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Thousands of people read our weekend newsletter. In case you missed it, here’s a recap of our most recent edition – plus details of our special edition of Live with Littlewood, live at 6pm this evening...
* LIVE WITH LITTLEWOOD BREAKTHROUGH PRIZE SPECIAL
* TALKING POINT, BY MARK LITTLEWOOD
* THE COST OF COVID
* TIERS BEFORE CHRISTMAS
* MAKE THE BREAKTHROUGH!
* YOU'RE INVITED

LIVE WITH LITTLEWOOD - BREAKTHROUGH PRIZE SPECIAL

To celebrate the launch of this year's Richard Koch Breakthrough Prize, we're back with a special edition of Live with Littlewood tonight at 6pm, live on our YouTube channel ([link removed]) .

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The Richard Koch Breakthrough Prize is looking for pro-market, pro-enterprise ideas to supercharge growth in "left-behind Britain".

This year's question, developed in collaboration with Dehenna Davison MP, is:

“In the current severe economic climate, what pro-market, pro-enterprise policy would be the best way of supercharging growth, employment and living standards in ‘left behind’ Britain?”

The competition is open to all and carries a first prize of £50,000 for the best policy idea that is both politically plausible and compatible with a free market society.

We'll be discussing this and and more on tonight's show, live here at 6pm ([link removed]) .

On the panel...

Andrew Bowie, Conservative MP for West Aberdeenshire and Kincardine
Brendan Chilton, Ashford Labour Leader
Dehenna Davison, Conservative MP for Bishop Auckland
Nick King, Research Fellow, Centre for Policy Studies
Richard Koch, Author, Businessman and Sponsor of the Breakthrough Prize
Christopher Snowdon, Head of Lifestyle Economics, IEA
Will Tanner, Director, Onward

Find out more about the Richard Koch Breakthrough Prize here - [link removed] ([link removed])

Last week, Rishi Sunak laid bare the dire state of the British economy as he unveiled his one-year Spending Review. The fall in GDP caused by the Covid lockdown is set to wipe about 11 per cent off output. It could be several years before the economy returns to its early 2020 levels. Unsurprisingly, the public finances are in a desperate state. The budget deficit this year alone will be around £400bn – about £20,000 per household.

Hikes in tax rates would inevitably depress any return of meaningful growth and might not do much to close the deficit anyway. We have pretty much reached the taxable limits of the UK economy and, as the Laffer curve suggests, higher rates may even lead to falling revenues. I hosted an expert panel shortly after the Chancellor's speech, which you can catch up on here ([link removed]) .

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What is to be done? As the great Milton Friedman once said, "Only a crisis – actual or perceived –produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable."

The only bone I might pick with Friedman is that think tanks need to do more than simply keep ideas "lying around". They need to keep them fresh, relevant and accessible. The IEA is doing this in spades. Our YouTube channel ([link removed]) has attracted hundreds of thousands of viewers this year, our research programme continues to "think the unthinkable" and our programmes team ensure IEA thinking is taken to academics, teachers and students across the land. As you will see from this newsletter, spokespeople from the Institute are also spreading free market ideas through the mainstream media on a daily basis.

Thanks for all your support. Please continue to help us by sharing IEA material through any platforms and social media networks you can access. Also, if you’re able to make a donation ([link removed]) to help our work, we would be enormously grateful.

Stay safe and stay free. As much as you can.

Mark Littlewood
Director General, Institute of Economic Affairs
THE COST OF COVID

In response to the Chancellor's announcement at the 2020 Spending Review of a partial freeze on public sector pay, IEA Editorial and Research Fellow Professor Len Shackleton said that the decision "makes sense in the current climate". Len questioned whether the government's "retro" job creation schemes would have more than a marginal impact on employment.

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Government intervention, however justified by health concerns, has created the current economic situation, Len added. "The answer is not yet more intervention, but rather to allow businesses maximum freedom to reorient and rebuild".

Meanwhile, IEA Academic and Research Director Professor Syed Kamall responded to the decision to cut back on the foreign aid budget, saying that it should be determined "by affordability and effectiveness rather than by an arbitrary target". Read Syed and Len's comments on the Spending Review in full here ([link removed]) .

Writing for the Daily Mail ([link removed]) last weekend, IEA Head of Lifestyle Economics Christopher Snowdon expressed concern that measures were being imposed without any impact assessments or cost-benefit analyses. He asked: "Where are the 'reasonable worst-case scenarios' for unemployment, bankruptcies, debt, economic growth and mental health?" Read his piece here ([link removed]) .

New figures from HM Revenue and Customs have revealed that 160m discounted meals were consumed in August thanks to the "Eat Out to Help Out" scheme – at a cost of £849m. Responding to the news, IEA Economics Fellow Julian Jessop told The Telegraph ([link removed].) :

"Some of the cash will have subsidised meals that would have been bought anyway. Some of the rest may simply have diverted spending from other activities. We will never know for sure, but it seems unlikely that this was a sensible use of £849m."
TIERS BEFORE CHRISTMAS

This week, MPs voted in favour of the government's new 'three-tier system' of measures. The new rules see almost 99 per cent of England plunged back into Tier 2 or Tier 3 restrictions.

