IEA Conversations
Universal Credit: Good idea, badly implemented?

Universal Credit: Good idea, badly implemented?

April 18, 2019

Universal Credit has been dubbed one of the most radical changes to the British welfare system since the Beveridge Report, which proposed widespread reforms to the social welfare system, to tackle what he identified as five "Giant Evils" in society: squalor, ignorance, want, idleness, and disease. 

Since Beveridge, the welfare system has continued to morph; since World War II, we’ve added child benefits, housing benefit, tax credits… I could go on, the list kept growing. Many have argued that this has created a new series of problems – mainly that many people have been deterred from taking jobs, fearing that they would, in fact, end worse off than they were on benefits. A system designed to help people out of poverty has arguably become a poverty trap.

But given that the Trussell Trust is concerned about links between Universal Credit, financial hardship, and food bank use, is it time to scrap Universal Credit? Or does the programme have the right ideas, suffering from poor implementation?

Joining the IEA's Digital Manager Darren Grimes to discuss is the IEA’s economics fellow Julian Jessop and Patrick Spencer from the Centre for Social Justice - the think tank which can claim to be the brains behind the thinking behind Universal Credit!

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Online Harms

Online Harms

April 11, 2019

The Government took a swipe at global internet giants on Monday, suggesting rules that would require companies to proactively remove content the government views as illegal or “harmful,” and giving the government the right to block or even shut down offending sites.

As part of the Online Harms White Paper, a joint proposal from the Department for Digital, Culture, Media and Sport and Home Office, a new independent regulator will be introduced to ensure companies meet their responsibilities.

The proposals, contained in the 102-page white paper, are aimed at combating the spread of disinformationhate speechonline extremism, and child exploitation. If enacted as described, they would constitute some of the most stringent and far-reaching restrictions on internet speech by a major western democracy. Critics say the proposals fail to balance curbing harmful speech with free expression.

No matter how well-meaning, opponents of the white paper argue that the proposals to regulate the web could give the state the power to clamp down on the freedom of the press and free speech. Beggin the question: at a time when Britain is criticising violations of freedom of expression in states like Iran, China and Russia, should we really be undermining such freedoms at home?

It also means that the same rules that govern behemoths such as Google and Facebook – both of which have expert in-house legal teams and billions of pounds at their disposal – will apply to any website, however small or harmless, that allows users to post comments. Such regulations aimed at nudging the behaviour of tech giants may actually entrench their position as market leaders, by stifling innovation and competition.

Joining the IEA’s Digital Manager Darren Grimes to discuss is the IEA’s Victoria Hewson and the Adam Smith Institute’s Matthew Lesh.

The Gender Pay Gap reporting measures

The Gender Pay Gap reporting measures

April 4, 2019

The free weekly magazine for women, Stylist magazine, says “…women ask for the legislation. Women talk to their employers. Women do everything they can and, despite it all, the gender pay gap is getting bigger.”

In today’s podcast, IEA Digital Manager Darren Grimes is joined by Kate Andrews, Associate Director at the IEA. In a new IEA briefing, out today, Kate argues that mandated gender pay gap reporting (due on April 4 for companies with 250+ employees) produces misleading and inaccurate statistics.

Kate argues that the harvested data from the reporting measures illustrates how crude figures create a misleading picture, especially for companies that have hired large numbers of female staff into lower paid roles. She also argues that the reporting measures contribute to the narrative that women ‘are paid less than men’ - despite this statement remaining categorically untrue for many women in their respective organisation.

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The economics of renewables

The economics of renewables

March 29, 2019

Most agree that green energy has a huge role to play in the future – indeed, even now. But the debate around renewables and their ability to help tackle climate change rages on. In the US, President Trump faced mass backlash when he pulled out of the Paris climate agreement – yet recent figures suggest that reductions in carbon emission in the US have been greater than in any other developed country.

Here in the UK, the government has brought in a plethora of regulation to tackle the issue of climate change – but often these regulations are responsible for causing more bureaucratic problems than they are for solving environmental problems. Of course, customers bear the brunt of bad policy - electricity charges for households in England and Wales to have risen by 50 per cent in real terms since 2001, when the market moved from being relatively liberal to being significantly more restrictive.

Is it time for a rethink of the developed world’s approach to renewables? What is the best way to tackle climate change in 2019? Do we need a rollback of regulation, or should we be considering something like a carbon tax?

Joining the IEA's Digital Manager Darren Grimes, to help give some perspective, is our guest of the day Matt Ridley. Matt is best known for his writings on science, the environment, and economics and has written several fantastically successful science books, he recently gave the IEA’s Hayek Lecture on the crucial role of innovation in modern society, which you can watch here.

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75 years since ‘The Road to Serfdom’

75 years since ‘The Road to Serfdom’

March 21, 2019

75 years ago this month, Fredrick Hayek, the Austrian Economist recruited by the LSE, published his manifesto for a free and liberal society: “The Road to Serfdom.”

The book – or some might say the siren alert to the perils of socialism – was written in the evenings between 1940 and 1943, while he was acting as a war-time Cambridge fire warden.

Hayek and his publishers anticipated modest sales. Indeed, war-time paper rationing allowed it to be printed only in small runs. But the publication soon turned into a popular phenomenon

On today’s podcast, the IEA’s Associate Director Kate Andrews discusses why the Road to Serfdom became a huge success, and remains relevant to this day, with the IEA’s Research Fellow Professor Philip Booth and the Director of the Adam Smith Institute, Dr Eamonn Butler.

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Deal or No Deal: Is it time to tackle tariffs?

