Andy Burnham is expected to use his first Labour Party conference leader’s speech this week to once again declare a break with the 40 years of ‘neoliberalism’. The Prime Minister is indicating a new social and economic model is on its way, though what shape that will take and how and whether it will actually deliver growth remain, to put it politely, murky.

But before we get to what’s next, it’s important to pause and figure out what Burnham actually means by ‘neoliberalism’. He often uses it as a pejorative strawman. That is, neoliberalism is simply defined as ‘what went wrong since the 1980s’, without any detail. This is a weak theory that ignores that, for significant periods over recent decades, Labour was in power, including with him in Cabinet. It also ignores that the size and power of the state have markedly increased, whether in spending or the regulatory state, which few could attribute to neoliberalism.

When used as a broad brushstroke to describe recent decades, therefore, neoliberalism is meaningless, both academically and for the public – who also have little sense of what the terminology actually means. But in a more concrete sense, according to Tom McTague’s recent profile in the New Statesman, he seems to believe it involves (1) centralisation in Whitehall; (2) deindustrialisation outside of London and the South East; and (3) privatisation of utilities and public services.

On the first point, it’s hardly neoliberal to want to centralise power; in fact, quite the opposite. In 2015, the IEA, an organisation often associated with ‘neoliberalism’, published Federal Britain: The case for decentralisation, arguing that the British state should devolve power to encourage experimentation, better matching of services to local preferences, and greater competition between providers of government-funded services. A key part of this has always been decentralising fiscal power, that is, linking local service delivery to revenue raising to ensure accountability, and putting downward pressure on taxes, something that Burnham has shown less interest in.

On the second, there is significant confusion and nostalgia around industrialisation. The reasons Britain has become less industrial are aplenty, from productivity gains that have allowed factories to make more with fewer workers, to rising incomes shifting demand towards services, to the opening of global trade that allowed Britain to specialise in what it does best further up the value chain – the likes of financial services, consulting, law, technology, and higher education.

None of these is a peculiarly British or Thatcherite phenomenon. Manufacturing’s share of employment has fallen across virtually every rich economy, including those rarely accused of neoliberalism: France, with its dirigiste traditions, has a manufacturing sector not much bigger as a share of its economy than ours. The decline in manufacturing employment also goes back much further, beginning in the mid-1960s. On the other hand, the state has tended to encourage deindustrialisation, with our planning system making it painfully slow and expensive to build a factory, industrial electricity prices the highest in the developed world, and Net Zero policies making Britain uncompetitive. Hardly neoliberalism to blame on all these counts.

There’s an interesting interrelated point here, which brings us to the third bogeyman, privatisation. The industrial model failed atop nationalised, loss-making industries that were kept afloat by the taxpayer, precisely the kind of state-directed model Burnham seems nostalgic to recreate – or is he? The British state didn’t just own water and the railways; it also owned the National Coal Board, Rolls-Royce, British Airways, British Telecom, and British Leyland, the carmaker that became the emblem of industrial decline and strikes. We don’t actually hear very much from Burnham about nationalising these particular industries.

Our latest City AM / Freshwater Strategy poll provides some interesting insights on this front. While a majority of the public supports renationalising water, railways, energy companies, local transport, and Royal Mail, the same doesn’t hold for much of the rest of the economy. Just 20% would support bringing airlines into government ownership, 15% want to see telecommunications in state hands like in the days of British Telecom when it took weeks to months to get a phone line installed, and even fewer, 13%, want a re-run of British Leyland.

When asked specifically about the aviation industry, a majority (53%) agree with the notion that competition between airlines has made flying cheaper and more accessible for ordinary people, while keeping service at an acceptable level; just one-third (33%) believe competition has been bad.

It’s a similar story in the telecommunications sector, where a majority (55%) back the concept that competition between mobile phone and broadband providers has made staying connected cheaper and more accessible for ordinary people, with 36% taking the opposite view.

