Ratcheting Regulations Compound Cost-of-Living Crisis


Housing and Planning

Kristian Niemietz writes for The Critic

Government and Institutions

Daniel Freeman writes for CapX

Harrison Griffiths writes for Reaction

IEA Communications Officer Harrison Griffiths has written for Reaction discussing new research by IEA Director of Public Policy and Communications Matthew Lesh which argues that red tape has worsened the cost-of-living crisis.

Harrison wrote:

“The research shows a clear divide between the price trajectories of highly regulated sectors and those in competitive markets. In other words, red tape has disproportionately driven the cost-of-living crisis.

“It has been well-established that the prospect of property ownership – or even affordable renting – has been closed off to a generation of young people by the UK’s absurdly burdensome planning laws. The IEA published a paper back in 1988 outlining how the UK’s post-war planning system restricts development and pushes up house prices by empowering and incentivising opponents of local house building. The only thing that has changed since 1988 is that things have gotten much worse. The population has grown and red tape on house building has increased, but the planning system has stymied attempts to increase supply.

“It is more difficult to pinpoint one significant intervention that has driven up costs. Instead, the energy market perfectly showcases the damage of ratcheting intervention over time. Of course, Covid-era supply chain disruption and the Russian invasion of Ukraine caused energy costs to spike. But prices had already risen significantly, more than 30% between 2010 and 2020 (9% in real terms).”

Read Harrison’s full piece here.

You can also read a copy of Graphic Content: How red tape is fuelling the cost of living crisis here.