Put aside the gimmicks and get the government out of our lives
5 January 2018
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Economic Theory
Economic Theory
8 January 2018
Lifestyle Economics
15 November 2024
Wednesday’s news that 16,000 first-time buyers have saved thousands of pounds thanks to their exemption from stamp duty is, on the surface, a great thing.
Non-homeowners deserve the opportunity to get on the housing ladder in a reasonable and affordable way, and these 16,000 buyers caught a break they deserved.
And sometime this year, I’m sure we’ll applaud that 26-30 year olds can access cheaper train fare, through the extended young person’s railcard. Hopefully this will enable millennials to put the extra cash towards rent, living costs, or savings.
These are nice, but niche stories about people who lucked out from the chancellor’s Budget in November.
Now what about everyone else?
Most economists and commentators have retrospectively defined 2017 by big political events. The snap election, the rollercoaster Brexit negotiations, and President Donald Trump’s infamous tweets are all contenders to symbolise what was another surprising and shaky year.
But for most people outside the Westminster and Washington bubbles, it’s the smaller political moments, like Philip Hammond’s Budget or the tax reform passed by the US Congress, that will have the greatest impact.
This isn’t just true of 2017. For years now, taxpayers in all different income brackets have looked to these events to find out what parts of their lives will be relieved or made harder by decisions made at the heart of government.
These are not marginal or insignificant issues. Fundamental aspects of our lives, especially surrounding the cost of living, are attached to the puppet strings controlled by government.
The onerous regulations that have piled up in the UK have made it one of the most expensive places in the OECD to access childcare, for example.
Around Budget day, lower and middle-class parents watch to find out if there will be a change to tax credits that allows them to access a few more hours of care each week for their kids.
Energy bills have skyrocketed since the mid-2000s, once liberalisation in the energy market was abandoned. The rules and regulations around energy, particularly as they relate to green energy, have led to a staggering 50 per cent increase in electricity costs in England and Wales since 2001.
The public now waits eagerly to see if Theresa May will cap energy prices, piling distortion on top of distortion to a market that once flourished.
And any plans to liberalise the planning system and build more homes seem to be on full lockdown. Thus, prospective buyers hang off Hammond’s every word, to see if there will be a gimmick thrown their way to make the cost of purchasing a home, or moving, any less obscene.
In 2017, first-time buyers attained the chancellor’s favour. But it is wholly arbitrary and deeply unfair that, while these buyers win, a growing family looking to upsize should lose out.
Could this be why more people, misguidedly, are arguing for a bigger state? If it’s the bureaucrats-on-high who deemed this group or that group worthy of a handout, perhaps more bureaucrats would translate to more handouts, and more relief.
Both history and common sense tell us that bloating the state makes things worse, but one can sympathise with this line of thinking. The state has become so intertwined in our daily lives, actively crippling our ability to act without it.
Prices soar, resources dwindle, and regardless of how hardworking or determined someone is, they will still find themselves at its mercy, crossing their fingers that the benevolent chancellor will look their way this time round.
Will the status quo persist this year? I’m not too hopeful for a break in the cycle, but only time will tell. Let’s cross our fingers, and work to define 2018 by fewer gimmicks, and more civil empowerment.
This article was first published in City AM.
Non-homeowners deserve the opportunity to get on the housing ladder in a reasonable and affordable way, and these 16,000 buyers caught a break they deserved.
And sometime this year, I’m sure we’ll applaud that 26-30 year olds can access cheaper train fare, through the extended young person’s railcard. Hopefully this will enable millennials to put the extra cash towards rent, living costs, or savings.
These are nice, but niche stories about people who lucked out from the chancellor’s Budget in November.
Now what about everyone else?
Most economists and commentators have retrospectively defined 2017 by big political events. The snap election, the rollercoaster Brexit negotiations, and President Donald Trump’s infamous tweets are all contenders to symbolise what was another surprising and shaky year.
But for most people outside the Westminster and Washington bubbles, it’s the smaller political moments, like Philip Hammond’s Budget or the tax reform passed by the US Congress, that will have the greatest impact.
This isn’t just true of 2017. For years now, taxpayers in all different income brackets have looked to these events to find out what parts of their lives will be relieved or made harder by decisions made at the heart of government.
These are not marginal or insignificant issues. Fundamental aspects of our lives, especially surrounding the cost of living, are attached to the puppet strings controlled by government.
The onerous regulations that have piled up in the UK have made it one of the most expensive places in the OECD to access childcare, for example.
Around Budget day, lower and middle-class parents watch to find out if there will be a change to tax credits that allows them to access a few more hours of care each week for their kids.
Energy bills have skyrocketed since the mid-2000s, once liberalisation in the energy market was abandoned. The rules and regulations around energy, particularly as they relate to green energy, have led to a staggering 50 per cent increase in electricity costs in England and Wales since 2001.
The public now waits eagerly to see if Theresa May will cap energy prices, piling distortion on top of distortion to a market that once flourished.
And any plans to liberalise the planning system and build more homes seem to be on full lockdown. Thus, prospective buyers hang off Hammond’s every word, to see if there will be a gimmick thrown their way to make the cost of purchasing a home, or moving, any less obscene.
In 2017, first-time buyers attained the chancellor’s favour. But it is wholly arbitrary and deeply unfair that, while these buyers win, a growing family looking to upsize should lose out.
Could this be why more people, misguidedly, are arguing for a bigger state? If it’s the bureaucrats-on-high who deemed this group or that group worthy of a handout, perhaps more bureaucrats would translate to more handouts, and more relief.
Both history and common sense tell us that bloating the state makes things worse, but one can sympathise with this line of thinking. The state has become so intertwined in our daily lives, actively crippling our ability to act without it.
Prices soar, resources dwindle, and regardless of how hardworking or determined someone is, they will still find themselves at its mercy, crossing their fingers that the benevolent chancellor will look their way this time round.
Will the status quo persist this year? I’m not too hopeful for a break in the cycle, but only time will tell. Let’s cross our fingers, and work to define 2018 by fewer gimmicks, and more civil empowerment.
This article was first published in City AM.
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There is no doubt that the lack of liberalization in childcare, and the energy industry mentioned have had disastrous effects on the UK economy. I also agree that many individuals have become to accustomed to the intervention of the government and the false belief that a bigger state will lead to more handouts for particular groups, but also couldn’t another aspect for instance, one of the fear of big business, may be leading people to support government regulation? To expand on this I would like to use an example in the United States. In the U.S. there is great controversy around the FCC vote to restore the Internet Freedom Order and the power it could give to companies such as Comcast or Time Warner Cable to throttle websites or charge a premium for access. While I would argue liberalizing any industry, including that of internet providers would lead to the increase of competitive firms and better internet rates for the consumers, many see this legislation as a threat to smaller websites and companies who do not have the networking that Comcast or Time Warner Cable do. As written earlier in the article, people seem to be accustomed to their current internet access and do not want their “freedoms” or policies to change. But also, as with your examples of childcare and the energy industries, aren’t people afraid of the formation of monopolies who can charge whatever they want for their service without fear of a decreasing demand for internet access?