Tackle Tax and let the UK Prosper

Tackle Tax and let the UK Prosper

In the 2019 General Election, Jeremy Corbyn’s taxation policy was radical. He wanted to raise an extra £82.9bn by increasing Income Tax for those earning above £80,000 to 45% and 50% for those with incomes above £125,000. Corporation Tax was set to rise from 19% to 26%, and the introduction of a second homes tax was planned at some 200% of the Council Tax bill. The list goes on.

Keir Starmer is likely to be more reserved, especially as his popularity is on the up. In his leadership campaign the new Labour Leader was deliberately ambiguous about his ideological position and took care to distance himself from the radical Left, whilst simultaneously doing the same from the Blair years and the right of the Party.

Starmer has shown that he is ostensibly a left of centre Liberal, and we can speculate that his fiscal policy will certainly be less radical than that of his predecessor.

The general view on taxation amongst centrist Liberals is that a percentile or two extra on tax rates will provide more funds for our public service, whilst having little effect on commerce and the economy. But does this idea really hold true?

The Government and a vast majority within the Tory right would disagree.

Indeed, the alternative view would be that If you want to provide longevity to the prosperity of an economy a tax increase is not the solution, no matter how miniscule the percentage rise might be.

Taxation, no matter how small, will have a contractionary effect on the economy. The level of that contraction will not always be directly proportional to the percentage of the change. But the fact remains that the economy will still be constricted either way.

Tax Increases may provide short term revenue to the Government. But in the long term it will only decrease the amount of tax procured to the State.

Across the Pond in the United States, The National Bureau of Economic Research state how “an exogenous tax increase of 1pc of GDP lowers real GDP roughly 2 to 3 percent.” This is a fitting illustration of the effect of Taxation on an economy. More tax leads to a lower GDP, leading to less tax receipts, less Government revenue and therefore it leads to less money being available to spend on vital services for our communities.

An increase in tax today will lead to a loss of future tax receipts and Government revenue. We have been here before and the figures speak for themselves:

In 2010, Alastair Darling raised the top rate of tax to 50% of income after it was predicted that such a move would raise £3bn. In the short run it only raised £1bn towards address the debt accumulated due to the 2008 Bank Bailouts. In George Osbourne’s 2012 budget the top rate of Tax was lowered to 45% and a later HMRC report indicated the cut raised an additional £8bn.

The figures speak for themselves. Tax increases will provide short-term revenue, but that revenue will ultimately fall as the economy continues to be constricted.

With indications that the Chancellor is considering Tax rises as a step to offset the Lockdown debt, the Government may not be giving adequate consideration to the real financial issues the Country faces. An increase in tax today will not help our prosperity in the long run.

Government must avoid seeking yet another quick fix. They must take the difficult decisions that will be beneficial in the long run.

It should be a no-brainer. Let’s reduce Tax and let Great Britain prosper.

Reopening Businesses Need Their Support Industries Reopened Too

The business events, delegate accommodation and meetings sector is worth £31.2 billion to the UK economy and employs over 700,000 people.

In the latest series of the Government’s opening-up announcements, the sector has been completely overlooked, with the term “conference centres” used to categorise a range of different businesses as being the same for the purposes of keeping them all closed beyond the 4th of July.

Could anyone really define what a conference is when asked?

It’s a broad term that gives little value to a UK-wide industry offering support services to business that range from accommodating training sessions for 10 people to 5000-delegate international conventions.

So many parts of the hospitality industry like pubs, restaurants and hotels have been given the green light to open. Yet meeting and training venues cannot be used to deliver a key service to the many businesses that need all the help they can get.

Right now there is demand to accommodate statutory legal training, exams, development courses, key team meetings, board meetings, strategy days, recruitment days and interviews. That’s before considering the requirement that businesses of all sizes have for buying in extra space day-to-day.

People at work want to interact face-to-face. Businesses have functioned for months with the various forms of online platforms for meeting that we have all had to adapt to. There will be a continued place for the “who’s zooming who” approach as many businesses rationalise and change post-Lockdown. But we know for sure there’s nothing quite as productive as a live, in the flesh performance being involved!

The impact of the Lockdown will lead to a greater need for meeting venues, when teams that have moved from the office space to working permanently from home need the face to face to interaction. For the trying times ahead, allowing us to play our part right now really could create a win-win in the longer term.

How is it any different to sit in a socially distanced meeting room for an exam, training or team meeting than to go to a restaurant or a wedding reception for 30 people?

People are more likely to get close at a large social gathering when spirits are high than at a meeting. Ask yourself, when did you last feel the need to hug or touch a colleague or fellow delegate when you meet up to discuss business?

There are obvious double standards that are adding to the sense of injustice too. For instance how can hotels be open and actively marketing meeting spaces on the basis of providing accommodation which puts them an immediate advantage over the dedicated sectors whilst the specialists are themselves ordered to stay closed?