The dichotomy here is interesting: the industries people are happy to keep in private hands are those perceived to be working best, benefiting from competitive market dynamics, and providing the most benefit to consumers over recent decades. This suggests that support for nationalisation stems from frustration with the status quo, rather than from any grand ideological attachment to the concept of a state, as in the past. It also means that, for those involved in these sectors, people want better outcomes as much as, if not more than, a change in ownership structure.

Whether Burnham likes it or not, we are not actually in a re-run of the 20th-century ‘third way’ dynamics that led to the earlier bipartisan nationalisations. A ‘real’ socialist would be disappointed here – a bit of talk about ‘more public control’ is hardly the same as putting the means of production into the hands of the proletariat. Burnham isn’t really proposing the end of neoliberalism, more like a bit of fiddling on the edges.

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• Economic Affairs columnist Matt Ridley on AI panic distracting us from the looming threat of another pandemic.

• Britain prospered in the 1980s because it stopped propping up failing industries. Nostalgia risks repeating the mistakes of the past.

• Why Zimbabwe should recognise its informal markets, not replace them.

• Lots of upcoming events - join us at the IEA soon!

An introduction from Economic Affairs editor Maeve Halligan

Another week, another set of public finance figures to make the Chancellor reach for the smelling salts. The Government spent more than it planned, borrowed more than it hoped and is now staring down an October Budget with all the enthusiasm of someone opening their credit card statement after a holiday. Still, with the Budget only weeks away, there's plenty of time to find the money down the back of the Treasury sofa…

Meanwhile at the IEA, Christopher Snowdon and I were both waxing lyrical about gambling. Chris took the House of Lords to task in The Critic for wanting to ban gambling ads on the basis of evidence they admit doesn't exist, while I argued in ConservativeHome that squeezing legal betting just hands the winnings to the black market and America. For a Government this short of cash, it's a curious bet.

In Economic Affairs, Daniel Hannan asked why we’re so misty-eyed about coalmining, reminding us that jobs are a means to prosperity, not an end in themselves.

And Rob Armstrong went looking for liberty in the Bayeux Tapestry, finding that the defeated Anglo-Saxons stitched a quiet protest into the Normans’ own propaganda. Proof, perhaps, that the English have always been good at losing gracefully while having the last word.

Matt Ridley is a science writer and a former member of the House of Lords.

Imagine an artificial intelligence making copies of itself... the first replicator assembles a copy in one thousand seconds, the two replicators then build two more in the next thousand seconds, the four build another four, and the eight build another eight. At the end of ten hours, there are not thirty-six new replicators, but over 68 billion. In less than a day, they would weigh a ton; in less than two days, they would outweigh the Earth; in another four hours, they would exceed the mass of the Sun and all the planets combined.

This is the fate we face, according to many. Notice, though, that the paragraph above is in italics. That is because I did not write it. It was written 40 years ago in a book published in 1986, and I have changed just one phrase, substituting “an artificial intelligence” for “a replicator floating in a bottle of chemicals”. The book was not about AI at all – it was about nanotechnology.

Engines of Creation was written by Eric Drexler and in it he coined the term “grey goo” to describe the fate of the world if self-replicating nanobots took off. Later he said he regretted the fear that his words sparked. Britain’s Royal Society, at the urging of the then Prince of Wales, wrote a lengthy report about the risk. Yet nobody now talks about nanotechnology in such apocalyptic terms, just as nobody says acid rain, ozone depletion, an imminent ice age or the Y2K computer bug are urgent existential threats. If you live as long as I have, you see many such scares come and go, and you become a tad cynical.

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An X account called Pessimists Archive, run by Louis Anslow, collects such cases. He recently pointed out that in 2026 “The New York Times cites seriously academics who say AI might end the world”, and in 1881 “The New York Times cites seriously academics who say telegraphy might end the world”. In the latter case, the paper opined that meddling with the earth’s electric currents by building telegraph lines might freeze Africa and turn New York into a tropical jungle: “such are the appalling results which, according to our esteemed scientific contemporary, are to follow the girdling of the earth with a continuous line of telegraph.”

