11 Sep 2012 18:25:22

The Government ought to rouse our sleeping casinos

Christopher Snowdon is a Fellow of the Institute of Economic Affairs. Follow Christopher on Twitter.

They say that laws are like sausages, it is better not to see how they are made. If so, the 2005 Gambling Act was of the supermarket own-brand, ‘sixteen for a pound’ variety. It began with some sensible proposals from the distinguished economist Sir Alan Budd and ended with a fudged piece of legislation which had been built up, torn down and hastily patched back together.

The 2005 Act aimed to reform every part of the British gambling industry but it was casinos which drew all the attention. You may recall that peculiar period in late 2004 and early 2005 when there was fevered talk of “Las Vegas-style super-casinos” in parts of the press. It was never adequately explained what a super-casino was, nor how it threatened the moral health of a nation more seriously than a common or garden casino. Nevertheless, the prospect of such an establishment being built in Blackpool or Manchester became a fleeting tabloid obsession.

Unusually for New Labour, the problems stemmed from poor presentation. The earlier 1968 Gaming Act had granted a set number of casino licences to be used in a set number of permitted locations. In the spirit of localism, Labour recommended giving any town the chance to have a casino if it so desired, subject to planning permission, consumer demand and approval from the Gambling Commission and local council.

With hindsight, it would have been better if Labour had mooted some limits to casino development from the start. Transferring power from central to local government was never likely to lead to the country being overrun with gambling dens, but for those who disapproved of casinos, it was enough to know that there would be no theoretical limit on their number. Opposition came from the incumbent gambling industry, backbench MPs, certain newspapers and faith groups such as the Salvation Army. This alliance of political enemies, vested interests and moral entrepreneurs won the day. No ‘super-casino’ will be built in the UK and, in many respects, the casino industry is in a worse state today than it was a decade ago.

In its haste to appease its critics, the government discarded necessary reforms which would have attracted little attention had they not been part of a broader package of deregulation. After blowing too hot in 2000-03, the government blew too cold in 2004-07 and the modest reforms required for the casino industry to adapt to the twenty-first century were abandoned along with the headline-grabbing schemes for ‘super-casinos’.

Today, the casinos that were created by the 1968 Act are still tied to the same old permitted areas. This means over-provision in some places and under-provision in others. Punters could take some consolation from the sixteen new licences that were created by the 2005 Act, but these were mainly granted to places which are already well served with casinos, such as Leeds, or places which do not have sufficient demand for them, such as Stranraer. Seven years later, only one of these sixteen casinos has been built. It is unlikely than more than a handful ever will be.

The radical shake-up of the casino industry that was first envisaged never took place, but it was surely nobody’s intention to prevent existing casino licences from being used. Today, however, more than fifty of the country’s 202 casino licences lie dormant despite several local councils expressing an interest in using them. As I explain in a new Institute of Economic Affairs paper Seven Years Later: Casinos in the Aftermath of the 2005 Gambling Act, this is the result of poorly drafted legislation which failed to make the basic reforms that anyone familiar with the industry agreed were needed over a decade ago.

There was never even a remote possibility that the UK would see “blackjack on every street corner”, as theDaily Mail once put it, but it does not seem unreasonable for any sizeable town or city be able to host at least one small casino if the community is in accord. If the current government is not prepared to look again at regenerating one or more seaside destinations with a resort casino, it should at least allow the take-up of existing licenses by the many local authorities that would welcome the jobs and investment a casino would bring.

The economic benefits that would derive from modest reforms (which require no new laws to be passed) would not be trivial. It is estimated that an average casino generates between 120 and 150 jobs and produces £600,000 in gaming duty each year. With more than fifty licences currently unused, the Exchequer is potentially foregoing more than £30 million. This is not going to pay off the national debt, but nor is it peanuts. Quick fixes do not come along very often in tough economic times, but this could be one.

4 Sep 2012 06:57:31

Matthew Oakley: How a northern pay-restraint-for-more-infrastructure deal would work

Matthew Oakley is head of economics and social policy at Policy Exchange. His latest report, on which this article is based, is Local Pay, Local Growth. Follow Matthew on Twitter. 

Will a new runway at Heathrow or Boris Island solve this country’s growth problem? Boosting airport capacity may well help in the long term, but you only have to look at the delays over HS2 and the likelihood of upcoming legal wrangles to realise that, by their nature, large infrastructure projects take a long time to get off the ground.

With one in ten people currently unemployed in the North-East, the Coalition needs an approach which delivers growth and jobs now and ensures that all parts of the UK – not just the South-East - see the benefits. One answer may come from reform of public sector pay.

Pay in the public sector tends to be negotiated through national collective agreements with the unions, meaning that nurses in Doncaster get paid the same as nurses in Devon. This has caused large differences between public and private sector pay to develop. Recent estimates from Policy Exchange suggest that the difference in pay that a public sector worker might expect compared to their private sector equivalents ranges from around an 11% premium in the North East to around a 6% penalty in the South East.

