Happy New Year and here's hoping that the coming twelve months are a happier time for sound economic thinking and free market change than 2022 proved to be.

The year just passed followed the recent modern trend of being tumultuous, chaotic and, overall, rather depressing. An administration that purported to be in favour of free market reform collapsed ignominiously after barely six weeks.

On analysis, of course, spending constraint and fiscal prudence appeared not even to make it to the status of "afterthought" in the Truss government's considerations. A huge and untargeted energy bailout package – perhaps the most expensive single welfare policy in British history – and tax cuts which were not matched by spending reductions were unsustainable. Turmoil in the markets – in part caused by the highly complex, over-regulated management of pensions – led to a swift downfall for Liz Truss.


Watch our discussion with Liz Truss biographers Harry Cole and James Heale on YouTube here.

At government level in 2022, we had five different education secretaries, four Chancellors of the Exchequer and three Prime Ministers. Very sadly, we also had two monarchs. Even if we credited our politicians with unparalleled insight and wisdom, such extraordinary instability is unlikely to lead to meaningful free market reform.

The year ahead presents huge challenges, but also opportunities, for those of us committed to spreading market-orientated ideas. Among the wider public, if not the political classes, there seems to be a recognition that much of Britain isn't working. A health system on the brink of collapse, industrial strife, high inflation and a stagnating economy have led to a widespread view that the way we currently do things is broken.



But that analysis has not yet led to broad support for free market reform, a smaller state and a more universal application of the price mechanism. In the months and years ahead, the IEA will need to present the public with analysis, not merely prescriptions. The patient might know they are ill and suffering, but without understanding and appreciating the root cause of their woes, they may be unwilling to accept the sort of surgery that free marketeers advocate.

That means our core educational mission – explaining concepts and principles rather than engaging in technical policy-engineering – is truly vital in the coming year. Thank you for your support in helping us pursue that goal.  

Mark Littlewood
Director General, Institute of Economic Affairs

TEACHER SEMINAR 2023

On 8 February, we will be holding our 2023 Teacher Seminar with IEA Head of Education Dr Steve Davies. The topic will be 'Productivity and Secular Stagnation'. 

The event will run from 9:45am-3pm, with lunch provided – though those unavailable to attend in person are welcome to join online. While it is aimed at A-level Economics teachers, all are welcome! To find out more and reserve your place, please contact [email protected]. 



And a reminder that applications for our Future Thought Leader Programmes for sixth-formers and undergraduates are now open. There will be two weeks for sixth formers in April, and one in July. The undergraduate programmes will take place in July and August.

You can find out more information on the programmes and how to apply here.

ON LIFE SUPPORT

More stories emerged about the NHS in "crisis" last week, with record numbers of ambulances queuing at Emergency Departments, excess deaths reportedly reaching their highest level since the pandemic peak, and half of parents claiming they feel unable to access NHS services for their children. 



Speaking to GB News, IEA Head of Public Policy Matthew Lesh said:

"Every winter, there is an NHS crisis. This is not normal, nor is it universal. 

 "It does seem to speak to a fundamental problem in the NHS... it’s a highly monopolistic, bureaucratic, one-size-fits-all system."

Matthew’s appearance can be viewed here (1:09:00).



Our Head of Lifestyle Economics Christopher Snowdon was quoted in the Daily Mail on the prospect of pandemic-style restrictions being introduced to relieve winter pressure on the NHS.

Christopher said:

"We mustn't allow the NHS's annual winter crisis to be used as an excuse to reintroduce Covid-era restrictions.

"There is no evidence that the latest sub-variant of Omicron is more dangerous and the Chicken Littles warning of disaster have been wrong again and again for 18 months."



Christopher also spoke to the Daily Mail about a recent WHO paper claiming that even low and moderate alcohol consumption may be unsafe, commenting:

"In its efforts to demonise alcohol, the WHO speculates there to be 'no safe level' of drinking for a few forms of cancer. It admits that there is insufficient evidence to support this.

