Foreign Secretary Liz Truss announced this week that the government is going to bring forward legislation allowing it to override certain parts of the Northern Ireland Protocol. This had been widely predicted. To help inform the debate on this complex and technical subject, the IEA published my briefing paper on the Northern Ireland Protocol, which you can read here.



I have been following this issue closely since it first arose in negotiations with the EU in 2016. I wanted to explain what is in the Protocol, how it has been working in practice, and what the UK and the EU respectively want to do about it. Unusually in these times, I found that the British government's proposals are pragmatic and economically liberalising — and the idea of allowing both UK and EU regulated goods to circulate freely in Northern Ireland should be replicated in the rest of the UK.

The briefing drew on economic data, including the massive diversion of trade from Great Britain, the £500 million of taxpayer money spent on infrastructure, and the lack of evidence to support the idea that Northern Ireland enjoys the ‘best of both worlds’ from UK and EU market access under the Protocol. 



I have been able to discuss the matter on Times Radio, TalkTV and in City AM. Naturally, the briefing attracted a lot of internet on our Twitter feed. 

It is still to be hoped that we can reach an agreed solution with the EU. More generally though, the impact of customs and regulatory barriers on trade between the identically regulated and economically integrated territories of Great Britain and Northern Ireland should give us pause for thought about the effects of such barriers (that we largely replicate on our trade with the rest of the world) on global trade and competition.

I also gave my thoughts on the Protocol in a short explainer video on the IEA's YouTube Channel, which you can watch here.

Victoria Hewson
Head of Regulatory Affairs, Institute of Economic Affairs

BREAK THE DEADLOCK



The Rt Hon Lord Frost CMG welcomed Victoria's paper as a "timely contribution to the analysis of the political and economic situation created by the implementation of the Northern Ireland Protocol."

He supported the report's assessment of the UK government's proposals set out in the July Command Paper and its conclusion that unilateral action would be justified in the absence of an agreement with the EU.



IEA Director General Mark Littlewood wrote for The Times on the "compelling case" made by Victoria. Read here. He also appeared on Times Radio to discuss. 

The research was also reported across the national press, including the BBC, Express and regional press, as well as broadcast on Times Radio, GB News, and Australian TV.



The Northern Ireland Protocol deadlock was also a topic of discussion on this week's Live with Littlewood. The panel included Baroness Fox of Buckley, Director and Founder of the Academy of Ideas; Lucy Harris, Political Consultant and former Brexit Party MEP; Darren McCaffrey, Political Editor at GB News; and Victoria Hewson. 

Claire Fox argued that the current agreement was a "barrier to allowing the United Kingdom to remain united". Watch the full episode here.

INFLATION BITES

On Wednesday, it was reported that UK inflation jumped to 9 per cent in the 12 months to April, the highest level it has reached since 1982.



IEA Economics Fellow Julian Jessop argued that the Bank of England’s "sluggish response" has increased the risk of long-term inflation. He blamed the Bank for failing to keep monetary growth under control and said 'loose monetary policy' could undermine the organisation's credibility.

Julian's comments were reported in the Sun. Read the full press release here.



IEA Director General Mark Littlewood appeared on TalkTV on Wednesday evening to discuss
Thursday's front pages and inflation data. Mark warned that "most people are going to be miserably poorer" as inflation continues to rise. He blamed years of poor economic policy for the current situation. Watch highlights here. 

IEA Head of Lifestyle Economics Christopher Snowdon gave his thoughts on the economic crisis on GB News. He argued the enormous amount of quantitative easing over the pandemic has contributed to the high levels of inflation. 



On Live with Littlewood, GB News Political Editor Darren McCaffrey argued "the only way to bring down inflation is with some economic pain", suggesting the government is dodging the economic decisions necessary to tackle the cost of living crisis for the sake of popularity. Watch this week's full episode here.

Dr Juan Castañeda and Professor Tim Congdon, authors of IEA research 'Inflation: the next threat', were praised in The Telegraph for their foresight on inflation. They argued that the rapid increase in the supply of money in 2020 would lead to high inflation in the coming years. Read their research here.

iN THE MEDIA



BBC Question Time... IEA Head of Media Emily Carver appeared on Question Time in Liverpool on Thursday evening. She was joined on the panel by Lucy Frazer MP, Lucy Powell MP, Alyn Smith MP, and Mo Hussein, commentator and former Home Office advisor.