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Writing for The Telegraph ([link removed]) , IEA Head of Lifestyle Economics Christopher Snowdon flagged that the government's cost-benefit analysis, published this week, makes "no serious attempt" to evaluate the costs to well-being or mental health, and no attempt to weight the costs of one course of action against another.

Christopher also highlighted the impact these measures will have on the hospitality sector. Tier 2 restrictions, which include a ban on households mixing inside hospitality venues and the requirement for venues only to serve drinks with a 'substantial meal,' will act as "a death sentence" for countless pubs and restaurants with no possibility of compensation, Christopher said.

You can read Christopher's full comments, which were featured in The Times ([link removed]) , Daily Mail ([link removed]) , Sky News ([link removed]) , as well as a number of regional outlets, here ([link removed]) . He also appeared on RT News and talkRadio to discuss the new measures.

Christopher also updated his briefing paper 'Pubs and Covid-19: Flawed claims and faulty reasoning', which you can read here ([link removed]) .
MAKE THE BREAKTHROUGH!

The IEA’s RICHARD KOCH BREAKTHROUGH PRIZE 20/21 – one of the UK’s major economics prizes – launched this Monday.

The essay competition, which carries a first prize of £50,000 – plus student and highly commended prizes – is seeking answers to one of Britain’s most pressing questions:

“In the current severe economic climate, what pro-market, pro-enterprise policy would be the best way of supercharging growth, employment and living standards in ‘left behind’ Britain?”

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You can find more details at breakthroughprize.org.uk ([link removed]) .

Meanwhile, author and businessman Richard Koch, the kind sponsor of the prize, will be one of the guests in a special Live with Littlewood programme on our YouTube channel ([link removed]) tonight at 6pm, where he’ll be joined by Dehenna Davison MP, one of the judges of this year’s competition.
YOU'RE INVITED

* IEA Book Launch: After Brexit, What Next? Trade, Regulation and Economic Growth

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On Thursday 10th December from 1-2pm, the IEA will host Professor Patrick Minford for the launch of his forthcoming book “After Brexit, What Next? Trade, Regulation and Economic Growth”, co-authored with David Meenagh.

As the UK reaches crunch time on its relationship with the rest of the world, the timely book sets out a comprehensive policy programme, for both ‘microeconomic’ supply-side settings of tax and regulatory systems, and ‘macroeconomic’ policies for fiscal and monetary policies to regulate demand and support the supply-side growth agenda.

IEA Head of Education Dr Stephen Davies will also join the discussion, which will be chaired by IEA Academic and Research Director Professor Syed Kamall.

IEA Book Club Members will have exclusive access to the Zoom Webinar, and therefore the Q&A. For the public, this webinar will be livestreamed on our Youtube channel, which can be found here ([link removed]) .

To find out more about the IEA Book Club, please visit the link here ([link removed]) or contact us at [email protected] (mailto:[email protected])
YOUR CHANCE TO WIN!

*The Future of European Tax Competition Prize

Would you like to win €3000? Then enter The Future of European Tax Essay Competition to be in with the chance of nabbing the grand prize!

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EPICENTER – the IEA’s network of European think tanks – is looking for new, innovative ideas on how tax regimes across Europe can become more competitive and driven by key liberal values of efficiency, neutrality, and fairness. Participants should answer one of the following questions:

1. What post-pandemic tax reforms should be implemented in the EU and across member states to encourage economic growth?

2. What are the building blocks of a successful tax policy that could be adopted by European countries? Explain what taxes should be determined on an EU level and why?

The competition deadline is 18th December and interested participants can register here ([link removed]) .

For more details, head to EPICENTER’s website ([link removed]) . Please address any queries to [email protected] (mailto:[email protected]) .

* The Budget Challenge and Monetary Policy Essay Prize

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The Budget Challenge ([link removed])

Teams of up to four A-level students can submit a Budget with taxation and spending policy for the UK in the coming financial year, as well as a brief analysis of the macroeconomic conditions with a broad policy and strategy response. There is a prize of £1,000 for the winning team and their school.
Deadline: Friday 29^th January 2021; please submit to [email protected] (mailto:[email protected])

Monetary Policy Essay Prize ([link removed])

Will the pandemic be inflationary or disinflationary? The understanding of how central banks make policy decisions is key to analyse a modern economy, particularly since the outbreak of the Global Financial Crisis in 2008/09.

This competition offers a unique opportunity to contribute to the better understanding of money and its role in the making of monetary policy. The Essay Prize is open to current Year 12 and Year 13 students as well as all Undergraduate and Postgraduate Students at UK universities. There are prizes up to £500.
Deadline: Monday 18^th January 2021; please submit to [email protected] (mailto:[email protected])

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