This week's King's Speech was an opportunity to reset the government's direction. But no such reset was forthcoming.

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The King’s Speech was, for the most part, yet another opportunity lost. The government chose to stay the course rather than putting Britain back on the path to prosperity. Not only was it bland and lacking in substance, but many signature policies were more fiddly interventions than inspiring vision.

The government is banning cigarettes for people born after 2009 and introducing investment-repelling regulatory frameworks for rentals, football, and big tech. As our Director General Mark Littlewood argued this week, without a fundamental shift in economic thinking, we risk losing more years of economic growth and further cementing our status as a declining economy.
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IEA: King’s Speech ‘heavy on intervention, light on liberalisation’ ([link removed])

Mark Littlewood, The Daily Mail ([link removed]) , ConservativeHome ([link removed]) & GB News ([link removed])

More of the same… The government failed to seize an opportunity to reset the agenda.

But lurking beneath the surface was one positive, albeit long overdue, change in policy outlook. The government announced tougher sentences for the most violent offenders, including whole life sentences for murders committed with sadistic motives and longer sentences for grooming gang members. Sunak may be driven by a ‘tough on crime’ electoral strategy, nevertheless, measures like this will actually benefit the public.

Empirical research on violence and reoffending consistently reaffirms the ‘Iron Law of Crime’: that a tiny minority of habitual offenders commit the vast majority of violent crimes. Between 1973 and 2004, 63 per cent of violent crimes in Sweden were committed by one per cent of the population. A clear majority of convictions in the United States are handed down to those with criminal records. A follow up study of murderers released from prison in Sweden found that they were 155x as likely to commit murder than the general population. These are just a few examples.

Protection, containment, and restitution – a liberal vision of criminal justice ([link removed])

Harrison Griffiths, IEA Blog ([link removed])

Protecting freedom… There is no contradiction between keeping the public safe and upholding liberal values.
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The evidence that prison acts as a deterrent to crime or is particularly successful in rehabilitating violent criminals ranges from weak to mixed. But by containing violent criminals, we incapacitate them and ensure that they will not victimise any more innocent individuals.

By contrast, there is evidence that overcriminalisation – sending nonviolent offenders to jail for short periods of time – encourages further reoffending and hurts rehabilitation, while also costing taxpayers dearly. Therefore it is welcome that the government announced a new presumption that individuals sentenced for less than 12 months of jail time should be suspended and more use of home detention.

The criminal justice system still struggles from many faults, including drug prohibition, censorship of speech, and lack of adequate due process for defendants. But that shouldn’t stop us from supporting measures that incapacitate those whose violent acts warrant state intervention while minimising unnecessary prison sentences. At least, the King’s Speech was a step in the right direction.

Harrison Griffiths

IEA Communications Officer
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** Has Brexit Really Harmed UK Trade? Countering the Office for Budget Responsibility’s claims ([link removed])
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This week, the IEA published Has Brexit Really Harmed UK Trade? Countering the Office for Budget Responsibility’s claims ([link removed]) , a new paper by trade economist Catherine McBride, which argues that trade data does not support forecasts by the likes of the OBR, that Brexit would have a significant and negative impact on the UK’s trade with the EU.
* Trade continued to grow between 2016 and the conclusion of the Brexit transition in 2020, indicating that Brexit uncertainty did not reduce UK-EU exchange.
* UK goods exports rose by 13.5 per cent to EU countries and 14.3 per cent to non-EU countries between 2019 and 2022, before and after Brexit. This indicates no impact of Brexit on goods trade.
* UK services exports rose by 14.8 per cent to EU countries and 22.1 per cent to non-EU countries over the same period. Varying demand levels for different products across countries, rather than any consistent Brexit impact, explains this finding.
* UK trade patterns compared to other G7 countries have not changed since Brexit.
* Business and Trade Secretary The Rt Hon Kemi Badenoch MP will today say “As today’s excellent IEA paper, written by the economist Catherine McBride, shows – contrary to some media reports and many pre-Brexit establishment voices, the data says Brexit has not had a major impact on UK–EU trade. UK trade with EU countries has broadly moved in line with UK trade with non-EU countries,” at the launch of International Trade Week.

Read the paper ([link removed])
Press release ([link removed])

The paper was endorsed by Secretary of State for Business and Trade Kemi Badenoch in a speech at the International Trade Week launch event, “Boost Your Global Success” in London.
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OBR forecasts of post-Brexit trade slump 'just not true' ([link removed])

The Daily Telegraph ([link removed]) , The Daily Mail ([link removed]) , ([link removed]) The Sun ([link removed]) , City AM ([link removed]) , GB News ([link removed]) & Guido Fawkes ([link removed])

Faulty forecasts... The Office for Budget Responsibility' predicted that Brexit would have a catastrophic impact on trade. But if that were true, we would expect to see divergence between UK-EU trade patterns and UK-non EU trade patterns.

“When the facts change, I change my mind!”

