reminder of the risks of the anti-competition and anti-innovation mentality of Jeremy Corbyn’s Labour Party.”

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).

Conservative Party Manifesto: A robust manifesto but more work to be done to boost the economy

The Adam Smith Institute has today responded to the Conservative Party Manifesto announcement.

The manifesto is robust, but there is more work to be done to boost our economy, the ASI’s Head of Research Matthew Lesh says:

The Conservatives should be congratulated for a robust manifesto that lowers national insurance, seeks to revise business rates, and commits to not increasing income tax.

Creating ten free ports will help boost some of Britain’s left behind areas with lower taxes and less cumbersome red tape — an approach that should ultimately be taken nationwide. Free trade deals will help boost Britain's economy and deliver lower priced, high quality products for consumers. It is also welcome to see a commitment to ensure regulation is “sensible and proportionate” and “using our new freedom after Brexit to ensure that British rules work for British companies”. Abolishing Section 40 of the Crime and Courts Act 2014, which requires media outlets to pay costs even when they lose cases, is a welcome move for free speech. The introduction of safe standing will ensure football fans have more choice while keeping patrons safe.

But overall, this will not be enough to turbocharge Britain’s economy, or address the ballooning size of the state and long-run issues. Splashing out taxpayer money — albeit at a much more sensible scale than Labour — will do little to solve structural issues and raises questions about fiscal responsibility. The NHS needs more than higher spending, but fundamental structural reform and the embrace of a European-style insurance model for those who can pay. To improve the standard of our schools we need more parental choice, not simply more funding. 

The recommitment to the so-called “Green Belt” and Help to Buy will do little more than throw fuel on the fire of the housing market. Cancelling the planned corporate tax reduction will discourage investment and job creation and will make it harder to unleash Britain's potential. The substantial increase in the minimum wage will mean fewer jobs and less hours, particularly for those will fewer skills, the young and minorities. While embracing nuclear, hydrogen and fusion has the potential to provide substantial low-cost, low-emission energy, the moratorium on fracking will hamper efforts to fight climate change with transitional energy sources.

Support for skills throughout people’s lives is much-needed in this era of rapid technological change - this should be spent on experimenting with different models of retraining, relocation and cash payments to find out what works for different individuals and communities. The Conservatives should also be looking to reform taxes to encourage investment and cut red tape that is strangling business. 

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).