"There is, however, a huge amount of evidence built up over decades showing that moderate drinking significantly reduces the risk of heart disease, stroke, diabetes and dementia.

"On average, moderate drinkers live longer than teetotallers, so if moderate drinking is risky enough to worry about, the risks of not drinking at all must be terrifying."

Read the article in full here.

iN THE MEDIA



Such a thing as society... in his fortnightly column for The Times, IEA Director General Mark Littlewood explained how we might bring about a revolution in the charitable and voluntary sector.

We could deregulate, make it "more attractive" from a tax perspective to donate to charities – or at least to those directly associated with poverty relief – and "get back towards viewing state action as being something akin to a last resort rather than a first resort".

Read in full here.



Can we fix it?... Responding to reports that the Prime Minister intends to shelve Liz Truss's childcare reforms, our Director of Communications Annabel Denham argued that the broken sector provides a case study in what goes wrong when government is lobbied by single-interest groups to expand its role.

Abandoning plans to loosen teacher:child ratios would be a "mistake," while both Rishi Sunak and his predecessor are on the wrong track in believing the solution to high prices is yet more government funding.

Read the piece in full here.



Lacking ambition?... Reacting to Rishi Sunak's speech last Wednesday, in which the Prime Minister set a series of priorities for government, Mark Littlewood told Julia Hartley-Brewer:

"These pledges aren't much more than forecasts…I was almost waiting for a sixth pledge promising that, by the summer, the weather would be warmer."

Watch a clip from his interview on TalkTV here, or the full version here (from 1:41:00).



Off the rails... It was reported last week that new anti-strike legislation will be introduced to enforce "minimum service levels" in key public sectors including the NHS and schools, to minimise the disruption wreaked by industrial action. While this has been proposed in the past, it has been confined to the transport sector.  

IEA Editorial and Research Fellow Professor Len Shackleton cast doubt on its impact and whether it could really be imposed. Writing for CapX, he said:

"The government would likely get bogged down in legal challenges and would certainly face great difficulties in reaching acceptable levels of provision during strikes... In emergency services in particular, it would be simpler and probably more effective simply to ban strikes outright, or impose compulsory arbitration."

In the dark... IEA Energy Analyst Andy Mayer was quoted in City AM on the prospect of winter blackouts in 2023. He told the newspaper that this was a very real risk, saying:

"The UK should be securing new supplies with urgency, and doing so through trade deals, streamlined regulation, and saner, simpler, stable taxes. Doing otherwise takes us closer to state bailouts and nationalisation, which we cannot afford, and will leave us shivering in the dark."

About time... And our latest report, Harvest time: Why the UK should unleash the power of gene editing, has been featured in The Times.

Its author and Director of Bio-Sciences at the American Council on Science and Health, Cameron English, told the newspaper:

"The technology can be safely utilised to boost crop yields, reduce pesticide use and improve animal welfare. Hopefully, England will continue its progress toward a science-based farm policy and approve the cultivation of genetically modified crops as well."



A corrupted philosophy?... IEA Communications Officer Harrison Griffiths has reviewed Professor Andrew Koppelman's 'Burning Down the House' for the IEA Blog.

The book is a critique of radical libertarianism, which argues that the valuable contributions of classical liberals like F.A. Hayek have been overshadowed by selfish and dystopian visions of liberty laid out by the likes of Ayn Rand and Murray Rothbard.

Read Harrison's review here.

IEA DIGITAL



Rocky road... Sub-Saharan Africa has 46 countries, 9m square miles and over 1bn people. The continent has achieved substantial progress over recent decades but now finds itself at the heart of a new great power feud.

China's Belt and Road Initiative risks entrapping governments with debt diplomacy, while growing aid from the Biden Administration could prove counterproductive.

To discuss Africa’s economic trajectory, and geostrategic wrangling, the IEA's Free Trade Fellow Alexander Hammond joined our Head of Public Policy Matthew Lesh on the IEA Podcast, available on our YouTube channel here or on Podbean here.