None of us want to see any business disadvantaged further. We are pleased that hotels and restaurants will reopen. But when they are clearly seen to be aligned to what we do, it seems arbitrarily unfair and nonsensical that the wider range of support businesses cannot reopen too.

More often than not meeting venues are very large and able to offer safe and robust re-opening plans that can adhere above and beyond to social distancing guidelines. As it is industry standard to register delegates and visitors individually, we are well equipped to support the NHS Test and Trace service without the controversy that may arise when punters are asked to register for a visit to the local pub!

Like the many other businesses overlooked and forgotten, the Events & Meetings industry is right at the brink and now being pushed to limits. For us it feels like it will be impossible to survive.

An optimistic estimate is it will take at least 12-18 months to recover if we could reopen now. Whilst “conference centres” remain closed, we can only wonder at the message the Government is really giving to the many sectors and industries that desperately need support services like ours.

British business need us open and available to help give them confidence that they really can return to business as usual.

We are ready and willing to do whatever it would take to open on 4th July. Instead are being left behind.

Read The Backbencher Opinion on this HERE

Emma Jennings is Co-Founder and Director of The Studio Venue Company and a guest writer with The Backbencher

Which way will Boris turn the UK Economy in the post-Coronavirus World?

There is no doubt that the Coronavirus pandemic has put huge strain on public finances. Policies ranging from the Government’s furlough scheme to the construction of the Nightingale Hospitals have incurred huge financial costs to the Government.

Public debt has sky-rocketed, and the Government Debt Management Office  are working flat out to provide Government with the funds it requires.

The economic impact is likely to push the deficit as high as £260bn (BBC) but the question remains; which way will Boris turn? Will he pursue a policy of austerity; will he try to manage Government debt or will he have to resort to higher taxation to balance the books?

Throughout the General Election Mr. Johnson proclaimed his disdain for the term ‘Austerity’. He was attempting to distance himself from the policy pursued by the Tories in 2010. Regardless of its practicality, its popularity was of paramount concern for the Prime Minister. It is particularly unpopular in the cannonball constituencies that brought down the Red Wall in December, the areas where the constriction of public services was most felt.

For Johnson to pursue such a policy would be politically very damaging. There is also no indication that the Government wishes to pursue such a route.

Transport Secretary, Grant Shapps, has already pledged £2bn to be spent on British Transport to create ‘smoother and safer journeys’. This type of spending would simply be scrapped if austerity was being pursued by the Government.

Another option Mr Johnson holds is that of managing the national debt and ‘riding out the storm’.

If the Government wishes to avoid the policy of the oh-so dreaded Austerity and pursue its objectives, it will have to slowly deal and work with the accumulated debt. In 2019 the Tory manifesto pledged huge spending; 20,000 police officers, net zero carbon emissions by 2050, £14bn for schools, the list goes on…

The Government may wish to achieve these objectives and perhaps simultaneously avoid cutting spending that  may have a contractionary effect on the economy, which is imminently facing recession.

A possible solution may be to seek the promotion of economic growth in the long term, then pay off the deficit slowly without compromising on the objectives set out in the General Election. However, the Government must tread very carefully here. 

Maintaining, or even increasing such a high level of debt could have dire consequences for the country. We only  have to look at Greece to understand  the damaging effect that high levels of public debt  can have on the health of a country.

Some, particularly on the Left, suggest we should increase taxation to provide funds to bring down the debt levels. This could do more damage on the public finances than good.

A comparison that illustrates  this difference perfectly comes from the Labour Callaghan Government in 1976 when the tax rate for the top 1% of earners reached 83% on income. The richest 1% provided  11% of total Government income from tax revenue.

By comparison, in 2019 the top 1% of earners paid a tax rate of 45%. This led to the richest 1% providing 27% of income tax receipts .

Higher taxation has a contractionary effect on the economy as it leads to less revenue for the Government to address the financial issues. It can also  be hugely damaging, especially for the most disadvantaged in our society.

Higher taxation, or a tax on the rich is not the solution to balance the books.

The Left’s referral to the nostalgic, ‘Tax the rich’ slogan shows how they are blind to the complexities of economic policy.

Britain Getting Back on Track? It’s the Economy, Stupid.

Ah yes, it’s the economy stupid.

While I am not a massive fan of the former US President – Bill Clinton – it’s for a good reason. His ‘three strikes’ policy and his sordid relationship with Monica Lewinsky did little to endear him to me. But there are lessons we can salvage from his two terms.

To his credit, he was right about one thing when he grasped at the national mood around the economy.

This was highlighted in the campaign when he effectively took down Bush (’41) on how he himself was not affected by the economic decline in the early 90s, but he was.