Deal or No Deal: Is it time to tackle tariffs?

March 13, 2019

On the morning of 13th of March the Government confirmed that it intends to eliminate 87% of tariffs on goods imported into Britain, but only if the UK leaves the EU without a deal, and only for an initial 12 month period. And, as we record this podcast, it looks very likely to be taken off the table on the evening of the 13th of March anyway, as MPs seem set intent on ruling out a ‘no deal’ Brexit.

Critics of any form of unilateral tariff reduction usually focus on one or more of three concerns: the risk to jobs, the threat to ‘standards’, and the potential loss of leverage in future trade negotiations. Many have claimed that UK manufacturing and agriculture would be ‘devastated’ by a flood of cheap foreign imports and that any reduction in trade barriers, unilaterally or multilaterally, are likely to cause job losses and that it will be incredibly painful for the minority who are adversely affected.

But does free trade necessarily mean you cannot compensate losers and reduce tariffs without lowering standards? And should our post-Brexit ambition be to eliminate the bulk of our remaining tariffs as soon as possible, deal or no deal?

Joining Darren Grimes to discuss is the IEA’s Economics Fellow Julian Jessop and Senior Counsel to the IEA’s International Trade Unit Victoria Hewson. You can subscribe to our podcast on Apple Podcasts.

The economics of football

The economics of football

March 8, 2019

27 years after the founding of the Premier League, it would be difficult for anyone to argue that it is anything other than a great success story. It’s the poster boy for a global, open, free-trading Britain. The beautiful game and the English league is an incredibly successful export business. But players’ enormous salaries, and transfer fees of hundreds of millions of pounds are variously described as obscene, ludicrous and even unsustainable. Each year the eyewatering amount of money spent in the business is not merely sustained, it zooms upwards year after year. 

In 1981 fewer than ten first division English footballers earned more than £175,000 a year. Now, the average player commands 15 times that. But there are many that long for the post-war era of English football - the so-called halcyon days of the game - when footballers were skint and players might have only received £10 as a signing-on fee from a transfer worth £35,000 to the club. Are they justified in missing the romanticism of the game? Or is this a bygone era best forgotten about in the age of hyperglobalisation?

Joining the IEA's Digital Manager Darren Grimes to discuss is Mark Littlewood, Director General of the IEA.

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Is Hayek more relevant than ever before?

Is Hayek more relevant than ever before?

March 1, 2019

In this week’s episode of the IEA’s podcast ‘IEA conversations’, the IEA’s Associate Director Kate Andrews sat down with Francis Boulle, who recently took part in the BBC Two’s ‘Mastermind’, braving the black chair to win the coveted Mastermind trophy.

What made this particular episode of Mastermind special was Francis’s choice of specialist subject for the interrogation-style question and answer session. Francis chose Friedrich Hayek as his specialist subject, one of the most important liberal thinkers of all time. He wrote not just about economics (for which he won a Nobel Prize), but also politics, psychology, and the history of ideas.

In the podcast Kate asked Francis to take him through his journey of becoming interested in Hayek’s work, why he decided to pick him as his specialist subject, if Francis believes Hayek is relevant in 2019 and how his body of work can help us navigate through our current political and economic woes – especially given that amongst young people socialism is now in vogue.

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How compatible is democracy with free market progress?

How compatible is democracy with free market progress?

February 14, 2019

Brexit has revitalized debates about democracy. Restoring democracy and sovereignty can come risk for those strongly committed to free markets — that our fellow citizens might choose another path, perhaps even one that could lead to socialist and freedom-hindering policies.

But is that a risk we must take? In a free society, what individual rights should never be infringed on? What should be voted on? And is there a place for technocratic decision-making?

In a new paper, the Director of the IEA’s FREER initiative, Rebecca Lowe, argues that one clear answer to ‘improving’ democracy here in the UK would be to institute a proper focus on local decision-making — something that, she says, has been overlooked in past years.

Rebecca joins the IEA's Darren Grimes to discuss, alongside Adam Bartha, the Director of EPICENTER, the European Policy Information Center.

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Countering Crony Capitalism

Countering Crony Capitalism

February 9, 2019

Davos, the super-exclusive annual gathering of the world’s political and business elite displays all the features of a petri dish for the spread of “crony capitalism”.

A tiny number of extraordinarily powerful individuals meet to discuss how the affairs of all seven billion human beings should be planned and co-ordinated. It represents an environment for the growth of regulation, intervention and enhanced barriers to entry for small businesses.

All too often what we see in criticisms of capitalism are actually examples of rent-seeking and corporations trying to game the system, which amounts to crony capitalism.

But has crony capitalism like that displayed in Davos become a catch-all term?

It no longer focuses purely on cases where cronies have prospered by taking advantage of political connections. Attacks on crony capitalism too frequently devolve into attacks on capitalism itself. In reality, the real ‘cronies’ are typically not CEOs. Rather they cut a sympathetic figure.

In many cases, crony capitalist outcomes are the result of lobbying from consumer groups. Take OfGem’s Non-Discrimination Condition which banned energy companies from charging consumers less in one region and more in another. It resulted in less competition and higher margins, hitting the poorest in society, hardest.

The challenge for free markets, and for capitalism, is manifold: the message is tarnished, the frames are poor, and, fundamentally, the moral case for what they achieve is missing.

On this week's podcast, the IEA's Digital Manager Darren Grimes is joined by the IEA’s Director General Mark Littlewood and the Director of the IEA’s FREER initiative Rebecca Lowe to discuss these challenges.