At this point my more responsible friends remind me that the boy who cried wolf was eventually right, and there was a wolf. They also insist that AI is not like the other scares, and that this time is different. If I reply, “they said that last time, too”, it cuts little ice, and of course they have a point. At some point there may be a wolf.

But this is when I get even more exasperated, because my world weariness at promises of theoretical future calamity is matched by my bafflement at complacency about a current, urgent calamity. Why, when a wolf did suddenly descend on the fold, did the entire bien-pensant world dismiss it?

I am referring to the Covid pandemic. In my view, the evidence is now overwhelming that this began with a foolish experiment that went wrong in a laboratory in Wuhan –but even if you think that was only a small possibility, you should be really alarmed by the fact. If one virology experiment can kill 15 million people and do US$45 trillion of damage to people’s livelihoods, then why have we largely ignored it while obsessing over some potential threat from AI in the future? This point was brilliantly made recently by the celebrated venture capitalist Bill Gurley in a talk at the All-In summit in Los Angeles. “My p(2nd Covid) is way higher than my p(doom). And if their models are so ****ing smart, tell me what happened here.” To translate out of Silicon Valley-ese: we are facing a far greater risk of some virologist starting another pandemic than we face from AI. Yet nobody even wants to investigate, let alone prevent it.

Gurley summarised in devastating detail how, when an accident happens, we usually leave no stone unturned to try find out whether it was somebody’s fault. When a building collapsed at Surfside in Florida, when two Boeing 737 MAX aircraft crashed, when Hurricane Katrina overwhelmed New Orleans, when the Fukushima nuclear plant suffered meltdown, when the Challenger shuttle exploded – in each and every case, teams of investigators and journalists eventually found out that these were man-made disasters, not natural accidents. It took heroic determination to unearth the facts that, respectively, faulty design, faulty software, faulty levees, faulty flood protection and faulty cold resistance in the O-rings were the causes.

But in each of those cases, the teams of relentless “searchers”, as Gurley calls them, had to fight like tigers to overcome powerful “blockers” from corporate and (yes) regulatory bureaucracies that did not want to find the truth. Yet those five events were pinpricks compared with Covid-19. Speaking of Richard Feynman’s battle to find out what happened to the Challenger, when he was told he should try being nicer, Gurley said: “If you have to get through niceties and seek truth when seven people died, how are you supposed to behave when 15 million people died?”

In the case of the pandemic, the “blockers” performed their task with unfortunate success. They scared off almost all journalists, politicians, spies and lawyers by branding the lab leak a debunked conspiracy theory. As a result, it was left to a few self-funded amateurs to do most of the work finding out what happened in Wuhan.

We are facing a far greater risk of some virologist starting another pandemic than we face from AI.

Not only did Western authorities fail even to try searching; they did nothing to pressure Chinese scientists. There was no hint that collaboration should cease until they came clean about what happened, for example. There has not been a ghost of an attempt to improve the monitoring of what happens in virology labs in future. The opposite, in fact: the WHO was warning about the risks of lab leaks before the pandemic but has said barely a squeak since.

Yet we are all supposed to be engaged, dawn till dusk, in an obsessive debate about the vague – rarely specified – way in which AI might doom us at some rarely specified point in the future. Ah, say my responsible friends, but it is precisely through virology that AI might harm us. Imagine how much worse it will be when AI starts designing virus genomes! Maybe, but would it not be a good start to pay a smidgen of attention to what human intelligence can do and is doing?

“A lot has been said about AI x bio trigger events [alarming incidents at the intersection of AI and biology that could prompt tighter regulation] that should lead to increased regulation or oversight,” writes my co-author, the virologist Alina Chan. “Yet, roughly seven years since Covid emerged, the research pipeline that likely caused the pandemic is still legal to conduct outside of high containment without independent oversight.” To put it another way, we have just survived one shark attack and are swimming towards the shore in deep water, refusing to board life rafts, while discussing whether there might be a tiger where we land. a refighting of the economic culture wars of yesteryear worse than useless.

