It should have been an interesting week, with the Labour Party conference giving us a look at what the Opposition proposes if returned to office. In reality, there was nothing much to get excited about.
While Keir Starmer is trying to move his party slowly back towards the centre, his vociferous left-wing minority prevents a radical shift of direction. On social care, he rejected the government’s approach of raising national insurance, preferring vague statements about taxes on the rich. There was a waffly commitment to more green ‘investment’ and to scrapping business rates, but despite Rachel Reeves’s business-friendly noises, it’s difficult to discern a fundamental change in Labour’s thinking.
I was glad, though, to see that Mr Starmer slapped down Andy McDonald MP’s demand for a £15 an hour minimum wage for all workers, irrespective of age. If such a policy were introduced, many small businesses could go bust and young people in particular would find jobs hard to come by.
It was a missed opportunity for Starmer to suggest simplifications to our excessively complicated minimum wage system and the return of full responsibility for recommending rates to the Low Pay Commission. As I’ve argued ever since George Osborne bypassed the LPC to introduce the National Living Wage, politicians plucking numbers out of the air for minimum wages in a competitive bidding process should stop.
This week saw the end of the Universal Credit uplift and the end of state-sponsored furlough through the Coronavirus Job Retention Scheme. The government has stood firm in the face of calls to extend these measures, a necessary stand if we are ever going to get a grip on our enormous fiscal deficit. But it was a difficult call. Should unemployment and inflation rise this Autumn and Winter, as is possible, I fear we could still see a partial reversal.
On a different note, I returned to live teaching this week and it was great to see students in person again. They were all very keen to get working – I hope that drive doesn’t evaporate as the novelty wears off.
On the other hand, back in cyberspace, I also started running the new Distance Learning MA in Political Economy by Research, which the University of Buckingham is offering in conjunction with the IEA. We had a great webinar session on Adam Smith led by the Adam Smith Institute’s Eamonn Butler, and I am looking forward to some of the other great speakers we have lined up on the programme.
Professor Len Shackleton
Editorial and Research Fellow, Institute of Economic Affairs
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THINK TENT 2021
In just a few hours Conservative Party Conference kicks off in Manchester and, as always, the Institute of Economic Affairs will be there to bring sound economic analysis to proceedings.
ThinkTent, one of just four premier marquees at the conference, will be packed to the brim with academics, politicians, industry experts, journalists, local councillors and activists to participate in eighteen fantastic events. From home-team experts Christopher Snowdon and Victoria Hewson, MPs including Greg Smith and Steve Baker, diplomats including the current and former Australian High Commissioner to the UK, you won't want to miss out on this year's action.
The debates kick off at 2.45pm today with a stellar panel looking at “Boom or bust: the economy in a post-pandemic world” and end on Tuesday evening where IEA Director General Mark Littlewood and the TaxPayers’ Alliance Chief Executive John O’Connell will sit down to interview the Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP.
Find out more about all our events at www.thinktent.co.uk and follow the IEA social media pages for updates here, even if you can’t join us physically in Manchester.
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LIGHTS, CAMERA, ACTION!
On Wednesday evening, we hosted the first episode of the new season of Live with Littlewood – back with a new studio set-up, live audience, in-person guests and plenty of debate and discussion!
Host Mark Littlewood was joined by Tom Harwood, Political Correspondent at GB News, Christian Calgie, Senior Reporter at Guido Fawkes and, from the home team, IEA Head of Lifestyle Economics Christopher Snowdon and Head of Public Affairs Emma Revell.
They discussed the current fuel shortages, the Labour Party conference and whether the government's efforts to "reverse the trend on obesity" will have any impact.
We'll be hosting Live with Littlewood from the IEA in-house studio fortnightly on Wednesday. If you’d like to join our live audience, please do consider signing up to IEA Patreon, where top tier members will get priority. As usual, you can watch live on the IEA YouTube Channel. Watch our trailer for the new series here.
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PITFALLS AND PROMISES
How should we regulate the likes of Uber and Airbnb? A new IEA book published this week, The Sharing Economy: Its Pitfalls and Promises, by Professor Michael Munger, a researcher at Duke University in North Carolina, considers the questions raised about ownership and sharing platforms, the problems with disruptive technology, and considers how regulators will need to adapt to ensure experimentation is encouraged.
The book argues that regulators must embrace permissionless innovation and adopt a strong presumption in favour of allowing experimentation with new technologies and new business platforms. You can read The Sharing Economy here.
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iN THE MEDIA
Wound up… The furlough scheme ended this week after many more months than anticipated. Though the news was welcomed by various members of the IEA team, it came up against resistance from certain quarters. You can read IEA Editorial and Research Fellow Professor Len Shackleton's comments here.