The Clinton Administration, while divisive, led to the creation of a budget surplus of $128bn, 18.6m new jobs but increased income taxes.

Boris Johnson could take a lesson from Bill’s book. In the 60-page booklet, published by 10 Downing Street, the Government demonstrates a firm understanding of the kind of tactile approach necessary to emerge from the crisis.

The Clinton Administration, while divisive, led to the creation of a budget surplus of $128bn, 18.6m new jobs but increased income taxes.

“COVID-19 is a new and invisible threat. It has spread to almost every country in the world… The Government’s aim has been to save lives. This continues to be the overriding priority at the heart of this plan. The Government must also seek to minimise the other harms it knows the current restrictive measures are causing – to people’s wellbeing, livelihoods, and wider health.”

Transparency and the safeguarding of lives and livelihoods aside, the impact of COVID-19 on all accounts is demonstrable.

For example, the Government has since reported that 1.8 million households made a claim for Universal Credit between 16th of March and 28th of April. This is shockingly high and to make things worse GDP will fall by 35 % later in the year, according to OBS.

In April alone, unemployment rose from 850,000 to 2.1 million. A staggering rise not seen since records began. Photo by Emiko K from Pexels

The situation is bad for everybody as more and more jobs will be lost as businesses fail, look for example at British Airways who announced layoffs of 12,000 people last week, despite the Government’s furlough scheme.

I’m unsure which industry will seek to purge costs through staff wages in an attempt to stay alive next, but I know there is more to come.

These measures are hitting working people hard. Simon Dolan, the man, taking the Government to court over human rights violations due to this lockdown, shared a message from a supporter called Robin Hunter.

Robin states that his 20-year career in hospitality was eradicated, with little chance of getting back on his feet due to his age. To make matters worse, he was laid off before the furlough scheme was introduced, and now lives on a sofa in his mums flat, while receiving £74 a week from the government.

This could happen to anyone, as thousands of small business have not been trading over the last three months and possibly even longer. What’s worse is this could happen to you next.

Boris needs to do something quick; he needs to reopen the economy and get Britain back to work. This isn’t a matter of money over lives: I grasp that people are dying, but poverty kills too.

In the previously mentioned report, the government openly admits that the country needs to get back to work and produce. The report made clear that the longer the sustained lockdown and the reduction in economic activity, the harder to maintain public finances, including services like the NHS.


It’s simple: the longer we’re in lockdown, the harder it’ll be for the economy to recover. This will lead to a significant reduction to our current living standards as compared to the past as we will have to accept a crumbling public purse and even smaller private one.

This will lead to thousands more avoidable deaths through things like suicide and poverty. When it does not kill, it mentally scares and scars the lands around it, in the words of Lord Sumption. Therefore, we must end the lockdown as soon as possible to save the economy, save the people and save the future.

While the Clinton presidency is a divisive one, a pedal-to-the-metal approach is one that the British Government needs to have at the forefront if it is to emerge from the present crisis.

May’s Brexit Deal: The Pragmatic Approach

It’s becoming clear that May is playing a game with the future of the nation, our economy and business, and that is to hold the vote on her Brexit deal as late as possible. Downing Street confirmed a few days ago it would be after Christmas, likely in the New Year. What May is clearly hoping is that, by holding the vote as late as possible, she can essentially frighten MPs into backing it, many of whom are more opposed to no-deal than her agreement. Some MPs have accused May of self-interest, others of bungling. But what choice does she have? This is the only deal the EU will accept; that is clear enough. But MPs wont accept it. They are playing politics. They are the ones risking all our livelihoods. The game May is playing is not of her own making. Rather, it is the product of years of fantasy, lies and now a refusal to face reality. 

What will happen then, when May does put the deal to the Commons? It’s anyone’s guess. To my mind there are 3 main outcomes:

  • The deal, by a mixture of scaremongering, practical thinking and some pragmatism is begrudgingly accepted by the Commons
  • The deal is rejected by the opposition and unsatisfied Tory Backbenchers, May resigns and the country slips through a mixture of apathy and incapability into no-deal
  • The deal is rejected, parliament manages to organise itself and utilise Dominic Grieve’s amendment to in some way extend Article 50, and at this point a confidence vote in the Commons would probably be a reality

May, no doubt is hoping for the first of these to occur, and to be honest, for all my distain for the constitutional disgrace that is the current government, so am I. At this stage pragmatism should be paramount. Yes, May is a malignant spectre no one seems able to exorcize, but it is clear now more than ever that she is right on one count: her deal is the only deal. The EU will not give anymore, so accepting her agreement is the logical option. It is for this reason I would not advocate for my third outcome, because the problems would be identical no matter how long we extended Article 50 for. A General Election might change the arithmetic, but there is no guarantee.