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Why can't Britain fix its pensions? Lord Hannan hosts the IEA Podcast with Kristian Niemietz and Christopher Snowdon on the case for replacing the state pension with compulsory private saving, and whether a funded system on the Australian or Chilean model could ever survive the politics, plus the "strange death of libertarianism", the fusionist alliance holding in Britain but breaking down in America, and the Lords' call to ban gambling advertising. YouTube

This week on Economic Affairs

News and Views from the IEA

This has gone far enough. Daniel Hannan, Director-General of the IEA, writes for the Daily Mail on why Britain, the nation that spent nearly two per cent of GDP a year hunting down slavers, is the only country being pursued for reparations. He argues that our diplomats' habit of indulging the demands has marked us out as a soft touch, and that we should treat them as hostile acts, with aid cuts, visa bans and sanctions to match.

Economists warn that Burnham’s capital gains tax raid would backfire, The Telegraph reports. Valentin Boboc, Senior Economist at the Institute of Economic Affairs, is quoted saying that a rise could be “catastrophic”, resulting in “panic-selling” before it comes in.

Making it dearer and harder to bet legally does not magically eliminate demand. Maeve Halligan, spokesman at the IEA and editor of Economic Affairs, writes for ConservativeHome on why Britain is missing out on the boom in prediction markets. She argues that regulations and heavy taxation simply push punters to the black market and across the Atlantic.

“The Government treats online betting and gaming as a cash cow to be milked rather than an industry to be nurtured.”

Healey accused of risking ‘market chaos’ as he considers allowing Budget headroom to shrink, the Daily Mail reports. Julian Jessop, Economics Fellow at the IEA, is quoted warning that letting the headroom shrink is “tempting but risky”.

“[This] could send a damaging signal about Healey’s and Burnham’s commitment to fiscal discipline at a time when markets are already on edge.”

The Lords want to ban gambling advertising without evidence that it causes gambling harm. Chris Snowdon, Head of Lifestyle Economics at the IEA, writes for The Critic on why the Lords' call for a ban on gambling adverts swaps evidence for the precautionary principle, when gambling participation has fallen sharply and problem gambling has stayed flat.

Education, Events and Opportunities

_{Food for Thought with Charles Goodhart and Manoj Pradhan}

On Monday, the IEA hosted the latest instalment of our monthly Food for Thought series, in collaboration with the Vinson Centre at the University of Buckingham. Charles Goodhart, the former Bank of England MPC member behind "Goodhart's Law", and Manoj Pradhan of Talking Heads Macroeconomics discussed their new book, The Unanchored Central Banker. They argued that ageing populations, supply shocks and rising defence spending have put public finances on an unsustainable path that democracies struggle to correct. The result is an era of fiscal dominance, in which central banks must balance fighting inflation against preventing financial instability, without fully achieving either.

_{Upcoming: Tower of Basel by Adam LeBor - Book Launch}

Join us for the launch of the revised and updated edition of Tower of Basel: The Shadowy History of the Secret Bank that Runs the World. The book examines the Bank for International Settlements, the little-understood “bank for central banks”, with two new chapters on its role in developing central bank digital currencies and what they mean for privacy and financial freedom.

Speakers:

• Adam LeBor, author and journalist writing for the Financial Times and The Critic

• Lord Hannan of Kingsclere, Director General of the IEA

When: Thursday 1 October 2026, doors open 18:00, discussion 18:30 to 19:30, followed by a drinks reception
Where: Institute of Economic Affairs, 2 Lord North Street, London SW1P 3LB

This event is free and open to all.

Register here

_{Upcoming: Adam and Eve by Jeffrey Archer - Book Launch}

Fifty years after his first novel, Jeffrey Archer launches his final standalone novel, Adam and Eve. It opens on Armistice Day 1918 with the birth of two children hours apart: one the son of a shepherd, the other the daughter of an Earl. Copies will be available to buy on the evening.

