Fair Markets Archives - Social Market Foundation. https://www.smf.co.uk/publication_categories/fair-markets/ Britain's leading cross-party think tank Tue, 05 Sep 2023 11:31:03 +0000 en-GB hourly 1 Chewing it over: Public attitudes to alternative proteins and meat reduction https://www.smf.co.uk/publications/politics-of-meat-reduction/ Tue, 05 Sep 2023 10:56:09 +0000 https://www.smf.co.uk/?post_type=publications&p=20332 Whereas vegetarianism and veganism were once relatively fringe, interest in reducing meat consumption – whether on animal welfare, health or environmental grounds – is on the rise. This report, the second of three in a series on the impact of alternative proteins on animals, investigates public attitudes towards meat reduction and the role of alternative proteins in these societal shifts.

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SUMMARY:

  • Although policymakers are reluctant to engage with the idea of meat reduction for fear of sparking a political backlash, the public are much more comfortable with it:
    • 57% of the country believe that most people should eat less meat, while only 16% disagree.
    • 58% of people have taken steps to eliminate or reduce their own meat consumption.
  • Interest in meat reduction is motivated by health, environmental and animal welfare concerns, with the latter being widespread – 61% have some discomfort with the way animals are treated on farms.
  • The public have limited understanding of the extent of animal welfare issues in the UK, but are very supportive of tougher animal welfare standards: 59% endorse a ban on all factory farming, and 66% say they would be willing to pay more for higher-welfare meat.
  • There is less consensus on whether the government should get involved in meat reduction – 43% believe the government should encourage people to eat less meat, but 34% disagree.
    • The public tend to support softer policy interventions like public education and labelling – 74% would support government-mandated animal welfare labels on meat products.
    • While 58% support subsidising plant-based meat alternatives, 69% are opposed to an equivalent meat tax.
  • The public can be divided into four groups based on their attitudes towards animal welfare and meat reduction:
    • 19% are ‘Meat Lovers’ – they tend to view animal products as healthy and environmentally problematic, though with some concerns about welfare;
    • 12% are ‘Animal Lovers’ – 96% of them have made some effort to avoid or limit meat and 58% are vegetarian or vegan;
    • 32% are ‘Animal Sympathisers’ – only 6% are vegetarian or vegan, but 83% have tried to reduce meat consumption and they tend to have pro-animal views;
    • 37% hold no strong views.
  • Although some remain wary, particularly of cultivated meat, the public are open to alternative proteins:
    • While only 26% are satisfied with the existing products on the market, 52% would be open to eating them in future.
    • More people find plant-based meat alternatives convenient and tasty than not, but only 28% find them affordable.
    • Only 39% would try cultivated meat, but Animal Sympathisers were the group most likely to try it, suggesting they appeal to ‘swing’ consumers.

The third and final report in the series will look at how far alternative proteins can promote higher animal welfare and how likely they are to succeed.

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Social tariffs and the cost of living: Assessing the case for social tariffs as a mechanism to ensure access to essentials https://www.smf.co.uk/publications/social-tariffs-and-cost-of-living/ Thu, 17 Aug 2023 04:00:20 +0000 https://www.smf.co.uk/?post_type=publications&p=20273 As the cost of living crisis intensifies, there are growing concerns that the market is unable to provide affordable access to essential goods and services. This interim report investigates the depths of the affordability crisis and the case for social tariffs – discounts on products sold in free markets granted to disadvantaged consumers – as a means of helping those most in need during the current crisis, and beyond.

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We conducted two online focus group sessions with low-income individuals and analysed nationally representative poll of 4,000, to understand households’ experiences with affording essentials amidst the cost-of-living crisis.

KEY FINDINGS

  • The ‘Martin Lewis effect’ – using consumer information to get better deals – has its limits.
    • Some 80% of people reported shopping around for food and groceries but around 1 in 6 of those found it difficult.
    • Those on lower incomes were more likely to say that they almost never found better prices when shopping around.
    • Some focus group participants felt that shopping around was ineffective as businesses were not passing on wholesale cost reductions to consumers.
  • Over half of respondents say they spend more than half of their household income (after housing costs) on essentials, and 29% of those ‘struggling financially’ reported spending over 80% on essentials.
  • The public are supportive of the idea of social tariffs – 59% are in favour of giving discounted rates for essential goods and services to certain households across all demographic groups, with 12% against.
  • However, problems preventing the existing offering of social tariffs living up to their potential include:
    • Awareness: a third of universal credit recipients had not heard of social tariffs for broadband, and around a fifth believed that they were not eligible.
    • Accessibility: two-fifths of those who did not claim a social tariff despite being eligible stated that they did not know how to claim it.
    • Level of support: 52% of people did not believe there is enough support to help struggling households afford essentials.
  • The final stage of this project – commissioned by Citizens Advice – will build on this analysis to design a coherent policy framework to help households to afford their essentials during the crisis and beyond.

