Britain is Broken says President of the Adam Smith Institute

It is evident that many institutions and policies in the UK simply do not work says Dr Madsen Pirie

In a new discussion paper, Dr Madsen Pirie, the President of the Adam Smith Institute (ASI) outlines the 16 major institutions and policy areas which are not working, including:

1. The Bank of England 

2. The Treasury

3. Transport

4. The NHS

5. Education

6. Justice

7. Immigration 

8. Housing

9. Social Care

10.  Childcare

11. Welfare

12.  The Pension System

13.  Energy

14.  Regulation

15.  Civil Service

16.  Government

Within the paper, Dr Pirie draws parallels between the present day and the 1970s and outlines his concerns that the current direction of travel is jeopardising the future of young people in particular. 

-ENDS- 

Notes to editors:  

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207.

Dr Madsen Pirie is the President and Co-founder of the Adam Smith Institute. 

The paper will be live on the Adam Smith Institute website from 10pm 30th November and is available here. 

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.

The Adam Smith Institute Responds to the Chancellor's Autumn Statement

In response to the Chancellor’s Autumn Statement, Daniel Pryor, Head of Research at the Adam Smith Institute, said:

“Today's statement was a return to managed decline.

Entering a recession promising the highest tax burden in three-quarters of a century does not strike the right balance between fiscal credibility and growth. The Chancellor highlighted the harms of inflation, then added fuel to fire by threatening yet more tax threshold freezes—undermining productivity whilst hitting the pockets of people across the income spectrum.  

There were some positive steps on making support for vulnerable households more targeted, but little in the way of genuine pro-growth reform: the only sustainable way of tackling debt, improving public services and giving people the chance of a better future. 

In five years time, the average household will be poorer than they were before the pandemic. If we want to avoid that scenario, the Conservative Party must address the imagination deficit at the heart of British politics.”

In response to the Chancellor’s welfare announcements, Emily Fielder, Head of Communications at the Adam Smith Institute, said: 

“The Chancellor’s decision to move towards a more targeted energy support system is long overdue. The combined approach of targeted cash transfers and benefits uprating protects vulnerable households and moves away from unnecessary subsidies for those on higher incomes. However, the Government should also be means-testing its untargeted £300 payment to pensioners—an unnecessary giveaway to many affluent households in an otherwise stark statement.

The Chancellor also promised targeted energy support for businesses. As we have previously highlighted, this should take the form of extensive government-backed loans, rather than further tinkering with business rates or continuing energy price freezes.” 

Notes to editors: 

For further comments or to arrange an interview, contact our press line, Emily Fielder, emily@adamsmith.org | +44 7584 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.

Break Up the Home Office

Split the Home Office into two new, more focused Departments, says think-tank

• The Home Office has presided over numerous policy failures, and shows no signs of improving.

• The Department’s remit is too wide, and the political team at the top is not scaled to the size of the tasks confronting it. Inevitably the Home Secretary of the day over-promises and under-delivers.

• The Home Office should be split into two more manageable departments; Immigration and Security.

• Rishi Sunak’s Ten-Point Plan for Immigration concluded with “commissioning work to look at more fundamental Home Office and Border Force reform.” This would be a good place to start. 

A new report, A Broken Home: Why It’s Time to Split up the Home Office, from the Adam Smith Institute (ASI) outlines how the Home Office has been facing criticism from those on both the left and right of politics on its handling of a wide range of issues, including channel crossings and police failings. The principal problem is not that it is staffed by bad people. The Department’s remit is too wide and the political team at the top is not scaled to the size of the tasks for which it is responsible. The Ministry of Justice has a similar number of political staff, despite the much smaller Whitehall operation those working there need to oversee. The outcome is that the Home Office often makes no forward movement on major policy agendas at all. Secretaries of State make bold promises and then under-deliver, creating a gap between rhetoric and reality which both undermines public faith in Government and the Conservative’s reputation on law and order. 

Report author, Henry Hill, argues that the Home Office should be broken up into two separate departments- an Immigration Department and a Security Department. The former would be responsible for immigration policy and enforcement, asylum, passports and the Home Secretary’s existing broad powers to set immigration rules. The latter would be responsible for policing, counter-terrorism and the security services. 

The chief advantage of this reform would not be that it would automatically produce any particular change in policy. But it would mean that each Department would have a narrower and more coherent portfolio of responsibilities, and would be able to get on with huge policy challenges, including MET police reform, small boats and security. It would also improve accountability to Parliament, as Ministers would be able to have a much clearer oversight over the Department’s work. 

Henry Hill, Deputy editor at ConservativeHome and report author said:

“Today's Home Office is a relic from an era when government was smaller and departments fewer. It oversees too much, and encourages secretaries of state to try and micro-manage controversial issues. On immigration, policing and security we need better policy, faster delivery, and clearer accountability - and breaking up this leviathan is the way to do it.”