Speakers:

• Jeffrey Archer, bestselling author of Kane and Abel and the Clifton Chronicles, with more than 300 million copies sold worldwide

• Lord Hannan of Kingsclere, Director General of the IEA

When: Wednesday 21 October 2026, doors open 18:00, discussion 18:30 to 19:30, followed by a drinks reception
Where: Institute of Economic Affairs, 2 Lord North Street, London SW1P 3LB

Register

Among the most well-known facts about the Bayeux Tapestry is that it wasn’t made in Bayeux and that it’s not technically a tapestry. It was an obscure embroidery in Bayeux Cathedral for centuries until Napoleon exhibited it in Paris in 1803 in an attempt to whip up enthusiasm for his invasion of England.

By 1805 Britain had mustered 615,000 men into its standing armies, militias, volunteer corps, coastal fortifications and navy in by far the largest anti-invasion preparations made until the Second World War. For context, 300,000 garrisoned the Great Wall of China at its peak. The country was fully seized of the threat from Napoleon. Contingency plans were laid out in great detail: evacuation plans for George III depending on where the French landed. Orders were established for how and when the stock exchange would close, and how the London arsenal, foundries and stores would have their goods sent to the Midlands through the canals, where they would “use the final mainstays of sovereignty – treasure and arms – to keep up the final struggle”.

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This week, the proposal to replace the state pension with a system of compulsory private saving is up for discussion. Also on the agenda are the debate over the “strange death of libertarianism” and a House of Lords committee’s call to ban gambling advertising.

Could a funded pension system on the Australian or Chilean model ever survive the politics of “scrapping the state pension”? Reformers from Peter Lilley to Chile’s architects tried to reassure voters that existing entitlements were safe. The discussion then turns to Daniel McCarthy’s argument that libertarianism has run out of steam, weighing up whether free marketeers have really won the battles of the past, what has happened to the word “libertarian”, and why the fusionist alliance between free marketeers and conservatives is holding in Britain even as it breaks down in America. The discussion closes with the Lords’ case for banning gambling adverts despite the absence of any evidence of harm, and what the precautionary principle means for evidence-based policymaking.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

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Come and find our stall to say hello, find out more about upcoming events and pick up a copy of any of our recent publications.

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+ 120 SESSIONS, INCLUDING...

Suicidal empathy: is the West killing itself with kindness? • Women betrayed: should we smash the unions and start again? • NHS, Police, BBC… Is politicisation corrupting public services • WTF is Manchesterism and can it save the economy? • Anti-social Britain: why do we feel unsafe? • Puberty-blockers scandal: the ethics of clinical trials • Should we scrap the Equality Act? • Is it Islamism or is there a problem with Islam? • What’s the BBC ever done for us? • Will Reform be allowed to rule? Taking on The Blob with Danny Kruger • Finally Trumped: who’s the heir to MAGA? • Visas for all? Britain’s immigration scandal • Angry young women? The rise of the femosphere • Grooming gangs to the Nottingham Inquiry: untangling accountability • Does AI change everything?

And so much more - see the full programme HERE

SPEAKERS INCLUDE...

Claire Fox • Lord David Frost • Poppy Coburn • Maeve Halligan • Danny Kruger MP • Jacob Mchangama • Rosie Duffield MP • Emma Trimble • Lord Maurice Glasman • Andrew Fox • Stella Tsantekidou • Remi Adekoya • Ben Jones • Liam Halligan • Timandra Harkness • Tiffany Jenkins • Richard Johnson • Helen Joyce • Julie Bindel • Rosie Kay • Baroness Kate Hoey • Eric Kaufmann • Laila Cunningham • Catherine McBride • Munira Mirza • Lord Jack McConnell • Tom Slater • Mark Seddon • Josh Howie • Alan Miller • Steve Baker • Allison Pearson • Adam Wren • Kathleen Stock • Ameer Kotecha • Jake Wallis Simons • AND MANY MORE

According to the Office for Budget Responsibility (OBR), the Bank of England will lose us £288bn from autumn 2022 until its bond portfolio runs out in 2036. The Chancellor has recently approved wide-ranging changes to the way the Bank handles its bonds, in an attempt to limit the damage and defer some of these losses. The latest policy set out in the Chancellor’s letter of 17 September 2026 reminds us that, contrary to the widespread belief that the Bank of England (BoE) is independent and decides these matters, the Treasury still has most of the power.