But for god’s sake we must avoid no-deal at all costs. Business cannot afford it; people cannot afford in and nor can the nation. The total dismissal of the reports produced by The Treasury, Bank of England, IMF and countless other independent economic experts which forecast potentially devastating ‘short-term’ impacts of a no-deal, both “chaotic and severe” is frightening. The dismissal of such predictions, by people devoted to these subjects, by experts in the field, by Mark Carney whose duty it is to defend the economy is beyond naïve; its utter recklessness. All have predicted major economic strife should Britain leave the EU with no-deal, the loss of jobs, further wage squeezes and less funding for public services. And yet so many accuse them of scaremongering, of launching ‘project hysteria’. The leading Brexiteers are always first to rubbish the views of the experts: John Wittingdale called one report which forecast dangers for the economy “unduly negative… rushed, skewed and partisan”. These people are not interested in facts unless they support their position. A good analogy would be going to the doctor and being told your drinking habit was bad for your health, and then dismissing your doctor as “partisan” or “negative”, demanding a second opinion, and when that come back the same, dismissing all the opinions as “negative”; running a “fear campaign”… promptly drinking yourself to oblivion.

The reality of the situation is simple. The British economy, as the experts rightly point out is not prepared or strong enough to sustain a no-deal Brexit without significant damage. We lack the infrastructure, for instance, to make or supply the parts required by manufacturers in the auto or aerospace industries without imports, free of tariffs and checks, from the EU. Now, in the ‘long term’ this might become less of an issue, but how long before companies find it no longer economically viable to operate from the UK? Small business who rely on EU trade wont even have that long. Most work in the short term. So while one might argue the larger companies might ‘hang-on’ until a deal can be arranged, small businesses wont. Even those who don’t rely on EU trade will feel the pinch. Any recession will squeeze incomes and raise prices, and as people become more conscious of the money they don’t have, so the small and medium sized companies, whether they rely on the EU or not will suffer falling profits, with job losses the inevitable result. The argument of many on the hard-Brexit side, that a hit, however severe, to the economy would be a ‘short-term’ event and that Britain would pull through ‘in a couple of years’ may be true, but unfortunately, most businesses wont have that long in the event of no deal, and I suspect larger companies wont stomach higher costs and a weaker economy for as long as the Brexiteers hope.

The Brexiteers would ‘get our country back’, but what sort of country would they have? And at what cost? That is why I say, whatever your views on May and her infamous behaviour, realise that the ‘game’ she is playing is one she has been forced to take part in. The current impasse is the product of deep-seated ideological stances and intransigence by MPs. Back her deal. Principles are all well and good, but now is not the time for fine words. In 100 years time, our grandchildren will not remember the impassioned speeches against or for this agreement, only the result, because that is all that matters. Let us do the pragmatic thing, so that they may not look back at us with distain and regret; so that we may gift to them something more than hollow words, broken promises and a national disaster. Let us not leap into the dark.

‘A Leap in the Dark’ (Punch, 1867)



The return of mercantilism? Libertarians and Trump’s trade war

It is a generally uncontroversial tenant of economic liberalism that free trade is a ‘good thing’. This
idea can be traced back to one of liberalism’s founding thinkers, 18 th century economist Adam Smith,
whose famous The Wealth of Nations was written to make the case for free trade and against the
then common mercantilist practice of states imposing tariffs to lower imports and stimulate exports.
With President Donald Trump turning on free trade and embracing the mercantilist outlook that
Smith opposed, the obvious conclusion is that liberals and libertarians should be in uproar.


Not quite.

The Trump administration’s recourse to tariffs imposed especially (but by no means exclusively) on
Chinese goods is certainly misguided, and must be called out as such by Smith’s successors. But it
has also opened the way towards a much needed discussion of the real mercantilist threat, namely
Chinese economic practices. For this, liberals can be grateful.

President Trump’s tariffs rest on the general premise that globalisation has hurt the US, and a more
particular one that the ‘unfair’ Chinese approach to trade has done this. The first is deeply mistaken,
and acting on it will only harm the economy. The second cannot be dismissed.


The modern form of globalisation resulted from capitalism winning the Cold War. As the economies
of communist states collapsed, and their ideology was discredited, the late 1980s and 1990s saw
free markets embraced from Eastern Europe to Asia. But as trade barriers lowered and work was
outsourced to new capitalist states, the US manufacturing industry declined and those it once
employed began to call for tariffs to turn back the clock and save their jobs. Cue President Trump.
The idea that globalisation harms the American economy and tariffs are the solution flies in the face
of everything liberals and libertarians believe. Not only did the benefits of outsourcing outweigh
their costs, but statist attempts to stimulate local manufacturing help no one and harm everyone.
Take the Trump administration’s imposition of aluminium and steel tariffs. In the short term, the
resulting rise in steel prices is will undoubtedly benefit US metal producers and their employees, but
in the long term automation means there will be fewer jobs available in such industries anyway.
Meanwhile, the gains from global supply chains that lowered prices for everyone will be undone. As
US companies reliant on these metals for their own products are forced to raise prices to
compensate for their own increased expenditure, it is the majority of consumers that will be hurt.
The administration’s tariffs, alongside retaliatory ones from US trading partners, already threaten to
increase the costs of products ranging from Coca Cola to washing machines to housing.

