Last week, encouragingly ahead of time, I had my first dose of the Pfizer vaccine – and it had a surprising side-effect.
As I headed out of the vaccination centre, back into the freezing February night, I felt strangely alive, with a new and welcome spring in my step. The vaccine had been a shot in the arm – both literally and psychologically.
Wouldn’t it be great if we could give our ailing economy such an instant boost?
Well, getting the UK back on its financial feet was one of the topics in this week’s Live with Littlewood. Our guests included The Independent’s Chief Political Commentator John Rentoul, talkRadio’s Mike Graham and Dehenna Davison MP, the Conservative member for Bishop Auckland.
In particular, our panel focused on how to help the areas of the UK hardest hit by the financial damage caused by the lockdown. John Rentoul and Mike Graham exchanged heated views on the best way of doing this – but there was broad accord that the best thing the government could do would be to "get out of the way" of British business, by cutting taxes and removing cumbersome regulation. You can watch the debate here.
Also this week, Dehenna Davison wrote in the Northern Echo on the importance of levelling up the UK economy, saying: "The United Kingdom performs at its best when everyone is on even-footing and people are given equal opportunity to access decent jobs, safe and secure housing, and a good education."
Dehenna is one of this year’s judges for our Richard Koch Breakthrough Prize, which is seeking answers to this question:
"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 carries a first prize of £50,000 and the deadline for entries is just over a week away. If you’d like to take part you can find the full details here. But be sure to act fast!
Glynn Brailsford
Managing Director, Institute of Economic Affairs
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iN THE MEDIA
*Footing the bill.. On Tuesday the Institute for Fiscal Studies recommended that Rishi Sunak not raise taxes in the upcoming Spring Budget. Reacting to the news, IEA Director General Mark Littlewood went further, urging the Chancellor to give "British businesses assurances that tax hikes are not inevitable in the longer term". Mark said the UK was at its "taxable limit" and that the public finances would only be repaired by tightening the nation's belt. Read his response in City AM here.
Mark also featured in a Corporation Tax showdown on politics.co.uk. Mark made the case that the tax should not be raised to pay for pandemic spending in a head-to-head with George Dibb from the Institute for Public Policy Research. Watch the exchange here.
*Another failed idea that never dies.. With rumours circulating near-daily about the forthcoming Budget, Annabel Denham, IEA Director of Communications, decided to dismantle claims that a new wealth tax would be a silver bullet for Britain's economic woes. Annabel penned a piece for CapX saying that: "punitive levies on the rich can be counterproductive and encourage avoidance, evasion and capital flight". She cited examples of European countries which had wealth taxes but later abandoned them. Read the full article here.
*Unpopular but useful.. Professor Philip Booth, Senior Academic Fellow at the IEA, has argued that there is a misconception that the financial sector is both useless and dangerous. Despite the claim that the financial sector is not held in high regard in public opinion, Philip says that the sector is highly productive and highly valuable to the UK economy. He invites readers to learn more through Buckingham University’s Vinson Centre for the Public Understanding of Economics and Entrepreneurship, which has now started a YouTube series of “Economics explainers”. Read Philip's full blog post here.
*Socialist fog lifts over Africa.. Africa has been plagued by economic nationalism since decolonisation but this trend may be beginning to end with the establishment of the African Continental Free Trade Area (AfCFTA). Alexander Hammond, Policy Analyst at the IEA, welcomed the new development on the continent in an article for Reason. Alexander said: "While there’s little doubt that socialism will continue to haunt some parts of Africa, it’s clear that, with AfCFTA supported by 54 of the 55 African Union member states, liberal ideas are beginning to gain traction on the world’s poorest continent". Read the full article (behind paywall) here.
*An unnecessary step.. Sir Keir Starmer announced Labour would introduce a national recovery bond earlier this week. In response, Julian Jessop, Economics Fellow at the IEA, questioned what it would achieve in practice, saying: "People can already buy gilts and National Savings, or invest in UK businesses using private vehicles". Read his comments in City AM here and in the Daily Express here.
*Healthcare hypocrisy... Kristian Niemietz, Head of Political Economy at the IEA, has continued his crusade towards NHS reform by calling on the nation to have a "rational discussion" on healthcare in an article for CapX. Kristian pointed out that policymakers have accepted the need to compare the UK’s performance in education or productivity to other nations in order to learn from our mistakes. However, when it comes to the NHS, most people cover their ears to reform or constructive criticism. Read the article here.