In 1997-98, Gordon Brown made radical changes to the BoE. These changes are remembered chiefly for then-Chancellor Gordon Brown’s spin that he was making the Bank “independent”, whereas most of what he did stripped it of crucial powers over money, markets and banks. The power to issue new government debt in the market was given to a new body, the Debt Management Office (DMO), within the Treasury. The power to regulate the commercial banks and other financial markets was given to the Financial Services Authority (FSA). He also removed its powers of oversight over the money and bullion markets, and took away the executive powers of the Court of the Bank, making it a non-executive supervisory body.

In return he gave the BoE the sole power to fix the base rate and to provide independent forecasts of inflation and the economy. Even these powers were subject to an override, allowing the Chancellor to intervene in the public interest if necessary. Alistair Darling, like some other finance ministers, had to use this override to prevent extreme Bank of England tightening from bringing down even more banks. The Government sets the target that the Bank has to meet, and can change it, as Brown himself did when he switched from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI), a softer target.

His system unravelled in the banking crash, when the regulatory partitions he had created hampered both prevention and cure. The BoE and FSA blamed each other for the major failures of bank regulation. The Coalition government gave some powers over banking and financial market regulation back to the Bank, to correct Brown’s mistakes.

The crash itself led the Treasury and BoE to start quantitative easing (QE) to create looser and cheaper money and credit. The Bank bought up government debt at rising prices to bring down longer-term interest rates. This allowed the government to borrow more at affordable rates to pump-prime the economy. Shadow Chancellor George Osborne argued against it, claiming that this was money printing, which was bound to be inflationary. When he took over as Chancellor, he changed his view and embarked on further QE himself. He inherited £200bn of QE from his predecessor, Alistair Darling, and added a further £175bn in three tranches. Philip Hammond authorised one tranche of £70bn. At the time of the Covid-19 lockdowns, Rishi Sunak approved two tranches totalling £300bn, then added a third of £150bn when the recovery was well under way.

Each time more QE was proposed, the Bank needed the Chancellor to sign a letter of consent and an agreement that the Treasury (in effect, taxpayers) would pay for any losses arising from owning these bonds. Towards the end of 2022, nasty inflation was becoming embedded. The BoE and Treasury reversed the policy without conceding that QE had been inflationary. The Bank started selling the bonds back to the private sector, often at big losses. The Treasury, which had pocketed the profits on the way up, began paying out larger sums to reimburse the BoE.

Last week, the Treasury and the BoE finally realised that the scale of the losses under the bond-sales programme was unacceptable. The Chancellor has now authorised the Bank to hold to maturity the £120bn of longer-dated bonds carrying the largest losses at current prices, thereby avoiding big losses on sale. He has also said that, in principle, the Treasury will start buying the bonds the BoE wants to sell, rather than the Bank pushing them out to private buyers in the market, which might disturb prices more. This will, however, mean that the Government has to borrow more itself to pay for the bonds it takes from the Bank, so there will still be negative pressures on the market from Government actions.

“We lost the opportunity to lock in more cheap debt for longer.”

I have long warned of the damaging effects of these programmes. I supported the first two tranches of QE during the Covid-19 pandemic, when the Government locked down most of the economy and a strong offset was needed. I thought the third tranche was too much, however, and likely to prove inflationary. I tried to persuade the Government to borrow more of the money it needed for longer periods during the QE phase, as the borrowing rates on offer were clearly an artificial bargain. They insisted on continuing to borrow heavily at shorter maturities. We lost the opportunity to lock in more cheap debt for longer.