Daniel Pryor, Head of Research at the Adam Smith Institute said:

“For far too long, the Home Office has failed to make substantial progress on vital policy areas which have real quality-of-life implications. Instead it has continued to over-promise and under-deliver, undermining faith in our institutions. It is high time that this sprawling empire is broken up. The new Prime Minister now has the opportunity to deliver real reform and create a more efficient government.” 

-ENDS- 

Notes to editors:  

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207.

Henry Hill is the Deputy Editor of ConservativeHome. He also writes widely for other outlets and was the co-author, with Andrew Yong, of the ASI’s previous paper ‘Global Britons: A Fairer Path to British Citizenship.’

The report will be live on the Adam Smith Institute website from 10pm Thursday 27th October and is available here. 

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.

The Mini-Budget Reversal

In response to Chancellor Jeremy Hunt’s statement on the Mini-Budget,  Emily Fielder, Head of Communications at the Adam Smith Institute, said:

“The Chancellor has said that there will be difficult decisions on tax and spend in the coming years as we move towards a more secure financial footing. But there is plenty this Government can do which doesn’t involve changing tax thresholds or spending pledges ––moving forward with supply-side regulatory reforms would boost economic growth and activity at a time when it is desperately needed.

The decision to properly target the energy price guarantee from April is welcome. Whilst it is right that the Government continues to support the most vulnerable households and businesses over a period of high energy prices, it should never have subsidised the energy use of affluent households at such a vast cost to taxpayers.” 

Notes to editors: 

For further comments or to arrange an interview, contact our press line, Emily Fielder, emily@adamsmith.org | +44 7584 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.

The ASI Responds to Liz Truss’ Party Conference Speech

Commenting on Prime Minister Liz Truss’ final speech at Conservative Party Conference 2022, Daniel Pryor, Head of Research at the Adam Smith Institute, said:

“After a week of difficulties, the Prime Minister has used her speech to reset, reaffirm, and reassure the Party.

Growth, freedom, and a renewed belief in British enterprise is a welcome shift away from years of higher taxes and economic stagnation. Rather than detract from her message, hecklers helped embody the ‘anti-growth coalition’ the Prime Minister referred to. But while these mantras signal an important change in our economic approach, it remains to be seen if she can ‘deliver, deliver, deliver’ on her promise. 

Beyond the rhetoric, it’s vital that she follows through quickly with policies that focus on making work pay, supercharge investment and see through planning reform to make infrastructure and housebuilding possible, whilst giving direct support to those who need it most.”

Notes to editors: 

For further comments or to arrange an interview, contact our press line, Emily Fielder, emily@adamsmith.org | +44 7584 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.

RE-DRAFT ONLINE SAFETY BILL TO REMOVE THREAT TO ENCRYPTION

The Online Safety Bill would undermine encryption, posing a grave threat to privacy, security and the wider UK economy, says think-tank

• End-to-end encryption (hereafter encryption) is foundational to the proper functioning of our online experience;

• In its current form, the Online Safety Bill would undermine encryption by empowering Ofcom to demand service providers use ‘accredited technology’ to give them access to encrypted content in certain circumstances, under threat of large fines;

• This would pose a grave threat to privacy, security and the wider UK economy. 

A new report by the Adam Smith Institute (ASI), Shut the Backdoor: Protecting Encryption from the Online Safety Bill, outlines the ways in which the Online Safety Bill undermines end-to-end encryption. The Bill will empower Ofcom to demand service providers use ‘accredited technology’ to give them access to encrypted content in certain circumstances.

One such technology under consideration is Client Side Scanning (CSS), which works in a similar way to anti-virus software and runs in the background, often completely unbeknownst to the user. Its implementation will be entirely at the discretion of the Secretary of State, meaning that the only barrier between scanning illegal content and scanning for ‘legal but harmful content’ is a political one. 

As report author, John Macdonald, explains, this poses a grave threat to privacy and security. There is no sense in which encryption could be maintained while another party not included in message exchanges has access to the contents, whilst creating a ‘backdoor’ for law enforcement would effectively be creating a blackmailer’s charter, allowing criminals and hostile foreign actors to exploit security flaws. These threats would seriously undermine civil liberties in the UK and provide tacit justification for oppressive regimes, such as Russia and China, to violate civil rights. 

Furthermore, such measures would hinder the growth and competitiveness of the UK’s vital technology sector, potentially resulting in large companies withdrawing from the UK market entirely. 

The paper recommends that the Government should re-draft the Online Safety Bill to ensure encryption is properly protected through removing the most damaging elements. 