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27 Aug 2012 06:36:41

New Centre for Policy Studies report shows widespread public misunderstanding of economic issues faced by Britain

By Matthew Barrett
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A poll conducted by ComRes for the Centre for Policy Studies has found that widespread ignorance of our economic situation exists amongst the public.

The poll found that:

The results come as part of an analysis of the public's understanding of the Coalition’s economic policies, "A Distorted Debate: the need for clarity on Debt, Deficit and Coalition Aims", written by Ryan Bourne and Tim Knox, which is published today.

The report contrasts the aim of the Coalition - to eliminate the current structural deficit by the end of this Parliament and stem the increase in public debt as a proportion of GDP - with the reality: the cyclically-adjusted current deficit had only fallen by 13% by the end of 2011/12, and the great majority of the reduction in the deficit has come from cuts to investment spending and tax increases, not from current spending cuts. The report's authors also show that only 6% of the planned current spending contraction has so far been implemented.

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10 Aug 2012 13:14:41

Andrew Lansley's plain cigarette packaging plans called "a draconian attack" on freedom by the Institute of Economic Affairs

By Matthew Barrett
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Andrew Lansley's consultation on plain packaging for tobacco products ends today. The Health Secretary has support from backbench MP - and medical Doctor - Dan Poulter, in the Guardian today. Dr Poulter argues plain packaging...

"...could certainly help to reduce the brand marketing appeal of cigarettes to teenagers, and most importantly, help to stop young people from developing a smoking habit that can only shorten their lives."

Whatever the rights or wrongs of the proposal, the Health Secretary has two headaches this week. Firstly, the Hands Off Our Packs campaign delivered a petition of over 235,000 people opposing the plain packaging policy to the Department of Health on Wednesday. The Health Secretary is not one to be swayed by petitions, as the recent Health Bill situation showed. He has been open to intra-Coalition opposition, however, so it's perhaps worth noting that Hands off Our Packs is headed by Angela Harbutt, who worked for Sir Menzies Campbell during his time as Lib Dem leader, and now runs the Orange Booker blog Liberal Vision.

Mr Lansley's second headache will come from the harsh attack on the proposal by the Institute of Economic Affairs. The IEA's Deputy Editorial Director, Dr Richard Wellings, says:

"Plain packaging legislation would represent a draconian attack on the freedom of smokers, retailers and manufacturers. Branding on packaging plays an important role in providing information for consumers, helping them choose between high and low-quality products. Accordingly there is a serious risk that plain packaging would lead to more smokers buying counterfeit products containing high levels of dangerous chemicals. Plain packaging is therefore likely to be entirely counterproductive from a health standpoint. The evidence that it would reduce smoking is also highly questionable."

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8 Aug 2012 17:01:46

The IEA criticises the Coalition for failing to reduce the size of government and calls for tax cuts

By Matthew Barrett
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This morning's growth forecast figures were disappointing. David Cameron, speaking to LBC radio, said:

"Obviously the growth forecasts are a matter for the bank of England, but they’ve all been coming in line with the reality, which has frankly been disappointing. I think what’s happening is there’s a rebalancing of the British economy taking place. ... yes, it’s tough, yes the growth figures have been disappointing, but there’s a rebalancing of the economy taking place – more enterprise, more small businesses, more start-up businesses that are going to be the engine of the future, and we just have to roll up our sleeves and work really hard to achieve this economic rebalancing that has to happen."

The Institute of Economic Affairs' Communications Director, Ruth Porter, has released a statement calling for the state to get out of the way, and allow tax cuts and labour market liberalisation:

"It’s hardly surprising the economy is not recovering when the government has failed to reduce public spending significantly. Focusing on increasing private sector investment and productivity is the key. Heavy regulation and high taxes will inevitably put businesses off investing."

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31 Jul 2012 11:35:45

The IEA publishes its LIBOR Reader

By Peter Hoskin
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A very quick post to point ConservativeHome readers in the direction of the Institute of Economic Affair’s new pamphlet on the LIBOR scandal. It contains everything that any normal, interested person could want to know about intra-bank lending rates: a Q&A on what went wrong, a timeline, and a selection of articles from across the media on the whole dispiriting affair. One of those articles is by ConHome’s own Andrew Lilico — it was the detailed and typically insightful column that he wrote on 2 July. Now, courtesy of the IEA, you’ve got a good excuse to read it again.

27 Jul 2012 13:05:06

Matthew Sinclair becomes the new Chief Executive of the Taxpayers' Alliance

By Paul Goodman
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Congratulations to Matthew, who was the TPA's Director until this promotion - and is of course a regular contributor to this site.

