How have this week’s rail strikes been for you? For many, it has meant a reversion to lockdown-style working from home – rather comfortable, especially given some nice weather. For others, however, it has meant hellish commutes, disrupted production, and for London’s restaurants, theatres and other entertainment businesses losses amounting to many millions of pounds. 

Given that our erstwhile transport guru, Richard Wellings, has left the IEA, I have by default become the IEA’s ‘rail expert’. It’s not a description I deserve, though I do know a bit about both this current dispute and the wider industrial relations set-up.  

I’ve been doing quite a few radio and TV interviews where I have tried to point out how atypical the rail unions are. I appeared on BBC Politics Scotland, TalkTV, GB News and BBC Radio Hereford and Worcester.

The national unionisation rate has fallen to its lowest level since data were collected in the current format, with just 23 per cent of employees in unions. 60 per cent of these are in the public sector. There are a lot more self-employed people than there are private sector union members.

The rail disputes are understandable given that two years of on-off lockdown have disrupted normal pay settlement processes. But the railways have been massively subsidised by the taxpayer over this period, and cannot expect such largesse to continue. Revenue is down to around 80 per cent of pre-Covid levels, and patterns of use have changed sharply. The rail unions’ apparent assumption that things can continue as before while their members receive an inflation-busting pay increase is surely not going to happen. 

The rail strikes are only one part of what is being called a ‘summer of discontent’, with bus drivers, teachers, some NHS workers, civil servants, local government workers and even barristers striking or threatening industrial action. Several interviewers, most of whom were in rompers at the time, have asked me if this means we are going back to the seventies. Probably not. In 1979, over half the workforce were in unions, 5 million were in ‘closed shops’ where union membership was compulsory and 25 million working days were lost to strikes. In 2018, the last year for which we have figures, days lost amounted to about 1 per cent of that total.



The seventies were economically challenging, certainly. But despite the strikes and the gross inefficiencies of nationalised industries, it was a time of much greater personal freedom than today, when people are scared to speak out and there is a premium on conformism. Air travel was much easier. Most private businesses were subject to far fewer constraints, with health and safety and employment regulation in their infancy. Mortgages were cheaper and easier to obtain for young people. Universities were expanding and the arts, theatre and music – from glamrock to punk to classical – were in the ascendancy.  

Perhaps going back to the seventies wouldn't be such a bad idea after all? 

Professor Len Shackleton
Editorial and Research Fellow, Institute of Economic Affairs

LOCKDOWN LESSONS

On Wednesday, the IEA released its latest paper, 'Lockdown Lessons in Health Economics: The case of Alcohol', authored by Head of Lifestyle Economics Christopher Snowdon. The paper dispels popular public health wisdom that by limiting the availability, affordability and advertisement of alcohol products, a fall in per capita consumption will also lead to a decline in alcohol-related harm and deaths.



The Covid-19 lockdowns in the UK provided a ‘natural experiment’ in which the impact of dramatic changes in the availability and marketing of alcohol can be examined. During lockdown, the number of alcohol outlets fell and expenditure on alcohol advertising fell by approximately half. Alcohol became slightly less affordable due to a fall in incomes. The paper highlights that despite these conditions, the UK saw a 18.7 per cent increase in the number of alcohol-specific deaths in 2020, contrary to what public health tsars would expect to see.

This suggests that nanny state policies, which aim to curb overall consumption of alcohol, such as raising prices and ad bans, fail to prevent alcohol-related harm. Christopher argues that a public health policy rethink is therefore needed to target support to heavy drinkers and free other drinkers from burdensome costs. Read the full report here.



Christopher appeared on TalkTV to discuss the paper and presented the main points of his research in an explainer video here. The paper was also widely reported across the regional press.



On the same day as we released Christopher's report, the World Health Organisation (WHO) recommended higher taxes on alcohol and the wider introduction of minimum unit pricing (MUP).

Christopher Snowdon responded in an article for The Telegraph, citing his report and the Scottish government's failed MUP policy, which has not reduced alcohol consumption among heavy drinkers, and cost the Scottish consumer £270 million. 



He said: "harmful drinking is not driven by commercial factors or by a lack of regulation, but by personal circumstances, hardship and stress. Tackling harmful drinking requires focusing on harmful drinkers rather than on the whole population."