Emily described the Bank of England as "asleep at the wheel" when discussing inflation. She argued not enough attention has been given to the increased supply of money in the economy and that the Bank failed to act decisively to keep monetary policy under control. You can watch her highlights here. 



Left turn... In an article for The Telegraph, IEA Director General Mark Littlewood argued a 'social democratic consensus' has returned to the UK and captured the policy agenda of the Conservative government.

He suggested that the Conservatives are wrongly pursuing a mixture of grand state spending projects to bribe northern red wall voters into staying with the party at the next election. Instead, Mark argued that principled free market policies, which can deliver positive change to people lives, ought to be prioritised: "Most voters – in both north and south – don’t want to be appeased, bribed, managed or patronised. They want more control over their own lives."



Wind-fail... Political pressure is growing for a one-off additional tax on energy firms to fund support for customers facing higher energy bills. IEA Senior Advisor Sam Collins said a windfall tax is "inherently a bad idea" on BBC News and reminded viewers that energy firms already pay higher corporation tax than other businesses. Watch highlights here.

IEA Economics Fellow Julian Jessop appeared on BBC Radio 5 Live on Thursday. He told listeners that "more needs to be done to help low income households but it's not necessary to finance that with an arbitrary windfall tax on energy companies". Julian argued that the Treasury can already afford to support struggling households without raising taxes further as it is currently benefiting from higher tax receipts. 

Listen to the full interview here (from 9mins).



Unscrew the cap... Ofgem has proposed to update the energy price cap quarterly rather than every six months so that the cap is more reflective of current market prices. The energy regulator hopes that the alteration will enable customers to get falling, or rising, energy prices more quickly than the current system allows.

Writing for CapX, IEA Energy Analyst Andy Mayer argued that "the whole notion of a ‘price cap’ is really an illusion. It sounds like it means lower energy prices, when in reality higher costs will turn up somewhere, be they on bills, future bills, or the taxes required to pay for increasing borrowing."



Missing targets... The NHS is likely to miss crucial cancer targets next year, despite the government promising that performance will return to pre-pandemic levels by spring 2023.

Quoted in the Daily Mail, IEA Head of Lifestyle Economics Christopher Snowdon said it was "appalling" that cancer targets are being missed at the same time as one in eight pounds earned in this country is being spent on healthcare. Read here.



Back to work... Fresh figures show that UK unemployment is at the lowest level since 1974. Responding to the ONS data, IEA Editorial and Research Fellow Professor Len Shackleton warned that the positive labour market news could be the "calm before the storm", reminding readers that the latest figures predate the recent energy price hikes and the effects of the Ukraine War. You can read his comment in Politics.co.uk.



Defund the NUS... IEA Head of Cultural Affairs Marc Glendening welcomed the news that the National Union of Students (NUS) will no longer be eligible for government funding.

In an article for CapX, Marc said the government is right to sever ties with the NUS. He criticised the union's obsession with identity politics and their anti-democratic and anti-liberal organisational structure, which erroneously claims to represent every student. Marc argued: "we shouldn’t have to contribute financially towards this antediluvian illiberalism."

Marc Glendening also made a detailed critique of 'politicised transgenderism' and postmodernist thought in an article for Conservative Home. Read here.

Peter specialises in growing organisations through strategic change. He co-founded Charles Tyrwhitt Shirts, where he remains a Director, served as chairman of Cath Kidston until 2010, and is Chairman of two other retailers. 

Peter is also Director and a volunteer speaker at Mary’s Meals International, an organisation which aims to provide the most effective help to those suffering the effects of extreme poverty in the world’s poorest communities. 



You can find out more about Peter, his topic, and THINK at thinkiea.com. If you have queries about group discounts or any other questions, please email IEA Head of Outreach Brittany Davis at [email protected].

CALLING ALL STUDENTS!

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] by 17 June 2022. You can find out more here.



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.