Matthew Elliott is leaving the post: best wishes to him, too.  His leadership has helped to drive the TPA's success as an influential contributor to political debate and discussion in Britain.

And Jonathan Isaby, formerly of this parish, has taken on a beefed-up role for the TPA, dealing with the media as well as Parliament.

More as and when we have it.

27 Jul 2012 06:36:06

Dr James D Boys: National Security - The Government has made a good start, but there's a lot more to do

Dr Boys is a Senior Visiting Research Fellow at King’s College London and a Transatlantic Research Fellow at the Bow Group. The report on which this article is based, Intelligence Design, can be accesed HERE.

Protecting its citizens at times of crisis should be a top priority for any government.  In order to protect citizens effectively, decision-making structures in the executive must be both efficient and robust. However, as the twenty-first century continues to evolve in ways few could have forecast, many Western powers appear to be struggling to adequately project their military power as they face a host of global challenges, not least of which is a restrictive economic environment that has curtailed defence expenditure and costly overseas initiatives.

In an effort to address contemporary challenges the Coalition Government has initiated a series of changes to the UK national security architecture. In May 2010 it configured a National Security Council, and a year later President Obama and Prime Minister David Cameron announced the establishment of a Joint Strategy Board to formalise the longstanding security and intelligence links between the United Kingdom and the United States. The Government has also published a National Security Strategy (NSS) in an effort to ensure that policies and procedures are adequate for today’s security, military and intelligence-led requirements.

Of all the responsibilities of Her Majesty’s Government, none are more pressing or more challenging than those surrounding national security. With the accompanying challenges of political violence, debates surrounding the role of the state and the rights of citizens, budgetary decisions and the difficulties of long-term planning in a short-term political environment, the decisions that are made in this sphere go to the very core of a government’s responsibility to protect the nation and its citizens.

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25 Jul 2012 12:30:05

The Institute of Directors attacks "glacial speed" of Coalition's supply-side reforms

By Tim Montgomerie
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A few reactions to today's disappointing GDP numbers.

First from the Institute of Directors:

“Today’s figures come as a severe blow to business. The Eurozone countries show that we absolutely cannot afford to waver from the deficit reduction programme, but there are several steps the Government must take to boost the economy through supply-side reforms. New infrastructure projects financed by our low interest rates, proper relaxation of planning and employment red tape, and action to lower energy costs for manufacturers would all show Britain means business. Too often, programmes are moving ahead at glacial speed. To help unlock corporate cash piles, Government needs to show decisive leadership and a real sense of purpose.”

A similar message comes from Philip Booth, Editorial Director, at the Institute of Economic Affairs:

“An expanding private sector is the key to economic growth. The government must do more to prevent stagnation of the economy. The four key measures it could take are a serious liberalisation of planning law; deregulation of labour markets; an end to the completely incoherent “green” policies; and radical reform of the welfare state. There are many factors impeding growth that are beyond the government’s control, such as the eurozone crisis. That is not an excuse for inaction in those policy areas where the government can make a difference. Productivity and not unemployment is the main problem. As such, increasing government borrowing from current levels is clearly not the answer. It is time for bold supply side reform.”

The TaxPayers' Alliance reaction focused on the need to help the construction sector:

“Yet another quarter of economic contraction is dismal news for families already struggling to make ends meet. The evidence doesn’t support those blaming Britain’s economic woes on cuts in government spending though, as the Government and other services category actually expanded in the quarter. The most immediate problem is in the ailing construction sector. While public sector capital spending is set to be cut relatively sharply, the real problem is market uncertainty being compounded by new taxes like empty property rates, which massively increases the risk for investments in commercial property, and Section 106, an increasingly punishing tax on new developments. If the Government are serious about making the health of our economy their top priority, then they need to deliver a less onerous tax system, which doesn’t get in the way of the investment that can deliver more jobs and higher wages.”

20 Jul 2012 12:07:29

James Stanfield: What's wrong with the profit motive in education?

James Stanfield is a director at the School of Education at Newcastle University, and also the Editor of "The Profit Motive in Education: Continuing the Revolution, a new publication released this week by the Institute of Economic Affairs.

It is fair to suggest that many politicians are still cautious about combining the profit motive with children’s education.  The suggestion is that educating children should not be for profit, and that because education has always been separate from the forces of the free market, then that's how it should stay.  However, this anti-profit mentality in education raises more questions than it answers.

Firstly, would politicians still believe that educating children should not be for profit if schools run by for-profit companies could be shown to produce much better results at a lower cost – especially for the less-well-off? Or should these schools be permanently excluded irrespective of how they perform?  While many politicians might claim that no such evidence exists, we should also question why they don’t appear to be interested in finding out which type of school performs the best. Are they confident in their belief that all government schools will always outperform all schools run by for-profit companies, both now and at any time in the future?  Or is there some objection in principle to the profit motive, even if the education of children suffers as a result of excluding it?

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