Catherine McBride, The Daily Express

Across the board... Trade across the world was significantly disrupted by the Covid-19 pandemic. But however you measure it, the UK’s trade with EU and non-EU countries trended similarly.
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Has Brexit Damaged UK Trade? | IEA Podcast | IEA Podcast ([link removed])

Director of Public Policy and Communications Matthew Lesh & Catherine McBride, IEA YouTube ([link removed])

Brexit Leaves UK Trade Unscathed ([link removed])

Catherine outlines the key conclusions of her paper in our latest explainer video.
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IEA Latest.
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The obscure statistic warning of a thumping recession for Britain ([link removed])

Economics Fellow Julian Jessop, The Daily Telegraph ([link removed])

Eyes on the prize… The Bank of England’s failure to keep a close eye on money supply growth was one of the key reasons for its failure to control recent inflation. Deflation and recession may await if they fail to learn from their mistakes.
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The evils of Panglossian prohibitionism ([link removed])

Head of Lifestyle Economics Christopher Snowdon, The Critic ([link removed])

Irrational optimism… Prohibition is a gift to the black market, a cost that seems lost on the government’s cigarette ban consultation.
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Higher interest rates are working, but beware the risks of overkill ([link removed])

Shadow Monetary Policy Committee co-chair Trevor Williams, The Times ([link removed])

Recession risk… By leaving interest rates unchanged at 5.25 per cent last week, the Bank of England is running the risk of deflation and recession.
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What Drives Tanzania's Economic Freedom? | Liberty Sparks | Meet the IATP Partners ([link removed])

Liberty Sparks Founder Evans Exaud, IEA YouTube ([link removed])

New frontiers… After welcoming our partners from the Initiative for African Trade and Prosperity (IATP) to 2 Lord North Street last week, we have started a new series taking an in-depth look at their work to build free societies across Africa.
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Office conversion: an opportunity to boost the supply of urban residential housing ([link removed])

David Starkie, I ([link removed]) EA Blog ([link removed])

Creative destruction… Converting once-commercial buildings into homes could help lower house prices in urban and rural areas.
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Vaping tax could stop children getting hooked ([link removed])

Head of Lifestyle Economics Christopher Snowdon, The Daily Express ([link removed])

Pick a lane… If the government wants to make Britain smoke-free, it probably shouldn’t implement pro-smoking policies.
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'Sick man of Europe' Germany and Eurozone neighbours being 'tipped into recession' ([link removed])

Julian Jessop, The Daily Express ([link removed])

The tightening contagion… The UK is not the only major economy to be showing signs of monetary overcorrection. Interest rate hikes in the Euro area have slowed German manufacturing and may risk pushing the EU’s largest economy into recession.

IEA Insider.


** Headington sixth form conference
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This week, the IEA and the Vinson Centre hosted a sixth form conference at Headington College, Oxford, attended by 108 students from four schools. Shadow Monetary Policy Committee member Dr Juan Casteneda spoke to students about the inflation crisis, while Research Assistant Daniel Freeman and Communications Officer Reem Ibrahim spoke about the Soviet Transition to a Market Economy, and the Gender Pay Gap, respectively.
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More to come… The Vinson Centre’s educational opportunities come thick and fast, with their next seminar on the classical political economy ([link removed]) tradition coming later this month. Dr Rogerio Arthmar will lead the seminar on Swiss historian, Jean Charles Léonard de Sismondi’s approach to economic and political analysis.

Date: Wednesday, 22nd November

Time: 16.30 – 18.30

Location: Enterprise Hub, Vinson Building (first floor), University of Buckingham.


** Tech Turmoil: Does the Digital Markets Bill threaten Britain’s economy?
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mailto:[email protected]?subject=Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F&body=Hello%2C%20I%20would%20like%20to%20attend%20'Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F'%20on%20Monday%2C%2027%20November.

Later this month, the IEA is hosting a panel to discuss the government’s Digital Markets and Competition Bill, building on the recent publication of Digital Overload: How the Digital Markets, Competition and Consumers Bill’s sweeping new powers threaten Britain’s economy ([link removed]) .

Panellists
* Matthew Lesh (Chair)
* Bim Afolami (MP for Hitchen & Harpenden)
* Stephen Hammond (MP for Wimbledon)
* Matt Sinclair (Senior Director at the Computer & Communications Industry Association)
* Verity Egerton-Doyle (Antitrust & Foreign Investment Counsel at Linklaters)

Date: Monday, 27th November

Time: 17.30 – 19.30

Location: 2 Lord North Street, SW1P 3LB

RSVP: Email [email protected] to request a space at the event (mailto:[email protected]?subject=Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F&body=Hello%2C%20I%20would%20like%20to%20attend%20'Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F'%20on%20Monday%2C%2027%20November.)


** IEA at the SFL Regional Conference
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Our Head of International Outreach, Adam Bartha, was talking to 200 students in Prague at Students for Liberty’s Regional Conference about the need to find new allies for classical liberals. In the era of political realignment with the fusionism between classical liberals and conservatives becoming very weak, Adam argued that free marketeers should embrace new political and civil society alliances on a case-by-case basis.

Adam discussed how liberals should approach the new political alignment as discussed in The Economics and Politics of Brexit: The Realignment of British Public Life ([link removed]) by IEA Senior Education Fellow Steve Davies.

Freedom: Up In Smoke? ([link removed])

With the government moving forward with its cigarette sale prohibition, Reem Ibrahim will chair Forest panel on the ‘Nanny State of the Nation’ alongside Baroness Fox, Henry Hill (ConservativeHome), Ella Whelan (Academy of Ideas), and Simon Clark (Forest).

Date: Monday 20th November

Time: 18:15 - 21:00

Location: 6 Old Queen Street London SW1H 9HP United Kingdom

RSVP: email [email protected] or visit eventbrite ([link removed]) to reserve a place.
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