Welcome to the IEA Weekend Newsletter!

• The ex-Exchequer
• HS too expensive...
• New Vision for the BBC
• Money’s too tight to mansion...
• African dawn 
• Calling all teachers
• You’re invited!

The ex-Exchequer

Boris Johnson’s Cabinet reshuffle saw the shock resignation of Chancellor Sajid Javid, after tensions with the Prime Minister's chief aide Dominic Cummings came to a head. 

Former Chief Secretary to the Treasury Rishi Sunak was swiftly promoted to replace him. The new Chancellor has just three weeks to add finishing touches to the looming Budget.

Prior to Thursday’s dramatic events, rumours were circulating that the Budget – billed as a new dawn of spending – could include wealth taxes, mansion taxes and raids on pensions. 

Nothing is set in stone, but government could be leaning more towards tax hikes than tax cuts. 

Following his election win, the Prime Minister has been under mounting pressure to deliver on his promise to “level up” the country and “rebalance” the economy, particularly in light of the Conservatives’ new voter base.

But the new Chancellor should be wary of turning on the spending taps while ignoring the tax burden, which is at a near 50-year high. 

Over the years, the IEA has made several recommendations on how the UK can level up the UK economy. 



Read our report ‘Balancing the economy: The hand of government or the invisible hand?’ here. 

You can also find the IEA's Dr Richard Wellings' take on former Chancellor George Osborne’s Northern Powerhouse here.

HS too expensive...

Elsewhere, the IEA responded to the Prime Minister’s decision to give the controversial HS2 project the green light – a move the IEA’s Head of Transport Dr Richard Wellings said was “deeply disappointing”. 



Richard argued that “with the predicted costs ballooning to £106 billion, the costs are now likely to exceed the benefits, and the project is highly unlikely to transform the north in the ways promised.” 

He added “investment in alternative schemes such as incremental improvements to existing infrastructure in northern towns and cities would deliver far larger economic gains.” 



Richard’s comments featured widely across the press, including The Sun, The Times, Financial Times, City AM, Metro and France 24. 

Richard also appeared on ITV Tyne Tees News, the BBC Asian Network, talkRadio and LBC to discuss the news. 

You can find further IEA reading on HS2 here, here and here. 

New vision for the BBC

For many supporters, the BBC has always had a strong moral purpose: to inform, educate and entertain. 

But with two years to go until its centenary, the corporation is on the ropes. The licence fee is under review, and the broadcaster is struggling to connect with younger audiences, who are being wooed by digital services. 

Our Senior Academic Fellow Professor Philip Booth put forward his proposal to mutualise the BBC in Radio 4’s Moral Maze on Wednesday. His proposal would see the BBC become a subscriber-owned mutual rather than commercially privatised. 

Philip argued that as our consumer habits change, it’s inefficient to require everyone who owns a television to pay the licence fee, even if they do not watch BBC content. 



He said it “is like subsidising a state-funded publisher in the 19th century that was printing on parchment.

"This is an antiquated model that has to be liberated from its current institutional situation." 

You can catch up on the programme here. 



You can also read Philip’s recent paper on the BBC here.

Money’s too tight to mansion...

On Monday the IEA’s Digital Manager Darren Grimes appeared on the BBC’s Politics Live. 



Darren was joined on the show by new Conservative MP Siobhan Baillie, Labour MP Stephen Kinnock, and BritainThink’s Deborah Mattinson. 

The panel discussed the Irish elections, how the Labour Party can recover lost ground, and reports that the government is considering introducing a “mansion tax”. 



Darren argued the government’s tax proposals amount to “levelling down” not levelling up the UK economy - and that new Tory voters in the North and Midlands would have voted for Jeremy Corbyn if they’d wanted a virtue-signalling “squeeze the rich” government.  

It was “patronising” to assume that, having rejected such policies in the last three General Elections, voters now wanted a tax-based assault on the homes of wealthier Britons. 

Watch the programme in full here - and watch clips of Darren on our Twitter feed! 



And on our blog this week, the IEA’s Chief Operating Officer Andy Mayer looks back at the history of the “mansion tax”.

Andy argues the tax is fundamentally flawed. It doesn’t factor in debt, can only take little account of earnings or pay, and will serve to complicate our tax system even further. Any bespoke “mansion tax,” Andy concludes, would be “principally a political gesture”. 

A shining example

Also on our blog this week, author Neil Monnery highlights the success of Hong Kong - a once “barren island” that became a shining example of free-market policies delivering human progress and prosperity.

NH-Mess...

The NHS is commonly cited as a unifying force, treated with almost “quasi-religious reverence,” but as the IEA’s Head of Political Economy Dr Kristian Niemietz writes on our blog, a unifying institution can quickly turn into the exact opposite and become deeply divisive. 



You can read Kristian’s book 'Universal Healthcare without the NHS' here.

African dawn...

Back in 2000, The Economist magazine described Africa as the “hopeless continent”, adding that the “new millennium has brought more disaster than hope to Africa.” 

But the 54 countries that make up the continent have some of the youngest and most vibrant populations in the world, accounting for over 17% of the world's population. 

The last 20 years have seen life expectancy and literacy rates shoot up and child mortality plummet, especially in sub-Saharan Africa. 

What has driven these changes, and can the momentum be maintained over the next 20 years?   

In our podcast this week, IEA Head of Communications Emma Revell discussed Africa’s new dawn with Alexander Hammond, Policy Adviser to the Director General at the IEA. 

Listen here.

You can subscribe to our podcasts on Apple Podcasts, Spotify and Podbean.

Calling all teachers
 

How best to measure an economy’s success?

The IEA is to host two upcoming events for teachers, examining the ways we can measure economic success - including GDP, growth, productivity and inequality.



Aimed at teachers of economics and related topics at A-Level/IB/Scottish Higher, the events will include talks from IEA Economics Fellow Julian Jessop and our Head of Education Dr Stephen Davies.

Our next event will be held on 10th March, 09:45 - 14:30  at the University of Buckingham.

Register here.


 
If you’d like to reserve a place, follow the links above or email Ralph Buckle at [email protected]. Please also include the name of the school you teach at.

You're invited!

In Conversation with Ted Malloch

On 26th February, 6-8pm, the IEA Book Club will be hosting Ted Malloch, co-author of “Trumps World: GEO DEUS” to speak to us about his latest book. The discussion will be chaired by the IEA’s Director General Mark Littlewood.

The book takes you inside Trump’s presidency – examining his populist outlook and his approach to such matters as foreign affairs. It seeks to identify his primary motivations, and how they influence his political thinking his economic model, and more.

If you would like to know more about the IEA Book Club, and attend the event, please email [email protected]
 

In conversation with John Humphrys 

Former BBC veteran John Humphrys will be our special guest for a forthcoming IEA Book Club event.

John – who hosted Radio 4’s Today programme from 1987 until last year – will join us to discuss his fascinating memoir, A Day Like Today, in which he looks back at his remarkable career, reflects on the politicians he interrogated and weighs in on the role of the BBC.

The event will take place from 6 to 8pm on Monday, 9th March here at the IEA and places are sure to be in much demand. If you would like to attend please email [email protected]

You can also find out all about the IEA Book Club – which brings you year-round invites to exclusive events with top authors here.