Hosepipe bans are not the answer: lessons from electricity markets

Tim Leunig
April 2012

At present, no domestic user is allowed to use a hosepipe when a ban is introduced. Under CentreForum's scheme, commercial users in a drought year will be offered compensation for reducing their consumption. The water saved could then be sold to domestic customers.

"Water companies should not be encouraged to pick on any particular group. Instead we should be offering compensation to industrial and agricultural users who agree to use less water. The water saved could be offered to water meter households who want to use hosepipes. Since households pay more for water than industrial and agricultural users the price difference can be used to pay the compensation."

- Tim Leunig, Chief Economist, CentreForum

Download the report.

Informed decisions: tackling information inequalities in higher education

Dropping the bomb report coverGill Wyness
April 2012

In this report CentreForum sets out five radical ways of getting information on universities into the hands of young people and parents.

The five point plan is intended to boost the government's drive to unlock information about different courses and institutions. From September 2012 the Higher Education Funding Council for England will require all universities and colleges to place standard sets of data, Key Information Sets (KIS), on their websites to help applicants "find quickly and compare easily, the headline items which students consider most important".

CentreForum welcomes this direction of travel but is concerned that the people most likely to look at the KIS will already be the best informed.

The report urges the government to do more to ensure that information reaches those from non traditional backgrounds, who are generally less aware of the costs, experience and long term benefits of going to university..

Download the report.

Coverage in Times Higher and the Guardian

Guarding the guardians: towards an independent, accountable and diverse senior judiciary

Guarding the guardians coverAlan Paterson and Chris Paterson
March 2012

This report argues that senior judicial appointments including those to the Supreme Court are in need of significant reform.

The emergence of a more powerful judicial branch of government provides an important check on executive power.  However, it must be buttressed by a constitutionally appropriate appointments system.

A typical Supreme Court appointments process involves assessment of candidates by up to 26 individuals.  21 of these are themselves judges.  Yet in a democracy, no branch of government should have the potential to be effectively self-perpetuating.

The Supreme Court is currently composed of 11 white men and one white woman.  The 8 new appointments to the Court have all been white men.  The most recent appointment process involved assessment of candidates by 24 white men and one white woman.  As the Chief Justice of Canada puts it, "Psychologists tell us that human beings have a tendency to see merit only in those who exhibit the same qualities that they possess".

Report co-author, Professor Alan Paterson OBE of the Centre for Professional Legal Studies, said:

"It is no reflection on the high calibre individuals appointed under this system to say that it is manifestly untenable as a system.  Democratic legitimacy requires that the appointment process contain a better balance between judges, laypersons and politicians."    

Report co-author Chris Paterson said:

"A strong senior judiciary is essential to the protection of individual rights, but it must be supported by an appropriate appointments system.  Diversity, as a basic component of the Supreme Court’s ability to deliver justice in modern society, must be integral to this."

Download the full report.

Coverage in the Times, Financial Times and Guardian

Taxing decisions: the debate between tax credits and personal tax allowances

Dropping the bomb report coverThomas Brooks with Chris Nicholson and Howard Reed (Landman Economics)
March 2012

The government has committed itself to increasing personal tax allowances to £10,000 by 2015. At a time when low to middle earning households are being squeezed, this policy has been promoted as progressive - supporting "millions" not "millionaires". But are tax allowances or tax credits the best way to support working families? This report offers detailed analysis of both approaches.

It begins by outlining amendments to the tax and benefit system which would raise almost £12 billion in a progressive manner. Tax reliefs for the most affluent should be cut, and emphasis is placed on taxation of unproductive wealth rather than income. The revenue raised can be spent on our separate personal tax allowance and tax credit proposals.

CentreForum offers personal tax allowance proposals to increase the personal allowances for both income tax and national insurance to £10,000 alongside a reduction in the higher rate threshold to ensure that higher rate taxpayers do not benefit.

Landman Economics then propose immediate amendments to the Working Tax Credit (WTC) and Child Tax Credit (CTC) systems, to increase the child element of CTC and the basic element and childcare element of WTC.

Download the report.

Employee ownership: unlocking growth in the UK economy

Dropping the bomb report coverPatrick Briône and Chris Nicholson
March 2012

In this report, CentreForum shows how greater employee ownership and share ownership boosts business performance, reduces inequality within firms, and increases innovation, long term thinking and employee well being. CentreForum believes this should be the at heart of the coalition government's growth strategy.

The report comes amid growing political interest in measures to tackle 'crony capitalism'. David Cameron, Nick Clegg and Ed Miliband have all said they want to encourage 'responsible capitalism' and curb 'fat cat' pay.

In his 'John Lewis economy' speech to CentreForum, Nick Clegg went a step further by promoting employee ownership. The deputy prime minister said that giving individuals "a real stake in their firms" not only discourages short termism and unfair bonuses but is also "a hugely underused tool in unlocking growth".