In a debate on Channel 4 News, IEA Senior Academic Fellow Professor Philip Booth argued that the furlough scheme served a useful purpose in the immediate storm of the pandemic but had begun “stopping people from moving to new jobs being created in the post-Covid economy". You can watch the highlights of Philip's interview here.
On the same day, IEA Director of Communications Annabel Denham and IEA Economics Fellow Julian Jessop each appeared on GB News to discuss furlough – you can watch a clip here. Julian also discussed furlough on BBC Radio 5 Live, and IEA Editorial and Research Fellow Professor Len Shackleton spoke to BBC Radio Glasgow this morning about the ending of the scheme.
Len was quoted in City AM, urging the government to stimulate the labour market by reducing the tax burden on employers. Len argued that “the government should be doing all it can to facilitate new jobs”.
Take VAT...! As well as the end of furlough, the reduced rate of VAT for hospitality will also return to pre-pandemic levels, jumping from 5 to 12.5 per cent before eventually returning to 20 per cent. Julian Jessop welcomed the tapered approach to increasing VAT, saying a jump straight back to the normal rate would be “a step too far.” Read Julian’s reaction in City AM.
Conference talk... The Labour Party held its annual conference in Brighton this week. Shadow Chancellor Rachel Reeves MP set out Labour’s plan for the economy on Monday. Commenting on her speech, IEA Economics Fellow Julian Jessop said that the Shadow Chancellor showed “willingness to think big, but her speech raised more questions than it answered”.
Julian argued the Labour Party’s plan to increase the Digital Services Tax from 2 per cent to 12 per cent would be passed onto the consumer, and added that Labour, like the other major parties, have no realistic plan for the reform of business rates or corporate taxation. You can read more here.
IEA Editorial and Research Fellow Professor Len Shackleton commented on Andy McDonald MP's £15 minimum wage proposal. He said such a rise would lead to “hundreds of thousands of young people, disproportionately those from ethnic minorities, losing their jobs or failing to find one”. You can read Len’s comments here. Annabel Denham also appeared on GB News to debate calls to raise the minimum wage.
Elsewhere, IEA Head of Political Economy Dr Kristian Niemietz noted "it is clear the Labour leader is still trying to drag his party out of the Corbyn era, kicking and screaming. And judging from all the heckling – not very successfully so".
Panic at the pumps... After another week of queues at the petrol pumps and anguish around our energy supply, Annabel Denham wrote her weekly column for The Spectator on the failure of state intervention in the economy. Annabel suggested recent events vindicated free market opposition to policies such as the energy price cap and restrictions on immigration. Read the full article here.
In an article for The Critic, IEA Head of Lifestyle Economics Christopher Snowdon argued that one solution to the current fuel shortages would be for petrol stations to simply increase the price of fuel. Read Christopher's article here.
And IEA Chief Operating Officer Andy Mayer argued that the UK government should reconsider its moratorium on fracking in The Daily Express.
Budget incoming... On 27th October, the Chancellor Rishi Sunak is expected to deliver the Autumn Budget. IEA Economics Fellow Julian Jessop urged the Chancellor to prioritise growth. Julian told City AM, “The government should focus on supporting growth, rather than finding even more ways to raise the burden of tax”.
Quan-go! On Friday, government agency Public Health England was finally axed. In an article for Spiked, IEA Head of Lifestyle Economics Christopher Snowdon looked back on its legacy.
Christopher argued that part of the organisation's downfall was its obsession with personal behaviour: “it paid too little attention to public health and failed catastrophically when tested by an infectious disease.”
You can read Christopher's paper,You had one job: The shortcomings of Public Health England and the World Health Organization during the Covid-19 pandemic, here.
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IEA PATREON
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.
To visit the page and find out more about the IEA’s Patreon, follow the link here or watch our trailer here.
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YOU'RE INVITED
*IEA Book Launch with Dr Jamie Whyte
On Monday 11th October, the IEA Book Club will host a launch event for our latest book 'Why Free Speech Matters' authored by IEA Fellow Dr Jamie Whyte, as part of the IEA’s Cultural Affairs programme. The event will be chaired by IEA Director General Mark Littlewood.
In his book, Jamie explores the importance of – as well as contemporary threats to – free speech. He also issues a rallying cry to those who care about free speech to come to its defence.
IEA Book Club events are usually reserved for members, but we will be opening this launch event to the public. To apply for tickets, please contact us at [email protected] or call 020 7799 8906. To find out more about the IEA Book Club, please follow the link here.
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.
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