From Institute of Economic Affairs <[email protected]>
Subject Back with a bang
Date September 26, 2021 8:00 AM
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Regulatory reform is high on the government’s agenda at the moment. Following the report of the Prime Minister’s Taskforce on Innovation, Growth and Regulatory Reform (TIGRR), the Department for Business, Energy and Industrial Strategy has opened a consultation on reforms to the Better Regulation Framework, and Lord Frost has announced a full review of all of the EU laws and regulations that we carried into our domestic law when we left the bloc in 2019.

Lord Frost’s programme is in line with the submission ([link removed]) I made to the TIGRR, recommending a systematic and qualitative review of all retained EU law. No doubt any proposed repeals to these legacy EU laws will be greeted with much resistance, but at least Lord Frost and his team will be asking the right questions, and it is to be hoped that the rest of government will find the political courage to implement the answers.

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This week the IEA published my latest paper, A British Innovation Principle – do we need one and what might it look like? ([link removed]) The paper considers the rather dismal effects of the precautionary principle on innovation, long the subject of complaints by businesses in the EU. Poorly defined and much misunderstood, the precautionary principle pervades regulatory policy both expressly in law, and informally through a general culture of precaution. Cost benefit analyses are often unbalanced, and fail to take into account the losses to human welfare and the environment that result from lost innovation. These are issues that BEIS is seeking to address in its proposed reforms, and we will be responding to the consultation.

This week I have been in Lisbon at the annual conference of New Direction ([link removed]) , the European think tank established by Margaret Thatcher, where I spoke on a panel about freedom, innovation and regulation. My remarks concluded that while all of these process reforms are welcome, ultimately we will only see the burden of the regulatory state meaningfully rolled back if there is a political will to do so and, put simply, if governments regulate less. There is still a lot of work to be done on that front.

Victoria Hewson
Head of Regulatory Affairs, Institute of Economic Affairs

Victoria's paper was featured widely across the press and broadcast media, including in City AM ([link removed]) , The Daily Telegraph, The Daily Express ([link removed]) , and a number of regional outlets.

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Victoria also appeared on GB News to discuss her research. She argued that, having left the European Union, we need a British Innovation Principle to make sure that we are not losing out on innovations due to an excessively precautionary approach. You can watch a clip here ([link removed]) .

As Victoria mentioned above, New Direction hosted its annual Think Tank Central in Lisbon this week. Both Victoria and Director of EPICENTER Adam Bartha took part in discussion panels.

On the ‘Deregulating Europe’ panel, Victoria explained how Brexit offers an opportunity for the UK to depart from the EU's precautionary principle, but also criticised the British government for continuing with a similar regulatory mindset to that of the European Commission.

On a separate panel, Adam spoke about the broad alliance of free-market liberal, conservative and libertarian think tanks and the need to focus on topics that unite us on the European scene: pursuing free trade with the rest of the world; endorsing decentralised, simple and low tax regimes across the continent; and focusing on deepening the European Single Market, instead of introducing new regulatory barriers. You can find out more about the event here ([link removed]) .

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After a summer break, a new look Live with Littlewood will return on Wednesday 29th September at 6pm – and this time with a live audience! The show will be filmed at 2 Lord North Street every fortnight, where IEA Director General Mark Littlewood will once again welcome a host of big names to discuss the political news of the week.

As usual, you can watch live on the IEA YouTube Channel ([link removed]) . Watch our trailer for the new series here ([link removed]) .

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Next weekend, ThinkTent 2021 is back! From Sunday 3rd to Wednesday 6th October, the popular marquee at Conservative Party Conference, hosted by the Institute of Economic Affairs and the TaxPayers’ Alliance, returns.

IEA staff will be heading to Manchester to speak on a series of thought-provoking panels covering issues from free speech to free trade, regulation to railways. Speakers include IEA academics – including Head of Regulatory Affairs Victoria Hewson and Head of Lifestyle Economics Christopher Snowdon – as well as industry experts and politicians. Our final panel on the Tuesday afternoon will be an In Conversation event with Chancellor Rishi Sunak.

More details of the events will be included in next week’s newsletter but if you are heading to Manchester be sure to visit ([link removed]) to find out what’s happening in the tent.

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Crisis in care... In his column for The Times ([link removed]) , IEA Director General Mark Littlewood labelled the government’s plan to raise National Insurance contributions to fund social care a "state Ponzi scheme". Mark noted that the funds raised by the new levy will likely go towards day-to-day NHS spending rather than social care.

Mark said: "Cracking the social care problem is not straightforward, especially once political and electoral considerations intervene. This government’s plans... are not a serious solution. Indeed, given that the fund is also to be used to ease crises in the NHS and that the NHS is almost permanently in crisis, it is doubtful how much of the revenue will end up paying for social care at all. It won’t be long before this administration – or its successor – has to go back to the drawing board."

Mark also appeared on Times Radio to discuss his column. You can listen here ([link removed]) from 18 minutes in.