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Atlantic Aspirations: What does the US get for being a third richer than the UK? https://www.smf.co.uk/publications/uk-vs-us-living-standards/ Wed, 09 Aug 2023 06:00:37 +0000 https://www.smf.co.uk/?post_type=publications&p=20275 Many have bemoaned the UK’s relatively low income compared to the US. This paper dives into consumption patterns in both countries to see how far this gap translates into a genuinely higher standard of living for Americans, and what the drivers of the difference in living standards are.

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KEY POINTS:

  • The US is around 30% richer than the UK – that means the average American enjoys more of most goods and services than the average Brit.
    • There are some exceptions: British people spend more on clothing and footwear and consume similar levels of recreation, culture and education.
  • Four categories – health, transport, housing, miscellaneous (largely private insurance) – account for 95% of the American advantage over the UK in living standards.
    • Healthcare spending accounts for 12 of the 30 percentage point gap; housing 9 percentage points; transport 4 percentage points.
  • In the case of healthcare and transport, it can be argued that the US wastes its economic advantages with socially inefficient and ineffective spending:
    • Higher healthcare consumption (even accounting for cost differences) might buy more convenience for many, but a range of poor social choices mean that outcomes are on average worse.
    • Similarly, with transport, bigger cars and lack of walkability greatly increase the risk of death or injury on the road.
  • The same cannot be said of housing: British people spend a comparable amount of money, but American dwellings are 60% larger on average.
  • Housing conditions in the UK could be improved by increasing the size and quality of the housing stock, but policymakers must address the UK’s long-running productivity underperformance to truly close the gap in living standards with the US.

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Strong foundations: The value of regenerating social housing – and how we can pay for it https://www.smf.co.uk/publications/social-housing-regeneration/ Fri, 04 Aug 2023 09:00:33 +0000 https://www.smf.co.uk/?post_type=publications&p=20264 The UK’s social housing stock is in need of regeneration, as many homes do not meet the Government’s Decent Homes Standard and fall short of its energy efficiency target of an EPC C rating. This report models the benefits of investment in social housing regeneration, for the wellbeing of inhabitants, the environment and for local economies.

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Social housing has suffered from years of underinvestment. The decline in the real value of social rents has limited the funds available to social housing providers, who have prioritised new construction. Government policy has reinforced this shift, as capital investment in social housing remains below 2009/10 levels, and the support that is available is targeted towards new construction.

The recent announcement from Homes England that funding from the Affordable Homes Programme can be used for regeneration is welcome, but more needs to be done.

The report models the effect of retrofitting all social homes that do not meet the Decent Homes Standard and improving the energy efficiency of EPC D-rated social homes to an EPC C rating. We find that investment in social housing regeneration could generate an additional 20p of value in local economies for every £1 spent.

To improve social housing conditions and take advantage of the wider benefits of social housing regeneration, the report recommends:

  • Making existing funding for social and affordable housing easier to access;
  • Increasing the Affordable Homes Programme by £1.5 billion a year for three years and £2.3 billion thereafter;
  • Introducing a one-off spending programme of £0.75 billion per year for three years to bring all social homes to decent standards.

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Mutual understanding: The modern mutual sector and how to support it https://www.smf.co.uk/publications/modern-mutual-sector-uk/ Thu, 22 Jun 2023 06:00:49 +0000 https://www.smf.co.uk/?post_type=publications&p=20077 Mutuality has a rich history, but it remains largely misunderstood. This report provides a comprehensive overview of the modern mutual sector, exploring its key opportunities and challenges.