CentreForum's proposals set out in the report include giving a single minister responsibility for promoting employee ownership and share ownership, and giving employees of firms that employ over 250 people a 'right to request' shares.

Download the report.

Click here to read the response of the Employee Ownership Association.

See also: 'Employee empowerment: towards greater workplace democracy' (January 2012)

Child Benefit: what to do about higher rate taxpayers

Tim Leunig
March 2012

The government has announced that child benefit will be taken away from higher rate taxpayers in order to show that (pensioners excepted) we really are "all in this together".

But linking child benefit to the income of the main earner, rather than to household income, has odd effects. A family with two earners, each just below the higher rate threshold, will not lose out. In contrast a family with one earner just above the threshold will lose out, even though the family is not as well off. The sums involved are large: £2,500 a year for a family with three children.  

In this short report, CentreForum's chief economist Tim Leunig looks at how best to address the dilemma over higher rate taxpayers.

Download the report.

Dropping the bomb: a post Trident future


Dropping the bomb report coverToby Fenwick
March 2012

In this report CentreForum urges the government to cancel its nuclear deterrent programme and use the savings to shore up conventional military capabilities.

The report warns that Britain is sleepwalking into replacing its Trident missiles at a capital cost of over £25 billion. It points out that this is happening at a time of deep cuts to the UK's conventional forces, two decades after the collapse of the Soviet threat that Trident was designed to deter.

CentreForum proposes that Britain should retain the capability to design and build nuclear weapons if they were required in future. It also recommends that the expertise at AWE Aldermaston in Berkshire could be used to develop verification technologies, which are necessary for global nuclear disarmament.

Download the full report. 

Select media coverage: BBC News Online, BBC R4 Today, Guardian, ConservativeHome

"A must read contribution to the debate on whether there are alternatives to Trident. I have long argued that  more serious thought needs to be given to a long warning 'just-in-case' option, and this paper should help provoke such a debate."

- Professor Malcolm Chalmers, Director, UK Defence Policy, RUSI

The Work Programme: keep calm and carry on

Chris Nicholson
February 2012

In this short research note CentreForum urges the government to stand firm on its flagship scheme to get unemployed people back into work.

Since its launch in June 2011 the Work Programme has faced considerable criticism; most recently from the National Audit Office which said that the government had over estimated the likely performance of the scheme.

CentreForum acknowledges that in certain areas of the Work Programme a different approach would have been beneficial. But its report warns that changing course would undermine efforts to tackle long term unemployment, and threaten future government contracting for services.

Download the full report.

Tier 4 tears: how government student visa controls are destroying the private HE sector

Chris Nicholson
January 2012

In this report, CentreForum calls for the reversal of student visa controls which prohibit international students enrolled on HE courses at private colleges from working part time to support their studies.

Since these controls were introduced in 2011, enrolment numbers are estimated to have dropped by around 70 percent. One private institution, Cavendish College London, has already closed, while others face being taken over by public universities.

CentreForum had previously warned government about the adverse impact of the Tier 4 student visa reforms. It is now concerned that the impact has been "swift and probably even more devastating than was predicted."

Download the full report.

See earlier CentreForum publications 'Tier 4 Fears: why government student visa proposals are unfair' (June 2011) and 'Pathway to prosperity: how to make student immigration work for universities and the economy' (February 2011)

Employee empowerment: towards greater workplace democracy

Patrick Briône and Chris Nicholson
January 2012

There is strong evidence that giving employees more of a voice in the firm that employs them is of benefit to both the firm and the employees. Just as important is the democratic case: employees have a fundamental right to be involved in key decisions that affect their lives.

Boosting employee participation should therefore be an integral part of the coalition's growth strategy of supply-side reforms.

In this report, CentreForum sets out a package of measures that the government should consider to promote employee empowerment and workplace democracy.

Download the full report.

"Increased employee participation in how companies are run has been a longstanding Liberal Democrat principle, and CentreForum offers some radical proposals for how this can be promoted. Their paper deserves serious consideration."

- Rt Hon Nick Clegg MP, Deputy Prime Minister

"There is strong evidence that the combination of employee empowerment and employee share ownership can help boost company performance. The CentreForum paper makes a powerful case for why this should be embraced as part of the coalition government's growth strategy of long term suppy-side reforms."

- Ed Davey MP, Minister of State for Employment Relations, Consumer and Postal Affairs

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CentreForum We could not agree more with the FT leader today ft.com/cms/s/0/8a877f… (£) Overseas students should be excluded from the net migration target

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CentreForum @benphillips1989 Chatham House Rule, so no video/audio - sorry. For further details, please email tom.frostick@centreforum.org

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