Debate Magazine

Outbreaks of Common Sense in Right Leaning Think Tanks!

Posted on the 02 February 2017 by Markwadsworth @Mark_Wadsworth

Exhibit One: Philip Booth (of the Institute for Economic Affairs) in today's City AM:
Cafod argues that we should remove our trade barriers without expecting anything in return from other countries. There is much to be said for this. Our trade barriers hurt British consumers and poor-country exporters and, ultimately, harm UK industries with an export focus. For example, we still have very high tariff barriers of up to 30 per cent on processed foods such as coffee and chocolate. We should just remove them...
Trade deals have become extraordinarily complex because most trade barriers relate to regulation. When it comes to agriculture, for example, regulation of GM foods is used to keep imports out. In financial services, we make enormous efforts to make already complex national regulatory systems internationally compatible. This all requires a great deal of commercial expertise. The result can be a marathon process and trade deals that create regulatory regimes that benefit incumbents and large firms.
Outside the EU, the UK government can be more relaxed about not using trade deals to harmonise regulation except, perhaps, in extreme cases of health and safety. Products and services that abide by UK regulations can be clearly labelled as such and consumers can then make their own choices.
We cannot go on negotiating trade deals that resemble the Encyclopaedia Britannica. Such deals should go the same way as the hard copy of that great set of books. We should give an intellectual and political lead so that countries such as India and most African nations might follow. Such a policy would enrich consumers and disempower elites.


He doesn't specifically say "Sod this, let's have unilateral free trade" but I think we can assume that's what he meant.
Which is what I and others have been saying here, free trade agreements (which sometimes take ages to sort out) are themselves a hindrance to free trade, not least because a free trade agreement with any one particular country automatically means less favourable terms for other countries. Far better to start with unilateral free trade as a general assumption and - if needs be - impose embargoes now and then.
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Exhibit Two: David Bentley (of Civitas) in The Times (via MBK):
[The government's] goal is to increase the amount of land brought forward for development and the speed at which it is built on. There are various proposals for achieving these objectives and one fundamental obstacle to both: the right of landowners to hold back potential sites and squeeze as much profit from them as they can.
Securing planning permission for homes on greenfield sites usually results in an enormous windfall for the landowner. These are often life-changing sums for a farmer, say, who happens to occupy the land that is needed for new homes due to the expansion of the local town or city.
The average hectare of agricultural land in England is worth about £21,000; with permission to build homes on it that rises to about £2 million (excluding London, where values are very much higher still). If the owner does not think they are getting a good enough price, they can sit tight and wait while the market rises, as it usually does, or someone comes along with a better offer.
But the right to extract every last penny from sites like this — enshrined in the 1961 Land Compensation Act — is to the cost of the rest of the community. The more the developer pays for the site, the less money there will be for infrastructure or social housing, and the more the new homes will have to fetch to turn a profit...
Underlying the housing crisis is the issue Mark Twain was addressing: that land is inherently scarce and inflates in value as the population grows and more people come to draw on it. The question is, who should benefit from this progress?

He's falling for the "increasing supply will push down prices" myth but at least he's grasped some of the basics. I don't like his suggested solution to this either, as Richie in the commenters says: "Three words, 'land value tax'.", but hey, it's a start.


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