It is as though the Republican Party has forgotten one of its most cherished arguments against state
intervention: that, in the words of libertarian thinker Henry Hazlit, it is necessary to think about the
consequences of any given economic policy ‘not merely for one group, but for all groups’.

President Trump’s particular targeting of China as a threat to US employment, however, rests on
much more legitimate concerns and cannot be similarly dismissed. Among the states rejecting
communism in the 1980s was China. In China, however, it was the ruling Communist Party itself that
was responsible for the change, turning to a mercantilist state-led form of capitalism that threatens
more liberal economies. Under Communist Party rule, state-owned firms benefit from subsidies in
order to ensure particularly high production of products such as steel, while foreign firms are forced
to hand over their technological as a condition of trade with China. All of these policies serve the
traditional mercantilist aim of stimulating Chinese exports, in this case taken to the extreme with
hopes of Chinese global economic dominance under the ‘Made in China 2025’ plan.

So while his response remains an act of economic self-harm, free traders should not dismiss the
genuine concern that underpins President Trump’s tariff policy. It is the mercantilism in China, rather
than the more limited form in the US, that is at the heart of current threats to free trade. Liberals
must be prepared to engage in the debate on China that President Trump has opened if the
globalised capitalism they champion is to survive.

The Price of Brexit: The Martyrdom of Business?

With Brexit now only a matter of months away, and nothing agreed, either with the EU or within the British cabinet, the martyrdom of our business to the cause of an ideologically driven Brexit appears as real a possibility as ever. It seems that there are some in Government, and millions across the country hell-bent on Brexit at any cost; a cost which I fear they can neither fathom nor understand. Recent studies which showed most Brexit voters would rather a hard-border in Ireland than remaining in the customs union are the epitome of the Brexit farce, and the inability of so many to realise the effects of such actions. They would have us create the biggest security hole anywhere in the world at a time when international terrorism is highly dangerous: and if ever radicals in Ireland needed fuel for action then this would be it…

But as the title suggests, the sinking of our economy seems to be the last concern to most in Government, with no positive noises and even less progressive action. Lets just take a second to review what business has been saying in the past week.

Jaguar Land Rover, which employs near 40’000 people in the UK as of yesterday questions the logic of a hard Brexit, calculating that it would lose in the region of £1.2bn per year to trade tariffs; the inevitable result of a destructive Brexit. The company even questioned whether remaining in the UK would be profitable should this eventuality occur? Similarly, Airbus which employs around 11’000 people in the UK has raised concerns about Brexit and the risk it may be forced to withdraw funding should a poor or no deal be the result of thus far fruitless negotiations. In this instance however, Jeremy Hunt, who clearly knows a lot about running a large organisation, which must be why the NHS is doing so well at the moment (in his mind at least, if not to the rest of the population), declared Airbus’s concerns “completely inappropriate”… as if he expects everyone to just say nothing and wait for the end. Funny really, it was okay for businesses who backed Brexit to speak, and its okay for those still brave or stupid enough to invest in Britain to do likewise, but anyone who fears the real and present dangers of this calamity must be silent: how’s that for democracy?!

And lets not forget the comments recently from the Society of Motor Manufacturers and Traders (SMMT). They have warned that the current Brexit process is “death by a thousand cuts” for an industry which relies on frictionless trade. Recent figures show that investment from companies represented within the SMMT has been halved from the first half of 2017.

The director of the CBI summed up the current situation best, when she said “facts ignored today mean jobs lost tomorrow”. Worryingly, we live in a world where facts are just what politicians say they are, when the people chose to believe them. No longer are experts, business and those with years of experience listened to, but cast off as “traitors” to the cause. What we need, as Stephen Martin argued, is “less antagonism and more pragmatism”: we should be so lucky. As long as it suits individuals like Boris to sabotage the governments position on Brexit, we will continue down the slippery slope to disaster.

For me, much of the government’s position can be summed up in one short phrase: “F*** business” in the words of our eloquent Boris… which is ironically what he and the government will end up doing if they don’t get their act together pretty damn quick! The complacency is galling, as is the complete disregard ministers seem to have for the thousands of workers and their families whose futures are threatened by their ideological squabbles.

So many in this country are so eager to sacrifice their children’s futures, the economy and business to the blood stained alter of Moloch. It genuinely terrifies me. But then, every country ends up with the government it deserves, and I truly believe that we have just that, populated by pompous self-opinionated toffs who think they know more about business that business.

