* TALKING POINT, WITH DR JAMES FORDER
* LIVE WITH LITTLEWOOD
* BREAKING THE BANK
* FORTHCOMING EVENTS
* iN THE MEDIA
* IN CASE YOU MISSED IT
* IEA OUTREACH
* THiNK 2022

Last week, the IEA published an analysis of Minimum Alcohol Pricing in Scotland by John C. Duffy, IEA Head of Lifestyle Economics Christopher Snowdon and Mark Tovey. The policy, established four years ago, sets a minimum price of 50 per unit of alcohol sold. That is supposed to reduce problem drinking and thereby improve public health.

Up to a point, one might welcome the fact that a government is pursuing policy goals through the price mechanism. Far too often, policymakers seem not to understand that at all, so that they adopt some assortment of bans, regulations and propaganda campaigns to achieve their goals. We could have been reading that the consumption of alcohol was to be deterred by making it illegal to keep white wine in a fridge.

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But the price mechanism is a more intricate tool than that. The policy of raising a minimum price has some very particular effects. For one, as should have been anticipated, Duffy et al found that nearly all the reduction in sales of the cheapest alcohol was offset by an increase in sales of slightly more expensive kinds. So, the overall reduction in consumption was very limited. (And as to any improvements in public health, crime, or absenteeism from the workplace, any effect was more or less undetectable).

Should we write this off as another piece of ineffective nanny-statism? It makes alcohol more expensive for Scottish consumers, but does nothing much else? Maybe, but really that is no more than half the story. For one thing, the state here is being nanny only to the drinkers of the cheapest alcohol. One wonders how much 50p/unit alcohol is consumed in Holyrood. (It would be about a £5 bottle of wine).

But there is even more to it than that. The Scottish government adopted minimum pricing because their devolved powers do not allow them to increase tax. The effect, though, is that the extra money the consumers have to pay goes to the sellers, rather than the government.

So the policy achieves nothing much of benefit on anyone’s scoring. It shows a government nannying low-income people while the rest are unaffected. And to cap it all off, the policy acts like a subsidy to the sellers of alcohol.

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The paper was covered across the national press, including the Daily Mail ([link removed]) , Evening Standard ([link removed]) , The Independent ([link removed]) , Daily Record ([link removed]) , Express ([link removed]) , Sun, Mirror as well as prominent Scottish publications such as The National ([link removed]) , and the Herald Scotland ([link removed])
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BBC One Scotland ([link removed]) and Scottish TV Channel STV ([link removed]) covered the report's findings on their news bulletin. Christopher Snowdon wrote for CapX ([link removed]) and appeared on GB News ([link removed]) to discuss the paper further.

Dr James Forder
Academic and Research Director, Institute of Economic Affairs

LIVE WITH LITTLEWOOD

On Wednesday, IEA Director General Mark Littlewood welcomed another expert panel of guests to discuss the week's main headlines, including council waste, the nanny state and whether a windfall tax is required to deal with the energy crisis.

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Mark was joined by Morgan Schondelmeier, Director of Operations at the Adam Smith Institute; Alex Deane, Writer and Political Commentator; John O'Connell, Chief Executive of the TaxPayers' Alliance; and IEA Head of Lifestyle Economics Christopher Snowdon.

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The "pestminster" scandal has led to calls for reforms to safeguard staff and improve behavioural standards. Alex welcomed the idea that MPs' staff could be employed by Parliament, saying that working in the Palace of Westminster should be "more professionalised". Morgan disagreed with plans to make half of all Tory MP's female, arguing quotas are demeaning to women.

Ahead of the local elections on Thursday, John attacked wasteful council spending – giving examples such as Nottingham Council spending £7,000 on painting a zebra crossing in rainbow colours. And Christopher discussed the cost of living crisis, and whether a windfall on oil and gas companies represents another "sin" tax.

Watch the full episode on the IEA's YouTube Channel here ([link removed]) .
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As an educational charity, the work we do is entirely funded by donations. If you are able to help, please click here ([link removed]) or get in touch with our Development Director Angela Harbutt at [email protected] (mailto:[email protected]?body=Dear%20Angela%2C) . We thank you for your continued support.
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All you have to do is to start shopping on [link removed] ([link removed]) and pick the Institute of Economic Affairs Limited as your chosen charity. The IEA will then receive 0.5% of your spending on most items. Everything else remains the same (and at no additional cost to you).
BREAKING THE BANK

The Bank of England has raised interest rates to tackle rising inflation. Rates rose to 1 per cent from 0.75 per cent, the fourth consecutive increase since December.

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IEA Economics Fellow Julian Jessop responded that the Bank had not done enough to tame the spike in inflation, which is predicted to peak at over 10 per cent this year. Julian argued the Bank could have raised rates further, saying: "Macroeconomic policy is now in an even bigger mess. Fiscal policy is too tight and monetary policy is too loose, increasing the risks of stagflation".