Christopher was quoted on the WHO's calls for MUP in the Daily Mail, and The Telegraph, as well as across the regional press.

Yesterday, we were delighted to announce the recipient of our first Inspiring Freedom Award, to coincide with the IEA’s annual THINK conference.

The award, launched this year, recognises an individual philanthropist or company who has made an outstanding contribution to the Institute’s student education programme in the previous calendar year in terms of time, talent and resources.  



The 2022 IEA Inspiring Freedom Award goes to American businessman and renowned philanthropist Vernon W. Hill II, who was the founder and first Chairman of UK-based Metro Bank. 

IEA Director General Mark Littlewood, congratulated Vernon on his award saying:

"Vernon was a regular feature of our 2021 summer education programme speaking to over 1,000 students from over 40 different countries across the period. Behind the scenes he is also an excellent sounding board for ideas, keeping the students needs first and foremost in our plans. We were all united in our decision as to who should receive the inaugural award".

You can watch Vernon’s reaction to receiving the award on our YouTube channel here, and read our blog post here, by IEA Chief Operating Officer Andy Mayer to find out why recognising outstanding philanthropy matters more than ever.

iN THE MEDIA



Raise the roof... There were reports this week that the government is considering abolishing the EU-imposed cap on bankers' bonuses.

Writing for The Telegraph, IEA Head of Public Policy Matthew Lesh supported the move. He said:

"Leaving the EU will only be a worthwhile endeavour if we seize opportunities. The rules about bankers’ bonuses have had a disproportionate impact on the UK as a financial services hub. They were opposed by the UK government at the time."



Good service... Matthew also wrote for Spiked Online on claims that social media are pushing users to the political far right, and how such 'misguided' theories have informed the upcoming Online Safety Bill.

Matthew posited: "The result of all the duties in the Online Safety Bill will be to undermine freedom of expression, by encouraging platforms to show users less controversial content and empowering the easily offended to demand content be removed. And all of this is based on an unproven premise that social media are responsible for many of society’s ills."



Plunder and pillage... Commenting in The Telegraph, IEA Head of Regulatory Affairs Victoria Hewson, considered the EU's apparent 'plot to punish the City of London'.

Victoria asserted: “The financial services industry really benefits from being able to access the City, especially its clearing markets. It’s a global leader and even if you make it more difficult to access, that is just as likely to drive business to New York and major hubs in Asia. So the move won’t even serve the EU’s own protectionist goals.”



Lock it out... The government has restored the pension triple lock, which will see the state pension rise by 10 per cent in line with inflation. IEA Editorial and Research Fellow Len Shackleton argued in favour of scrapping the triple lock and targeting public money at those most likely to be impacted by high inflation.

Len said: "It may be difficult politically to renege on the triple lock again, but we should bear in mind that pensioners as a group are less likely to be in poverty than, say, families with young children. Support for struggling households could be better targeted."

Len's comment was reported across the media, including in Bloomberg, Guardian, Daily Express and The Independent.



Less dithering, more drilling... IEA Energy Analyst Andy Mayer appeared on BBC Radio 2 to discuss the rail strikes and soaring energy prices.

Andy argued that the cost of living crisis is largely an energy crisis and told listeners "the only way to deal with inflation in energy is to keep costs down", which means we must increase the supply of oil and gas. Listen here  (from 10mins).

Oil and gas industry unite!...In an article for CapX, Andy compared the Union's strategy of bending the government to their members' needs with that of the oil and gas industry. He wrote:

"Were a group like the RMT representing the North Sea then we might reasonably expect to see the taps being turned off and the rigs shut down. We would see industry leaders reminding us that we need these resources, and their workers are energy heroes keeping the lights on, not climate criminals."



Wrong side of the tracks... Matthew appeared on GB News to discuss ongoing rail strikes. He said: 

"I'm not against the idea of unions striking, I think they should be free to withdraw their labour. At the same time, people shouldn't be free of consequence if people withdraw their labour. Companies should be free to sack staff who withdraw their labour."



Caffeine crusade... The Welsh Government is currently consulting on whether to outlaw the sale of energy drinks to children under 16.  Quoted in The Sun, IEA Head of Lifestyle Economics Christopher Snowdon said:

"Since a can of Red Bull has no more caffeine than a cup of instant coffee, it is for politicians to explain why one is too dangerous for fifteen year olds but the other is fine. I’d like to see them try."

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.