Once heralded as David Cameron's 'favourite think-tank', Policy Exchange is a shadow of its former self, argues William Walter.  

Setup in 2002 by a group that included the likes of Nick Boles, Michael Gove and Francis Maude, Policy Exchange quickly positioned itself as a thought leader for the centre-right. The think-tank brought fresh thinking and a radical reform agenda to a host of domestic policy areas. Free schools, the pupil premium, police and crime commissioners, even the Office for Budget Responsibility, were all conceived from research and recommendations generated by Policy Exchange.

It won plaudits from heavyweight thinkers from across the political divide. In 2010 its report into unaffordable housing in the UK was awarded publication of the year by Prospect Magazine and was described by Lord Adonis as 'hugely challenging – and perhaps – paradigm-shifting in its conclusions'.

Commenting on the think-tank's influence on the Coalition Government, Lord Carlile remarked: 'Policy Exchange has influenced the Coalition Government in many areas. The thoroughness of their research, the intellectual brilliance of their analysis, and the broad range of contributors makes them a 'must read' for politicians of all parties and their advisers. They are dynamic, challenging and valued'.

Perhaps the most famous accolade heaped on the think-tank came in 2006 when the New Statesman described it as David Cameron's 'favourite think-tank'.

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Ever since its foundation, common themes running through the think-tank's work have been the use of localism, free market, and volunteer-led solutions to public policy challenges. It is a commitment to these three core beliefs that has served it so well. But new leadership, and the ushering in of a new approach have resulted in a worrying drift away from these values to a more interventionist approach.

Earlier this year the think-tank published a report setting out measures to tackle the country's rising levels of obesity, particularly among children. It advocated the introduction of a sugary drinks tax, arguing that while such a levy is 'not a magic bullet', it is 'on balance a sensible intervention to help prevent the rise in obesity, especially among children'.  The recommendation was rightly criticised by other free-market think-tanks, such as the Institute of Economic Affairs, whose Head of Lifestyle Economics, Christopher Snowden, slammed the regressive tax proposal, arguing that: 'Putting a tax on sugary drinks won't make us thinner, it will make us poorer'.

Then, last month, the think-tank trained its sights on the London taxi industry. It published a report calling on the Mayor of London to impose a levy on Uber, while proposing the introduction of punitive working restrictions for Uber drivers themselves. But far from an exercise in altruism directed at Uber drivers, the recommendations seem principally aimed at preserving the city's 'iconic' black cab industry. So much for a commitment to free-enterprise and consumers making decisions for themselves.

This deviation from the free-market thinking that has served the think-tank so well for so long is worrying. If the Policy Exchange is to once again find itself Downing Street's favoured think-tank, it would do well to get back on course.

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