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SUMMARY

Due to the benefits and service advantages mutuals can offer, there are significant opportunities for growth in the UK’s mutual sector:

  • Mutuals tend to be more resilient than investor-owned firms, making them a dependable choice in a rapidly changing, uncertain economy.
  • Public perceptions of business are shifting towards sustainability, social responsibility, and ethical sourcing, particularly among younger consumers.
  • The mutual sector has also gained renewed political attention, with politicians from both major parties expressing their support in recent months.

But the sector also faces some key challenges:

  • Relying on member funds rather than investors means mutuals have less scope for generating capital. This makes it harder for them to grow, and in some cases leads to ‘demutualisation’.
  • Due to limited financial resources and smaller scale, mutuals tend be less commercially aggressive and can struggle to compete on all service expectations.
  • The general public often lacks awareness and comprehension of mutuality. Insufficient ‘brand awareness’ poses a significant obstacle to future business success.

There are steps the sector and the government can take to support UK mutuality

  • The sector launches an information campaign for mutuals, enhancing brand recognition. This could be achieved through a mutual kitemark scheme, public information campaigns, or mutuality support networks.
  • The government creates a new capital instrument for mutuals, allowing them to raise more funds and prevent the threat of demutualisation. Australian Mutual Capital Instruments, a form of debt capital that can be converted to equity, is one such option.
  • To create a better policy understanding of mutuals, mutual organisations and the government should collaborate on the creation of comprehensive data that monitors UK mutuality.

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Fair or fowl? The state and future of farmed animal welfare in the UK https://www.smf.co.uk/publications/fair-or-fowl-uk-animal-welfare/ Thu, 25 May 2023 05:30:01 +0000 https://www.smf.co.uk/?post_type=publications&p=19996 The UK is a nation of animal lovers, but are we doing enough to understand and reduce animal suffering everywhere– even farms? In this report, we attempt to identify a working definition and practical measure of animal welfare to understand where we are as a society, and where we might be headed. It is the first of three reports investigating the likelihood and potential for alternative proteins to reducing animal suffering.

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SUMMARY
  • While checklists and assurance schemes for farm animal welfare exist, they do not provide adequate data to develop a national picture:
    • Little data is publicly available and many farms do not participate in the schemes, leaving us with skewed samples.
  • As a result, our analysis of welfare of farmed animals is based on an admittedly crude ‘factory’/‘non-factory’ distinction. For our purposes, we have chosen to equate ‘lower welfare’ with ‘factory farming’.
  • Nevertheless, it is clear that welfare issues among farmed animals is overwhelmingly about chicken:
    • Chickens make up 77% of the UK’s factory farmed animals
    • 95% of all broiler chickens are factory farmed.
  • Things are not getting any better. Chicken production is up by a quarter in the last decade. Though more broiler chickens are reared to higher welfare standards, just over 1% are covered by the RSPCA assured scheme.
  • If things continue on the same track, the situation could get a lot worse.
    • The farm animal population grew by 14% in the last decade, and broiler chickens by a quarter – if that is repeated in the next decade, it would mean at least another 28 million factory farmed animals in the UK.
Where to go from here?
  • If we care about animal welfare, we should collect better data: DEFRA should aim to produce, based on representative samples of farms, estimates of the welfare status of each farmed animal in the UK.
  • Animal welfare improvement is about chickens first and foremost – which could create tensions with environmental meat reduction goals.
  • Alternative proteins could play a role in meeting environmental and animal welfare aims.

The following two reports will look at i) public attitudes to meat substitutes and measures to reduce meat consumption, and ii) how far alternative proteins can promote animal welfare, and how likely they are to succeed.

 

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Giving back: How to foster a stronger and more resilient charity sector https://www.smf.co.uk/publications/giving-back-charity-sector/ Mon, 17 Apr 2023 05:30:12 +0000 https://www.smf.co.uk/?post_type=publications&p=19918 The UK’s charity sector has been resilient to recent shocks, but it is unclear how long this can last. This report suggests ways in which government can protect the sector’s long term viability, by instilling long term planning and sustainable financial models.