Julian's comments featured in City AM ([link removed]) , Politics.co.uk ([link removed]) , and in the regional press. He also appeared on the IEA podcast with IEA Communications and Public Affairs Officer Kieran Neild-Ali, discussing the rate rise, the Bank's economic forecasts, and evaluating the risk of the UK sliding into a recession. Listen here ([link removed]) .

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In a Channel 4 News debate, IEA Head of Public Policy Matthew Lesh went head-to-head with Lydia Prieg, Head of Economics at the New Economics Foundation. Matthew said the Bank should have raised rates further, and urged the Bank to take responsibility for tightening the money supply which is a factor in soaring inflation. Watch the full discussion here ([link removed]) .

The IEA’s Shadow Monetary Policy Committee (SMPC) voted to raise interest rates to 1.5 per cent in their April meeting. The minutes of the April meeting can be found here ([link removed]) .

The 2020 IEA paper Inflation: The next threat? observed extremely high growth rates of the amount of money (broadly defined), which authors Dr Juan Castañeda and Professor Tim Congdon said would inevitably lead to a bout of serious inflation in 2021. Read here ([link removed]) .
FORTHCOMING EVENTS

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Going global... The IEA will host a panel discussion on the topic: UK Global Champions – A Global Britain approach to Trade and Foreign Policy, from 5.30pm on Monday 9 May. The event will be livestreamed from 6pm on the IEA's YouTube Channel. You can watch here ([link removed]) .

Speakers include: Greg Smith, Conservative MP for Buckingham and Co-Chair of Free Market Forum; Andy Burwell, International Director at the CBI; IEA Head of Regulatory Affairs Victoria Hewson and IEA Head of Public Policy Matthew Lesh.

For more information click here ([link removed]) or please contact [email protected] (mailto:[email protected]) .

The Chancellors... On Monday 6 June, the IEA Book Club will welcome Sir Howard Davies, British economist, author, and Chairman of NatWest Group, to discuss his upcoming book The Chancellors: Steering the British Economy in Crisis Time. This event will take place from 6pm at the IEA.

This event is exclusively for IEA Book Club members. For more information on the Book Club please get in touch at [email protected] (mailto:[email protected]) or click the link here. ([link removed])

iN THE MEDIA

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Economic Nato... In his fortnightly column for The Times ([link removed]) , IEA Director General Mark Littlewood evaluated Foreign Secretary Liz Truss' suggestion that the West should reimagine international institutional infrastructure in light of the Ukraine War. This could be a Western alliance based on economic strategy, which mirrors that of Nato’s military partnership.

Mark argued any economic alliance should be grounded in the principles of free trade, and the West should re-evaluate whether existing institutions, such as the World Health Organisation, are still relevant to our global needs.

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"Pestminster"... IEA Director of Communications Annabel Denham argued against imposing a HR structure on staff in Parliament in an article for the Telegraph ([link removed]) Business ([link removed]) .

Although recent scandals have highlighted a problem with sleaze in Parliament, she suggested current proposals to clean up Westminster will have little effect. Annabel said: "Saints rarely get elected. But it’s unlikely HR will fix the 'bad apples' that do".

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Public health overload... in her weekly Spectator ([link removed]) column, Annabel also took aim at nanny state policies which are squeezing households in the midst of a cost of living crisis.

She described plans to scrap 'buy one get one free' offers in autumn as "pointless nannying". Annabel also cited alcohol minimum unit prices in Scotland as an example of "paternalistic, regressive and seemingly ineffective measures introduced on the basis of dubious assumptions".

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Tech regulatory overreach... IEA Head of Regulatory Affairs Victoria Hewson wrote for CapX ([link removed]) on social media giant Meta's decision to appeal last year’s ruling by the Competition and Markets Authority (CMA) that its acquisition of GIF provider Giphy was anti-competitive.

Victoria argued that a robust appeals process is required to prevent regulators from exceeding their scope. She also welcomed the decision to shelve plans to embolden the power of the CMA and the Digital Markets Unit (DMU) which would have given the regulator more power to intervene in the tech sector.

Victoria was quoted on the decision to axe plans to increase DMU's powers in City AM ([link removed]) , saying: "Far from protecting competition and innovation, this [DMU] would be more likely to lead to a decline in investment in tech, threatening economic growth and the development of digital services that consumers value". Read here ([link removed]) .

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Covid paranoia... IEA Head of Lifestyle Economics Christopher Snowdon criticised calls from SAGE and NHS officials to reinstate social distancing measures and face mask mandates as the NHS battles with large patient backlogs.

Although Covid is largely behind us, many still insist Covid cases need to be reduced, ignoring the fact that deaths and cases are down. Read Christopher's Spectator article here ([link removed]-) .