John Macdonald , report author and Director of Strategy at the Adam Smith Institute, said:

“Make no mistake, the Online Safety Bill in its current form is an unprecedented threat to civil liberties and the proper functioning of the internet. This would be another Snooper’s Charter, which would not only undermine encryption and facilitate the bulk collection of personal information, it would also compromise national security and make the UK hostile towards tech innovation. 

It needs reconsideration with the utmost urgency”

-ENDS- 

Notes to editors:  

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207.

John Macdonald is Director of Strategy at the Adam Smith Institute.

The Adam Smith Institute will be hosting an event at Conservative Party Conference entitled Shutting the Backdoor: Redrafting the Online Safety Bill, which will explore the threats the Bill poses to free speech and encryption. Details of the event can be found here. 

The report is live on the Adam Smith Institute website and is available here. 

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.

The ASI responds to Sir Keir Starmer's speech to the Labour Party Conference

In response to Keir Starmer’s Conference speech, Emily Fielder, Head of Communications at the Adam Smith Institute, said:

Where Sir Keir diagnoses the problems correctly, his solutions miss the mark. He is right that inflating demand without increasing supply will raise house prices, and that we need to get ‘shovels in the ground,’ but unfortunately his only supply side suggestion is weak, and he’d rather stoke more demand and target the red-herring of second homeowners. 

Similarly, while he pushes for nuclear, hydropower, and innovative solutions, he plans to back it through taxpayer subsidies and a new state-owned energy company. Previous attempts at state-owned energy resulted in massive subsidies and taxpayer-funded bailouts. There is no indication that Great British Energy will fare any differently. 

However, he does at least recognise some limits of Labour’s expensive, taxpayer funded policies, saying himself that they won’t be able to deliver ‘good Labour policies’ until the public finances allow. Labour’s magic money tree may have finally disappeared. 

ENDS

Notes to editors:  

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207.

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.

The Adam Smith Institute responds to the Chancellor's 'mini-budget'

The Adam Smith Institute was encouraged by the pro-growth policies in Chancellor Kwasi Kwarteng’s ‘mini-budget’.

In response to the cancellation of the corporation tax hike and changes to business taxation, Daniel Pryor, Head of Research at the Adam Smith Institute, said:

“The Government is rightly prioritising growth after years of stagnation, and today’s measures are a welcome first step to getting the British economy back on track. The planned corporation tax rise would have hammered businesses, choked off investment and reduced workers' wages—scrapping it was a sensible move. 

It’s also encouraging to see that the Chancellor understands the importance of generous capital allowances, as well as headline rates. Making the £1 million Annual Investment Allowance permanent means businesses across the country have greater capacity and certainty to boost the economy at a time we need it most.”

In response to changes to personal taxation and National Insurance Contributions, John Macdonald, Director of Strategy at the Adam Smith Institute said:

“The Chancellor said it loud and clear—this Government is serious about letting people keep more of their own money. Cancelling the NICs hike is a welcome return to principle —it might not be the most well targeted measure, but a Conservative Government should never have raised taxes in the face of a cost of living crisis in the first place. 

Abolishing the higher rate of income tax is much the same—it should never have existed in the first place, and it shows the Chancellor is committed to returning the Conservatives to a party of low tax and individual freedom.” 

In response to investment zones, Morgan Schondelmeier, Director of Operations at the Adam Smith Institute, said:

“The measures outlined for proposed investment zones show that this Government knows what will really drive growth and prosperity. Liberalising restrictive planning rules, generous tax allowances for investment, scrapping destructive taxes like stamp duty and drastically raising National Insurance thresholds will all turbocharge growth. 

While there are risks associated with the government picking winners––situating the investment zones in politically convenient places––the ‘regulatory sandbox’ nature of investment zones will enable the Government to test and implement what works on the national level.

Ultimately, these reforms would help the entire UK, but fast tracking their implementation is a great first step towards reversing a doldrum economic cycle.”

Notes to editors:  

For further comments or to arrange an interview, contact John Macdonald, john@adamsmith.org | 0758 477 8207.

The ASI recently released the following papers which may be of further interest:

• Seeing It Through: A Plan for ‘Full Fat’ Freeports, which argues that—done right—freeports offer an exciting opportunity to create growth by addressing inefficiencies within the British economy.

• In the Bleak Midwinter: How (and How Not) to Tackle the Energy Crisis, which sets out the most effective policies to tackle the energy crisis and alleviate pressure on poorer households

• A Recipe for Growth: The Economic Effects of Corporate Tax Reform in the UK, which argues that reversing the corporation tax hike and replacing the super-deduction would have significant positive impacts on growth and wages

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.