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Key points
  • While charities showed great adaptability in the face of the pandemic, the cost of living crisis may prove even more challenging
  • The charity sector has been remarkably resilient to recent shocks, though larger charities have fared better than smaller ones
    • charities with a turnover of over £1 million have seen their budgets grow by 28%, adding over a billion pounds a year, but smaller charities (income under £100,000) have lost 26% of their budgets
  • Since 2010, private donations have offset lost government funding – but it is unclear how long this can last
    • Polling evidence finds that 41% of Brits are donating less than they were three years ago, and majority (80%) blame rising inflation for their decision to donate less

Proposed measures to instill long-term planning and sustainable financial opportunities across the third sector include:

  • Financial support in the form of a new fund providing competitive grants exclusively to micro and small charities, which often provide services in isolated communities.
  • Coordination with the public sector at national, subnational, and local levels to improve service delivery.
  • Proportionate regulation should replace existing rules, which would mean cutting red tape for small charities
  • Recommendations for the charity sector include
    • Investment in an umbrella organisation to help lobby for these policies
    • Partnerships with the private sector should be established or improved to increase private sector donations and help meet the market’s ESG demands

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Insurance and the poverty premium https://www.smf.co.uk/publications/insurance-and-poverty-premium/ Mon, 13 Mar 2023 07:00:44 +0000 https://www.smf.co.uk/?post_type=publications&p=19779 People in poverty regularly face a poverty premium in the insurance market. Not only is that unfair, it also leads to worse outcomes for people, families and society – and it risks trust in the market mechanism. In this report, we conceptualise drivers of the poverty premium and call on the government, the insurance industry, and regulators to establish policies that can protect people in poverty from paying more for coverage.

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We present new evidence on poorer people’s experience of the poverty premium, and their perceptions of insurance:
  • Over half (55%) of people in poverty in are finding it difficult to pay for their insurance amidst the cost of living crisis.
  • People on low incomes can pay £300 more on car insurance than a richer driver insuring a similar car. Additional charges for paying monthly instead of annually could mean an extra £160.
  • Six in ten of those in poverty think that buildings insurance and contents insurance should be classed as an essential.
Understanding the poverty premium – we need to resolve whether:
  • Poorer policyholders are paying more for higher risks associated with their circumstances, i.e. the cash poverty premium at play.

OR

  • Poorer policyholders are paying more, despite being of less or equal risk to richer counterparts, i.e. the value poverty premium at play.

Stakeholders interviewed as part of this research agreed that understanding the balance between these two routes of the poverty premium is essential to better policy.

What can be done?
  • The FCA should investigate the poverty premium in insurance, and should publish results on firm-by-firm basis
  • In parallel, the FCA should conduct a Market Review of single-item insurance cover, to assess for significant consumer detriment
  • The Government should undertake a review of potential interventions, including state-backed insurance products for people on means-tested benefits or low incomes, and introduction of stricter regulation on pricing

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Reducing the burden of government regulation https://www.smf.co.uk/publications/reducing-regulation-burden/ Thu, 09 Mar 2023 06:55:02 +0000 https://www.smf.co.uk/?post_type=publications&p=19780 Government regulations can result in higher consumers prices, make businesses less competitive, and they can prevent innovation and reinforce barriers to entry. In this paper, Harvard Senior Fellow and Regulatory Policy Committee Chair Stephen Gibson, reviews previous efforts to reduce red tape.

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Several approaches to cutting the burden of government regulation have been in place in the UK and across the world. Evaluating them, RPC Chair Stephen Gibson identifies key lessons for policymakers:

  • Clearly signal political support for initiatives to reduce regulation – regulatory burden reduction can often conflict with other political objectives. If burden reduction approaches are to be effective, it is imperative that they have strong political backing.
  • Independently validate regulatory burden calculations – this ensures that the impacts of regulations are properly assessed and improves the quality of regulatory burden calculations.
  • Set the scope of the framework appropriately – ensuring that significant regulations are not excluded from the burden reduction framework.
  • Focus on the small number of regulations that generate most of the regulatory burdens
  • Involve stakeholders – both to identify regulations that might be removed and providing evidence to quantify the burden reduction.

Gibson hopes that the Government will learn the lessons from past failures to improve the UK’s Better Regulation Framework and ensure that it is properly adhered to – as he says: “the potential benefits of getting it right are huge”.

The Retained EU Law Bill will sunset all retained EU legislation that hasn’t been reviewed or retained by December 2023 – this does not provide sufficient time to properly assess the roughly 4,000 pieces of law involved. Instead, Gibson and his co-authors call for the December 2023 deadline to be extended, and for a properly resourced and managed programme to assess inherited EU regulations – so as to not miss a ‘golden opportunity’ to reduce regulatory burdens and improve the regulations.

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