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Risky business... The current shortage in the supply of gas, in conjunction with state imposed price caps and green levies, has caused unhedged companies to go bust.

This has led to calls to bail out struggling suppliers. In her column for The Spectator ([link removed]) , IEA Director of Communications Annabel Denham argued that "there is no justification for expecting the taxpayer to write a blank cheque to unsound businesses. Instead, market forces should be allowed to work."

Quoted in T ([link removed]) he Telegraph ([link removed]) , IEA Economics Fellow Julian Jessop argued that while there may be a case for Government loans to fundamentally sound businesses, these companies should still be expected to borrow on commercial terms. Otherwise, Julian argued, there is a risk that the industry fails to adapt and that it remains vulnerable to further shocks.

The only way is up... This week the Bank of England confirmed that it would continue with its policy of quantitative easing despite growing concerns over rising inflation.

Quoted in The Telegraph ([link removed]) , Julian Jessop warned against this decision. He noted that a prolonged period of above-target inflation would add to the squeeze on real incomes and "undermine the credibility of the Bank itself". You can read his full comments here ([link removed]) .

Last June, Dr Juan Castaneda and Professor Tim Congdon wrote a paper for the IEA on the potential threat of inflation. You can read Inflation: The next threat? here ([link removed]) .

Trading up... The new International Trade Secretary Anne-Marie Trevelyan MP has announced a plan to make it easier for businesses to trade digitally. This comes as the UK government said it would repeal the EU’s online GDPR laws and replace them with a "less burdensome" regime.

Quoted in City AM ([link removed]) , IEA Head of Regulatory Affairs Victoria Hewson said that GDPR rules are a major obstacle to the free flow of digital trade. She noted that "international services trade depends on data flows; so do goods supply chains" and that "eliminating some of the costs, frictions and outright bans, in law or in practice, that plague digital trade could be transformational.”

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The "truth is not enough"... On the 1828 blog ([link removed]) this week, IEA Head of Cultural Affairs Marc Glendening reviewed former BBC Newsnight journalist Paul Mason's new book How to Stop Fascism – which argues we're facing a 'fascist' revival. Mason claims it is capitalism that is to blame for breeding 'hate' and support for fascist ideas among working class communities. Read Marc's views here ([link removed]) .

Happy at home? Office workers may be given the right to request flexible working from day one of a new job, if plans currently under government consultation go ahead.

Writing for City AM ([link removed]) , IEA Director of Communications Annabel Denham argued that civil servants cannot possibly know the preferences of tens of millions of individuals. This is precisely why government should sit back and let employers and employees come to their own, voluntary, arrangements.

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The government's plans to increase National Insurance contributions to fund social care have come under fire. Some have expressed concern over inter-generational unfairness, others fear we won't see results ([link removed]) for the huge cash injection.

In the latest episode of Markets and Morality, which airs on the IEA London YouTube channel ([link removed]) at 9.30am today, IEA Head of Public Affairs Emma Revell is joined by IEA Senior Academic Fellow and Director of the Vinson Centre for the Public Understanding of Economics and Entrepreneurship Professor Philip Booth, and Conservative peer and former member of parliament Lord (Peter) Lilley. Watch the panellists explore how we solve a problem like social care here ([link removed]) .

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With the headlines dominated by the energy crisis unfolding across Britain and much of the world, IEA Communications and Marketing Assistant Kieran Neild-Ali hosted this week's IEA podcast ([link removed]) with guests IEA Academic and Research Director James Forder and Dr Lawrence Haar, Senior Lecturer in Finance at Brighton University School of Business and Law.

They discussed the reasons behind the current shortage of gas supply and the implications of government policy on our future energy security. You can listen here ([link removed]) .

Thank you to all of you who have already signed up to become an IEA Online Patron. Becoming a Patron grants you VIP access to our latest videos, priority invites to our virtual events, and the opportunity to engage directly with IEA Director General Mark Littlewood and the IEA team. For just a small donation you can get all these benefits and more.

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To visit the page and find out more about the IEA’s Patreon, follow the link here ([link removed]) or watch our trailer here ([link removed]) .

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The University of Buckingham is running a course on international trade with the Initiative for Free Trade, which is led by Lord Daniel Hannan. The course also acts as a taster course for the forthcoming Masters-level programme in Professional Studies in International Trade at the University. Online attendance is free. The event will take place on 13th October. You can sign up here ([link removed]) .

A reminder that the Institute of International Monetary Research at the University of Buckingham will be kicking off its Autumn Money Webinar Series at 6pm on Wednesday 13th October, with a discussion with James Ferguson, Founding Partner of MacroStrategy.

On Wednesday 27th October, Steve Hanke of Johns Hopkins University will be leading a discussion on 'Alternative monetary regimes to fight inflation in emerging economies: dollarization, currency and monetary competition'.

Please click here ([link removed]) to register, and here ([link removed]) for further details on forthcoming IIMR events.


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