May embraces free market rhetoric but fails to back it up with policies
4 October 2017
SUGGESTED
Housing and Planning
Reaction to Chancellor Philip Hammond's conference speech
2 October 2017
Energy and Environment
Reaction to the announcement on proposed cap on energy prices
12 October 2017
Government and Institutions
Reaction to Theresa May's speech
Commenting on the Prime Minister’s speech at Conservative Party Conference, Mark Littlewood, Director General at the Institute of Economic Affairs, said:
“The Prime Minister’s encouraging rhetoric was followed up with the wrong policies. Saying that house prices necessitate government building is as wrongheaded as saying increased food prices require new state-run farms. It is government policies themselves, which caused the shortage of supply in the first place.
“The UK has more social housing – 19% of the stock – than France, Germany and Spain and the highest proportion in Europe of people living in reduced price tenure. The state is not better than building houses than the private sector. It shouldn’t be building houses, it should be allowing the enterprising sector to do so.
“Similarly, fixing energy prices is another example of where Theresa May claims to be free market in one sentence and then announces a state interventionist policy in the next. Introducing a cap is another example of poorly justified political meddling that will not guarantee lower prices for consumers. In fact, the move may end up backfiring with companies likely to raise prices before the cap is introduced.
“So, we have heard from leading Conservatives this week how free market capitalism is so beneficial. But we haven’t heard a single coherent policy that would make the UK a more free market economy. Rather we’ve had a string of announcements about how the Tories wish to place greater power in the hands of the state. May’s comments about being a supporter of free markets should at best be taken with a pinch of salt, but at worse look to be untrue.”
For media enquiries please contact Stephanie Lis, Director of Communications: slis@iea.org.uk or 0207 799 8909 or 07766 221 268.
For more on housing policy, see IEA research here.
Further IEA Reading: Abundance of land, shortage of housing
For more on the energy market and price controls, see IEA research here and here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.
The IEA is a registered educational charity and independent of all political parties.
“The Prime Minister’s encouraging rhetoric was followed up with the wrong policies. Saying that house prices necessitate government building is as wrongheaded as saying increased food prices require new state-run farms. It is government policies themselves, which caused the shortage of supply in the first place.
“The UK has more social housing – 19% of the stock – than France, Germany and Spain and the highest proportion in Europe of people living in reduced price tenure. The state is not better than building houses than the private sector. It shouldn’t be building houses, it should be allowing the enterprising sector to do so.
“Similarly, fixing energy prices is another example of where Theresa May claims to be free market in one sentence and then announces a state interventionist policy in the next. Introducing a cap is another example of poorly justified political meddling that will not guarantee lower prices for consumers. In fact, the move may end up backfiring with companies likely to raise prices before the cap is introduced.
“So, we have heard from leading Conservatives this week how free market capitalism is so beneficial. But we haven’t heard a single coherent policy that would make the UK a more free market economy. Rather we’ve had a string of announcements about how the Tories wish to place greater power in the hands of the state. May’s comments about being a supporter of free markets should at best be taken with a pinch of salt, but at worse look to be untrue.”
Notes to editors
For media enquiries please contact Stephanie Lis, Director of Communications: slis@iea.org.uk or 0207 799 8909 or 07766 221 268.
For more on housing policy, see IEA research here.
Further IEA Reading: Abundance of land, shortage of housing
For more on the energy market and price controls, see IEA research here and here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.
The IEA is a registered educational charity and independent of all political parties.
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