Introduce Full-Fat Freeports to Boost Economic Growth

Create light-touch planning regimes, provide local investment and implement tax and regulatory reforms designed for growth in geographically defined areas, says think-tank

• Some academic economists are skeptical of the ability of freeports to add value to the British economy, arguing that they primarily divert (rather than create) economic activity;

• This does not need to be risked. Freeports offer an exciting opportunity to create growth by addressing inefficiencies within the British economy; 

• Freeports do not have to be literal ‘ports’- it is perfectly feasible to place freeports within the country in areas with sufficiently good transport links;

• This paper sets out four ways this can be achieved:

1. Create a light-touch planning regime, providing fast and certain planning for high value economic activities within the freeport;

2. Provide significant packages of local investment to alleviate concerns about crowing of public services and infrastructure, with short run disruption smoothed by offering payments linked to the freeport’s success;

3. Implement a tax regime designed for growth, including full expensing for capital investment, the simplification of customs processes, and the elimination of property taxes;

4. Establish a regulatory sandpit, allowing the Government to trial regulatory changes across a sample of freeports, testing policy alternatives against one another and getting real world feedback on their performance;

A new report from the Adam Smith Institute (ASI), Seeing it Through: A Plan for Full-Fat Freeports, argues that freeports offer an exciting opportunity to create growth by addressing inefficiencies within the British economy.

Some academic economists are skeptical of the ability of freeports to add value to the British economy, arguing that they primarily divert (rather than create) economic activity. It is true that the UK is already focused on lowering barriers to trade, has policy levers for significantly reducing the distortions created by tariffs which mean that the pure benefits in customs terms to locating businesses in new UK freeports are likely to be slim. However, freeports could still play a role in generating genuine growth by targeting the UK’s own domestic policy inefficiencies. 

Report author, Sam Ashworth Hayes, identifies four policy areas where a noticeable difference could be made:

1. Create a light-touch planning regime within the freeport to remove a major barrier of growth. This would both benefit areas which are already successful, such as Oxford, Cambridge and London, and left-behind areas.

2. Provide significant packages of local investment to alleviate concerns about crowing of public services and infrastructure, with short run disruption smoothed by offering payments linked to the freeport’s success. 

3. Implement a tax regime within the freeport which is laser-focused on growth, in order to justify the cost to the exchequer. This should include introducing full expensinging for capital investment, simplifying customs processes and eliminating property taxes.

4. Establish a regulatory sandbox, under which the Government can alter regulation within geographically defined locations. The key benefit to this policy is not the creation of a loophole in regulation for small clusters of firms scattered across the country, but the generation of evidence on the success or failure of these policies that is then used to inform decision-making for the country as a whole. 

Sam Ashworth-Hayes, report author and economist, said:

“Freeports offer Britain a chance to boost growth by addressing inefficiencies in our economy, punching through red tape and government restrictions. Tariffs on trade are low and the government’s ambition is to get them lower still; some academic economists think this makes freeports less useful than they are elsewhere in the world. But this just means they need to target different problems facing our own economy. 

By liberalising planning, providing a focus point for local investment, and a tax regime engineered at driving investment, freeports can drive growth in their local areas. And for the country as a whole, freeports offer the government a sort of regulatory sandbox for testing policies, giving it a chance to see how they work on the ground.”

Daniel Pryor, Head of Research at the Adam Smith Institute said: 

“If we unleash the full potential of freeports, the entire British economy stands to benefit. The Government should grasp the opportunity to go beyond low tariffs and use freeports as a proof-of-concept for pro-growth planning reform, a tax system that encourages investment and a sensible regulatory regime. Done properly, freeports won’t just make local residents richer—they’ll boost living standards across the country.”

-ENDS- 

Notes to editors:  

For further comments or to arrange an interview, contact John Macdonald, john@adamsmith.org | 0758 477 8207.

Sam Ashworth-Hayes is an economist and writer. He has previously co-founded a start-up using machine learning to measure biodiversity, and worked as a senior economist at a consultancy. He holds an MPhil in Economics from the University of Oxford, and a BSc. from York in the same.

The report is live on the Adam Smith Institute website and is available here. 

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.

The Adam Smith Institute responds to review of anti-obesity strategy

In response to reports that the Prime Minister could scrap the anti-obesity strategy, Daniel Pryor, Head of Research at the Adam Smith Institute, said:

“The Government’s anti-obesity crusade was always light on evidence but it weighs heavily on the wallets of hard-pressed consumers. It’s encouraging that the new Government could reverse the trend of politicians meddling with our weekly shop.

Ordinary people have seen prices go up and choice go down whilst businesses have been burdened by yet more red tape. Multiple impact assessments—often based on questionable science—have failed to demonstrate significant impacts on public health. This has left a bitter taste in the mouth of Brits struggling with the cost of living crisis.”

Notes to editors:

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207

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.