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Wind up... Energy giants Shell and BP have recorded large profits in the first quarter of 2022, prompting politicians to demand a windfall tax to alleviate the energy crisis hitting households across the country.

IEA Energy Analyst Andy Mayer criticised calls for new taxes on the North Sea oil and gas sector in City AM ([link removed]) reminding readers that there already is a 40 per cent special corporation tax on the North Sea.

Andy also told viewers on TalkTV that tax increases on energy firms would stifle much needed investment and tax receipts. Watch highlights here ([link removed]) .
IN CASE YOU MISSED IT

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The myth of the 'Post-War Consensus'... Many people assume that firstly, a post-war consensus existed and, secondly, that it drove the statism of pre-Thatcherite governments. In a lecture, .IEA Head of Education Dr Steve Davies highlights that this was not the case. You can watch it here ([link removed]) .

Parallax Views... Is collectivism on the rise? Does free debate still exist in universities? These questions – and much more – are explored in the latest episode of Parallax Views, with IEA Head of Cultural Affairs, Marc Glendening, and Chairman of the Ayn Rand Institute, Yaron Brook.

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The Double Take... In this episode, host and IEA Head of Media Emily Carver speaks to Andrew Lilico, Executive Director of Europe Economics, about inflation and the Bank of England's decision to raise interest rates, and to Mo Lovatt, National Coordinator of Debating Matters, about Roe v Wade and the abortion debate in the US. You can watch here ([link removed]) .

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Markets & Morality... Since Russia began its assault on Ukraine, Western countries have imposed a wide range of economic sanctions on the regime and on individuals linked to them. But how effective are these sanctions and who are they meant to target? Host and Director of EPICENTER Adam Bartha welcomed Jessica Miller, the Founder of Strela Advisory and Fred Roeder, the Founder of Consumer Choice Center to debate the issue. Watch here ([link removed]) .

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CapX Podcast... IEA Head of Political Economy Dr Kristian Niemietz joined the Adam Smith Institute’s Morgan Schondelmeier to discuss the week's main headlines on the CapX Podcast. The pair chewed over the cost of living crisis, Elon Musk’s mooted takeover of Twitter and the leaked Supreme Court ruling on Roe vs Wade. Listen here ([link removed]) .

IEA OUTREACH

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The Initiative for African Trade and Prosperity (IATP) has funded the printing of 1,600 copies of Dr Eamon Butler's book 'Introduction to Trade and Globalisation ([link removed].) ' in Uganda in partnership with Action for Liberty and Economic Developm ([link removed]) ent ([link removed]) . 500 copies are going to South Sudan to be distributed by Students Organisation for Liberty and Entrepreneurship ([link removed]) .

Check out the IATP’s virtual library here ([link removed]) , where there is a collection of texts in English, French, and Swahili that provide an introduction to free trade, economic development, and political theory from a classical liberal perspective.

More information about the work of the IATP can be found here ([link removed]) .

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In other news... Africa’s prime TV station, Channels Television, interviewed our Head of International Outreach, Adam Bartha, on the recent Twitter takeover by Elon Musk. While Adam was slightly optimistic about the future of the social media company thanks to Elon’s pro free-speech credentials, he is more pessimistic about the regulatory framework around tech firms. Watch highlights here ([link removed]) .

THiNK 2022

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We are delighted to announce our third THINK speaker for 2022 is Helena Morrissey DBE, who will be discussing 'The myth of having it all'. Find out more here ([link removed]) .

Helena has worked in financial services for over three decades. She was CEO of Newton Investment Management for 15 years and is now Chair at FTSE250 firm AJ Bell, whose purpose is to help people invest.

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You can find out more about Helena, her topic, and THINK at thinkiea.com ([link removed]) . Email IEA Head of Outreach Brittany Davis at [email protected] (mailto:[email protected]) with questions or group discount rates.

CALLING ALL STUDENTS!

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We are excited to launch the Economic Thought Leaders’ Symposium at the University of Buckingham from 7-9 September 2022.

The theme for this year’s programme is The Economics of War and Peace. We will discuss topics like trade not war, international institutions, diplomacy and game theory. To apply, please send a CV and cover letter explaining why you’d like to attend, as well as 500 words on promoting the reconstruction of an economy after a war to [email protected] (mailto:[email protected]) by 17 June 2022. You can find out more here ([link removed]) .

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We have launched the 2022 Dorian Fisher Essay Competition. Named after the beloved wife of our founder Sir Antony Fisher, this is our biggest essay competition of the year, exclusively for A-Level and IB students.

First prize will receive £500, with a separate prize of £500 for the school with the highest number of entrants. The deadline for this year’s competition is Friday 29 July 2022. You can find out more here ([link removed]) .

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