CommonWeal are wrong – Scottish land seizures would be disastrous

Public authorities would be allowed to seize land under the “Public Land Value Capture” proposal suggested by Scottish think tank Common Weal think tank. In short, public authorities should have the legal means to purchase land at the existing “use value” rather than at the anticipated future value once planning permission is granted (known as ‘hope value’).

Public authorities would borrow against the future uplift (upswing) in land value from the granting of planning permission to develop the site. This borrowed sum could then be used to fund the master-planning, infrastructure and construction of public-rental housing, while some plots could be sold-off to the private sector at a profit. Either way, the reductions in land costs would eliminate land speculation in the development process and increase the affordability and quality of housing development.

What a grand idea! Let’s do it!

Not so fast

A major reason for the housing prices is overregulation and the difficulty of getting building permits. There are planning and zoning laws, building codes, height restrictions and greenbelt policies to restrict the supply. There are help-to-buy schemes, low interest rates, tax privileges for mortgage holders and other policies to drive demand through the roof. Landlord registration, stamp duty and HMO licensing limiting the number of people who can share a flat push up the price of renting to the sky. And so on and so forth.

That’s why building land ends up being so expensive. And that’s also why those darned developers are making a lot of money – but it’s not money for nothing – otherwise everybody would be jumping in on investing into land!

Let’s take a little peek at the planning performance of the local authorities: http://www.gov.scot/Topics/Statistics/Browse/Planning/Publications/planapps2017annual

For “local” developments, the average time was in the last year about 12 weeks. 3 months will be spent on haggling with the council whether you can build on your land, hoping for the best. That’s not too bad although the time can easily climb to 30 weeks and more, the better part of the year.

For “major” developments, the average time was about 45 weeks, easily a year and sometimes two. (All of these are averages so who knows what extremes hide behind them – at the top is Midlothian with 5 developments and an average time of 96.2 weeks.)

These are just the times spent on the permit itself, not preparing the papers or anything else. If you want to build and you find a piece of land, you still have to wait for months or years for the permit.

The elephant in the planning room

But let’s get rid of a moral issue first: the kind and gentle ability to “compulsory purchase land at existing use value” is nothing else but the power to expropriate. The unfortunate victims of this landgrab will be reimbursed – but don’t expect them to make profit out of their own land or being able to stay on it.

The paper perversely quotes a planning academic: “planning permission is a public gift, restoring to applicants the right to develop land when it is clear that this is in the public interest. Any increase in land values is also therefore the property of the community”. The right to develop your own land was taken away and when and if it is most graciously returned, it is to be considered a gift! Any increase in value for having to go through the bureaucratic hell is to be taken away.

However, the paper strangely forgets that this very law proposal will do away with “applicants” – the purchases will be compulsory. What a tragic attitude in a land that has suffered the Clearances!

This introduces a great motivation for the council to find potentially profitable land, buy it for cheap, kick out the people owning it and sell it off.

It’s all for the good of the people.

Why don’t we just let councils invest?

Public authorities can already invest and if they build more new houses for cheap, what’s the problem?

After all, the process will be based on a careful analysis and with due public consultation… meaning it can take years before even getting to the permit stage. One can only hope that CommonWeal takes these costs into account.

Worse, the council will have to go through the same long permission process as the developers. The paper seems to assume these costs away for some reason. If getting a permit is a simple affair, clearly the greedy developers oriented on a quick buck are doing something wrong. Or maybe the councils are wasting everybody’s time – but let’s think positively.

If the permission process takes months or years, the council will have to jump through the same hoops and expend similar amounts of money as the developers. That assumes the bureaucrats will be efficient and they won’t make the process even slower but let’s remain positive.

This is supposed to be an “extremely safe investment”, as long as the planning permission is granted. If the council does everything as it should, this extremely safe investment will be as speculative as that of those tricky developers. If the application fails, the council will be stuck with the loan. If the costs end up being too high, the council may lose out on the whole deal. That’s how investment works.

Introducing moral hazard

Of course, the council could find it very easy to get a planning permission – after all it’s granting the permission to itself! Since large amounts of money and political futures will be on the line, the council will be strongly motivated to make sure any permits are quick and painless.

This is not a problem if it’s just pointless bureaucracy. But if giving a permission is really such an incredibly valuable and arduous process for a good reason, the council will be motivated to skip all those environmental checks or listening to those pesky citizens, who rarely seem to want new construction. Because now, the council is a profit-hungry developer, too. And it doesn’t need to ask anybody for the land. It can just take it. For a reasonable price, you know.

How will this work out in practice?