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BOUNCING BACK
Great Britain looks well-placed to bounce back from the coronavirus-induced crisis, according to a new new ‘Index of Liberalisation’ by Instituto Bruno Leoni (IBL) and EPICENTER. The report ranks countries in terms of economic liberalisation and provides insight on those with the infrastructure to rebound quickest.
The European country most successful in liberalising its economy was Great Britain, with an average score of 93 (on a scale from 0 to 100). The least open markets were in Finland (55), Croatia, and Slovakia (both with a score of 57).
The Index identifies competition barriers and best economic practices across nine sectors of the economy in the 27 member states of the European Union and the UK. Authored by Carlo Stagnaro, Director of the Digital Economy Observatory at IBL, it finds that the highest scores in the Index are associated with lower entry costs, greater dynamism, and a larger plurality of operators, offers, and products.
Read the paper in full here.
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AN INSTANT HIT!
This week's Live with Littlewood was shorter and punchier in form – but packed with a stellar line-up of guests and thought-provoking debate.
IEA Director General Mark Littlewood was joined by talkRadio presenter Mike Graham, the Independent's Chief Political Commentator John Rentoul, Dehenna Davison MP and the IEA's Head of Political Economy Dr Kristian Niemietz. Mark kicked off the show with a discussion on the NHS and the frenzied response to Kristian's paper Viral Myths, which the IEA published last week, before turning to the government's levelling-up agenda. Dehenna and and Mike later found agreement on the issue of free speech on university campuses. Catch up here.
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IN CASE YOU MISSED IT
The great migration reversal... Many Eastern Europeans left the west in 2020 and returned home. According to some estimates, 1.3m Romanians went back to Romania – equivalent to three times the population of its second-biggest city. Around 500,000 Bulgarians returned to Bulgaria. Is this a permanent trend? What impact will Coronavirus have on immigration?
IEA Head of Media Emily Carver explored these issues with our Head of Political Economy Dr Kristian Nieimietz and Matt Kilcoyne, Deputy Director of the Adam Smith Institute. Emily asked whether we should prioritise free movement from CANZUK countries, and what role immigration will play in our economic recovery. Watch here.
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YOU'RE INVITED
*In Conversation with.. The Rt Hon Lord Hannan of Kingsclere
On Tuesday 23rd February, from 6-7pm, the Institute of Economic Affairs will host a discussion with The Rt Hon Lord Hannan of Kingsclere. IEA Director General Mark Littlewood will chair the discussion.
Dan Hannan was the former Conservative Member of the European Parliament for South East England from 1999 to 2020. He was a prominent Eurosceptic voice during the Brexit debate, being a founder of Vote Leave, and throughout his time as an MEP made the case of the UK leaving the EU. Dan is also one of Britain’s strongest advocates and champions of free trade. He currently serves on the UK Board of Trade and is President of the Initiative for Free Trade think tank. He is an author, columnist, and teaches at the University of Buckingham and the University of Francisco Marroquín.
If you would like to attend this webinar, please register by following the link here or contact us directly at [email protected]
*In Conversation with.. The Rt Hon Kwasi Kwarteng MP
On Tuesday 2nd March, from 6-7pm, The Rt Hon Kwasi Kwarteng MP will sit down with IEA Director General Mark Littlewood for the latest in our In Conversation series, which features senior figures across public life.
Kwasi Kwarteng has been the Member of Parliament for Spelthorne since 2010. In 2018 he joined the government as Parliamentary Under-Secretary of State for Exiting the European Union, before being promoted in 2019 to Minster of State for Business, Energy and Clean Growth. He is also the author of several books and holds a PhD from the University of Cambridge.
If you would like to attend this webinar, set a reminder on YouTube by following the link here or contact us directly at [email protected]
*Upcoming Sixth Form conferences
Throughout February and March, the IEA and the Vinson Centre for the Public Understanding of Economics and Entrepreneurship at the University of Buckingham will be hosting a number of free virtual conferences for Sixth Form students. Find out more here. You can sign up for any of our planned conferences this term and if you are interested in partnering on a future event please drop Brittany a line.
* IIMR Money Webinar series
On Wednesday 24th February, Gabriel Stein of Stein Brothers (UK) will present on 'Macroeconomic forecasting and inflation leading indicators; 2021-22' as part of the Institute of International Monetary Research [at the University of Buckingham] Money Webinar Series. You can register here.
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