Redefining the poverty debate : why a war on markets is no substitute for a war on poverty

The political debate about poverty is entirely dominated by groups calling for more income transfers to the poor. However, now that the scope of our welfare state has reached - or even surpassed - Scandinavian levels, surely this approach has run its course. Award-winning author Kristian Niemietz lays out another approach to dealing with the problem of poverty - one that focuses on addressing the problems caused by government interventions that raise the cost of living. These interventions are enormous in their effect on the poor. As the author points out, the poverty lobbies are more or less silent on these crucial matters. This has not always been the case. In the past, free-trade movements, for example, had been seen as pro-poor movements. Alongside radical market reforms, the author proposes wide-ranging welfare reform to encourage work and remove the penalties on family formation. This would include a form of negative income tax system and the localisation of welfare decisions. The author 8 Acknowledgements 9 Foreword by Gisela Stuart 11 Summary 15 List of tables and figures 18 1 One-club golfers – a critique of the poverty industry 25 Anti-poverty lobbies, then and now 25 Wrong priorities in the poverty debate, and why it matters 30 The opposition to low-paid employment 35 The state-centric poverty alleviation strategy: a fair-weather approach 41 2 A new anti-poverty approach 50 Taking on the critics 53 3 Housing 56 House prices on the rise 56 Why are housing costs a problem? 59 What is going wrong? 74 What should be done? 86 childcare 91 Childcare costs on the rise 91 Why does it matter? 93 What is going wrong? 97 What should be done? 99 5 Food 102 Food prices on the rise 102 Why is it a problem? 103 What is going wrong? 104 What should be done? 110 6 energy 117 Energy prices on the rise 117 Why is it a problem? 118 What is going wrong? 124 What should be done? 132 Summary 139 7 Regressive taxation 140 8 Work – supply and demand 146 Work is better than its reputation 146 Workless households: scale and significance 151 Single parenthood: a digression 156 Labour demand 163 Implications for policy 172 9 Welfare 174 Polarised work incentives, polarised employment patterns 175 From resentment to reciprocity 184 A denationalisation of welfare 192 10 conclusions 205 Real incomes are determined by prices and incomes 207 Pro-poor policy – the impact of market reforms 209 Who will benefit? 215 Pro-poor policy – the need for welfare reform 217 References 225 About the IEA 250 Discussions on the outcome of a potential referendum on Britain's membership of the EU have been characterised by political grandstanding, at the expense of serious economic analysis. With Brexit now a real possibility in the next Parliament, the IEA today releases a report outlining four different options for the UK in the event of a vote to leave the EU, all of which take into account both economic challenges and possibilities. In Brexit: Directions for Britain Outside the EU, various contributors outline several of possible approaches, ranging from a proposal that Britain should promote free trade and openness through the unilateral removal of trade barriers, to maintaining formal relationships with European countries through the European Free Trade Association (EFTA) and/or the European Economic Area (EEA). Other proposals offer a view that the UK should seek to form economic and political alliances with countries outside of Europe, such as those in the Commonwealth. The political debate about poverty is entirely dominated by groups calling for more income transfers to the poor, but author Kristian Niemietz lays out another approach to dealing with the problem of povertyone that focuses on addressing the problems caused by government interventions that raise the cost of living. These interventions are enormous in their effect on the poor. As Niemietz points out, the poverty lobbies are more or less silent on these crucial matters, but this has not always been the case. In the past, free-trade movements, for example, had been seen as pro-poor movements. Alongside radical market reforms, the Niemietz proposes wide-ranging welfare reform to encourage work and remove the penalties on family formation. This would include a form of negative income tax system and the localization of welfare decisions. The authors; Foreword; Acknowledgement; Editorial note; Tables, figures and boxes; 1A blueprint for Britain: openness not isolation, ; Iain Mansfield; Framing the endeavour; External negotiations; Box 1Article 50 of the Lisbon Treaty; Table 1Comparative positions of Norway, Switzerland and Turkey and proposed UK position after exit; Box 2What is the Single Market?; Table 2Free trade agreements of Switzerland, Norway, New Zealand and the EU with non-EU G20 countries; Figure 1Percentage of UK exports to the EU and ROW; Table 3The UK's top ten non-EU, non-EFTA export destinations (2012) Table 8UK trade export growth (goods and services), 2002-12Appendix B: Analysis of outcomes; Table 9FTA priority conclusions; Table 10Cost of UK exit as calculated by comparison with the TTIP; Table 11UK benefit or loss from selected FTAs; Table 12Impact on GDP of the best-case, most likely and worst-case scenarios; References; 2Britain's post-EU future and the development of EFTA plus; Robert Oulds; Introduction; The EU and 'free' trade; Aims and objectives: the desired outcomes of negotiations with the EU; Figure 3UK trade balance with EU in goods and in services Table 4Initial priority order for non-EU, non-EFTA FTA negotiationsTable 5Likely topics for negotiation in a UK exit agreement; Internal preparations; Box 3Regulations and directives; Box 4Super-affirmative procedure; Box 5Excerpt from a summary of EU driving regulations for vehicles over 3.5 tonnes; Figure 2How does the UK spend the money it receives from the EU?; Outcomes; Table 6Impact on GDP of the best-case, most likely and worst-case scenarios; Conclusion; Appendix A: Analysis of trade policy options; Table 7UK exports (goods and services) 2002-12 (£bn) Negotiations under the Article 50: the EU's prescribed method of withdrawalEU law post-Brexit; British post-Brexit influence in the EU; Post-EU trade and migration policy; Table 13Foreign direct investment flows per capita per year (US); Figure 4FDI in Iceland, Switzerland, Norway in comparison with the UK (1983-2012), Central Bank of Iceland (1989-2012); The process of rejoining EFTA; Reforming the EEA and EFTA: re-establishing the original purpose of the EEA; Conclusion; Appendix A. The alternatives; Appendix B. Additional benefits of EFTA/EEA membership Appendix C. Problems with the Swiss optionReferences; 3Old links, new ties - global free trade through the Anglosphere and Commonwealth; Ralph Buckle and Tim Hewish; Introduction; Why the Commonwealth and Anglosphere nations?; Current economic trends; Figure 5Commonwealth and Europe share of real world GDP (PPP, bn) 1970-2013; Table 14World Bank's Ease of Doing Business rankings; Table 15World Bank's 'Starting a Business' rankings; Table 16World Bank's 'protecting investors' rankings; The Internet; Table 17The Corruption Perception Index; Box 6New Zealand "In the past intellectual movements promoting free trade in particular and a free economy more generally were regarded as having a pro-poor agenda. The current poverty lobby, however, is focused entirely on government benefits as the solution to poverty and very rarely addresses government interventions that raise living costs."--Executive summary During 2013-14, the IEA ran a competition ('BREXIT') to find the best blueprint for Britain outside the EU, with the objective of securing a free and prosperous economy should it choose to leave. This book brings together Iain Mansfield's winning submission with edited versions of three other contributions Should Britain join an enlarged NAFTA?