The hostile competition option or how to ruin a market

The council will be competing with developers on a market with a limited supply of land. But the council doesn’t have their limitations – it can pick and choose pretty much any land it declares to be useful to itself (a “simplified development zone”). The council could in fact take over any land that is under development. Wherever developers find a good spot the council can just march in and destroy their investment.

Landowners will suffer from an additional source of uncertainty. What if your council decides that it wants your land? What if it just “starts planning”? Who in their right mind would build anything on their land or invest in it if it can be taken overnight – or five years later?

But this is only the small and medium-sized landowners and developers. The large companies and owners – and especially the politically well-connected ones – won’t have a problem with the council. This will lead to more centralisation in the housing market and more entanglement in bureaucracy.

And house prices will go even higher.

The friendly competition option – or how to make lots of money with corruption

But why can’t they all just be friends? The developers don’t need to fear the council. In fact, they can use the council to help them to invest.

The developers will pick and choose a good spot for new housing construction. They don’t need to restrict themselves to landowners who want to sell or offer them more money. The council will work its magic and remove all obstacles – people, properties, paperwork. Then it will sell the land back to the developers who will save time and money on permits and negotiations. The more useful councillors will be invited to give a presentation in Tahiti and everybody will be happy.

Except for the people that wanted to keep their land or make something out of it. Never mind that. Victory for the big guys!

But there’s more. Sub-contracting will “possibly be a procurement process” whereby contracts are given on a case by case basis and with specific contractual requirements for build design and quality. Although this is claimed to benefit small and medium sized businesses, the “specific contractual requirements for build design and quality” will probably mean that only large companies will be able to fulfil them.

Who knew Public Land Value Capture could be so useful? Big developers will be sure to line up to support CommonWeal and their proposal!

A Libertarian Approach to Student Debt

Both the Tories and Labour Party have attacked the current higher education funding system for leaving thousands of students in debt that they can never repay. While Corbyn admitted he could not promise to wipe debt, Theresa May has launched a review into student debt and tuition fees. At the moment, fees are capped at £9,250, but come with a punishingly high interest rate of 3%above RPI. This interest begins to accrue from the day that students start university. How can we ensure equality of opportunity for young people of all backgrounds without leaving the next generation of workers in enormous debt?

Reducing Interest Rates

The simple fact is that the loans offered to students are too expensive, with three quarters expected to never repay the full amount. The burden of paying back this debt therefore falls onto the taxpayer, so that those who never went to university are paying for those who did. A true libertarian approach would cut interest rates to be in line with market values.

Senior economic advisor at PwC, Andrew Sentance, argues that 2018 could see interest rates triple, due to high inflation and global economic growth. To charge students an extra 3% above inflation is creating unnecessary debt. This is caused by state intervention rather than the invisible hand of the market.

Diversifying the Market

The UK has one of the highest tuition costs in the world, largely due to an unfree market. Almost half of school leavers now go to university, even if it isn’t the right option. For a genuinely free market to keep costs down, there needs to be a wider range of options.

This can be achieved through the use of apprenticeships or work placements for those who thrive in a vocational sector. Not everyone is suited for university, but many see it as the only option. Furthermore, many courses are charging the same amount despite varying in costs. Different courses should set different prices according to market forces.

Encourage Private Sponsorship

The most effective way to lower costs and the debt burden on students is for the state to be rolled back. Instead, private companies should provide sponsorship and bursaries where they see potential in students. More debt reduction and consolidation companies may enter the market in order to further ease the burden without the need for state intervention.

Successive governments have done a great disservice to our young people in the way they fund tertiary education. Interest rates should come in line with the market and private companies should be given greater freedom to sponsor students. By diversifying the education market for over 18s, overall costs and therefore debt can come down.

Are ‘care pensions’ the way ahead for social care?

An insurer’s policy paper, advising the introduction of a ‘care pension’ is gaining some traction. It aims to help tackle the continuing, worsening crisis the country faces in paying for care services.

Treasury officials have expressed interest in the idea, devised by Sir Steve Webb, former pensions minister under the 2010-15 coalition government and now director of policy at the insurance company Royal London.

The plan would allow people approaching retirement to take money from their pension pot – without paying income tax – as long as they use that money to pay premiums on a new form of insurance for long term care costs.

Return of the cap?

In order to be effective, the government would need to resuscitate their scrapped policy to cap care costs for individuals. Much like a train on an ailing rail franchise, the policy was repeatedly delayed before finally being cancelled, with no indication of an alternative.

Back in 2013, Jeremy Hunt, announced a cap on care costs at £72,000. This would mean that after £72,000 the government would pick up the bill for people’s care. The policy was finally meant to come into effect in 2020.

It was scrapped in December 2017, following the Conservative’s general election disaster. A disaster which was largely blamed on what Labour and many Tory backbenchers called a ‘Dementia Tax’. This was the name given a separate policy that could see anyone with assets over £100,000 selling their homes to pay towards the costs of their care.

Without a cap on care costs, insurers could face bills running into hundreds of thousands of pounds. This has made them far too wary to introduce any packages to cover the costs of care in later life.

How care pensions could work

The ‘Care Pension’ would utilise the existing ‘drawdown’ reforms. These currently allow people to draw money from their pension pots to spend or invest when they reach age 55. In a policy paper setting out the proposals, Royal London state that: 1. introducing a care cap and 2. Making drawdowns for care funding tax free, would remove the barriers preventing insurance providers from introducing policies specifically to cover care costs.

Rather than being marketed as care insurance, Royal London’s policy paper suggests policies could be classed as ‘inheritance insurance’, because they would prevent people digging into savings and assets to fund their care.

The policy has received the blessing of Damian Green MP, yes the one who supposedly downloaded pornography at work. Mr Green is working with the Resolution Foundation think tank on a project to address aging issues.

Prior to his ejection from government in the furore surrounding porn-gate, Mr. Green was responsible for heading up the work of multiple departments on the social care green paper, which is set to be published in summer 2018. This makes the former minister a potential window through which we can view the general direction the green paper was heading, at least until his departure on the 20th of December 2017.

Speaking on BBC Radio 4’s Today Programme, Mr Green said: “We need to look at the way people contribute on a personal basis in what is effectively an insurance policy.” He suggested that those who are now nearing the end of their working life could “put aside” money to fund care, while those aged 35-40 should consider making their own investment to “fund the potential for social care in later life.”

The MP for Ashford also said that he hopes the green paper, now under the supervision of Jeremy Hunt’s department, would “throw up some radical ideas” and urged “serious public debate” on care funding.

This has been floated before…what were the challenges?

This is not the first time insurance has been touted as the key to solving the crisis in social care funding.

After the original care cap policy was formulated in 2013, ministers had believed that a new market in care insurance would develop. But when the government put the feelers out in early 2015, the insurance companies’ responses were lukewarm to say the least. What were the problems then and what challenges would a government face in adopting a model like this in 2018?

What is capped?

Firstly, insurers complained that the care cap did not factor in food or accommodation costs. This scepticism was strengthened when local authorities said they would only count costs incurred in what they defined as meeting “reasonable care needs”, rather than looking at the actual, total fees that individuals are paying for care services.

Unimpressive returns

Speaking generally, care insurance does not represent the most lucrative market to insurers. What percentage of people who pay for car, home or mobile phone insurance actually make a claim? Not that many, this is how insurance companies make their money.

Compare this to how many people who took out a care insurance policy would need to cash it in. This is the difference between accidents and inevitabilities, insurance companies prefer to deal with the former.

Changing perceptions

Over the past few years the media have highlighted the critical shortage of funding for social care, alerting more and more people to the issue. However, most people still have an ingrained view that care in later life is something funded by the state, like the NHS. How this would affect demand was a concern of insurance companies in 2015 as it will be today.

The current criteria for care funding, the hypothetical situation under a cap and the one that might incorporate an insurance component are all complex, in terms of how people’s ability to ‘self-fund’ is assessed and what proportion, of which element of care, the government will fund.

Overcoming this complexity and making it clear what people need to buy, will require considerably bold messaging from government, in the face of attacks from those who feel that a hypothecated tax is the answer to the care funding crisis.

Can it work

Potentially it could, assuming the hurdles above are overcome. There would need to be a combination of new social care policy, creating a healthy environment for a new insurance market. This market would need robust regulation of policies and pay-outs, while all concerned would need to supply strong messaging to drive the message home the situation is changing for the better.

Overall however, it sounds like a rather lightweight solution to a heavyweight problem. This particular proposal amounts to not much more than people increasing to their pensions to fund care in later life.

This could help ameliorate the care funding situation in the future, but do nothing from the situation currently. As Sir Steve Webb admits: “It is not about solving the problem of today’s 85-year-olds – it’s too late to solve that. This is about the next generation, people who are around the age of 60 and now making choices about their pension pot.”

To tackle the care funding crisis now and to do so for the population as a whole, a mix between new modes of insurance for those who can afford it, with greater taxation to help those who cannot, is what will be required. The options for taxation are themselves varied, from a full strength hypothecated tax to semi-hypothecated and the kind of local taxation which has already been tried, albeit to little effect. Perhaps indicating which option the government should go for.

The task to reform social care and sources of funding is a mighty one. Years of ignoring problems have exacerbated them. The forthcoming green paper will need to take a holistic approach and properly formulate each policy and function to work correctly with one another. It will need to have a long term vision to transform care into everything it can be. The solutions will, as Mr. Green says, need to radical and far reaching, much more so than this most recent proposal from Sir Steve Webb and Royal London.