I have argued against the sale of bonds into the market under quantitative tightening (QT). I urged the authorities to do what the US Federal Reserve and the European Central Bank are doing: winding down their bond portfolios as the bonds mature, but not before. Instead, the BoE has sold large quantities at heavy losses, which the taxpayer has to pay. Private investors have benefited twice from the programme. They sold to the Bank at very high prices and can now buy back at much lower prices. The BoE has invaded fiscal policy by demanding money to cover its losses.

This is a sorry tale. We await the recalculation to see how much of the projected £288bn loss the Treasury and the BoE can avoid through the latest policy. The Chancellor’s letter makes clear this is not the sole preserve of an independent BoE but a joint policy that has gone wrong, with the Treasury and taxpayers picking up the bill and ultimately responsible. When I tried to persuade previous Chancellors to stop the sales and curb the losses, I was told that the Bank is independent. Yet it was ministerial signatures on the letters underpinning the whole policy that gave Chancellors every right to intervene, as the current Chancellor has now done. He needs to go further to curb the losses that are still being needlessly incurred.

Pity the poor taxpayer. Gordon Brown is the main cause of this: his badly judged changes to the regulatory system allowed the boom and the banking bust. This led directly to Darling’s Treasury inventing QE and setting up the taxpayer for losses. The Covid episode compounded the problem based on more wrong thinking by the Bank and Treasury. Since 2022, taxpayers have suffered needless harm because big losses have been taken on selling bonds bought at inflated prices at the peak of QE. Other central banks avoided extreme losses because they had no Treasury guarantee to fall back on. It is worrying that so many Chancellors signed all of this off without asking how much taxpayers might lose.

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The Conservatives are planning to reduce benefits for the long-term unemployed, and to replace normal payments with a ‘Back to Work’ card, worth only 70% of the standard rate, which would block spending on alcohol, cigarettes and scratch cards.

This is a revised and extended version of a scheme floated in the spring by Shadow Home Secretary Chris Philp. Back then the talk was of ‘ration cards’ for Universal Credit (UC) claimants who had been convicted of offences related to alcohol, gambling or drugs. These cards could not be used for gambling or alcohol purchases, or to obtain cash via ATMs. The scheme was seen as both a punishment and an attempt to alter behaviour.

The technology was to be based on an existing scheme, the Asylum Support Payment Enablement (ASPEN), which gives people in asylum accommodation the ability to make small purchases of food, clothing and toiletries. Asylum seekers can’t use the card for online purchases, telephone payments or overseas transactions.

The plan was more distantly related to the US federal Supplemental Nutrition Assistance Program (SNAP), which replaced earlier food stamp schemes and now gives around 40 million low-income Americans help with buying food via an Electronic Benefit Transfer (EBT) card.

Philp envisaged that up to 130,000 criminals a year would be issued with these ration cards in place of normal UC benefits. Spending on gambling and alcohol would be blocked, as would cash withdrawals which could be used for drugs, prostitutes or even weapons. There was an obvious appeal to voters in stopping benefit recipients spending taxpayers’ money on their addictions, and possibly limiting further offending by those convicted of violent crimes under the influence of drink or drugs.

However, complicated legislation would have been required to bring this about, and there would have had to be agreed sentencing guidelines (always difficult to achieve with our left-inclined legal profession). It would also have been necessary to monitor the scheme quite carefully to minimise obvious dodges such as using the scheme to buy goods which are then sold on to generate cash. In the US, it is claimed that only about 1% of SNAP users misuse it, far below the level under the old paper food stamps. But the criminal claimants the restrictions were aimed at might have been rather more inclined to game the system.

The Tories’ new proposal would hit people who have been out of work for six months but are otherwise blameless. On current figures, it would affect 350,000 people and save an estimated £540 million. It is reasonable, however, to express some scepticism about even this relatively modest saving. The proposal could be more costly to implement and administer than suggested, as the scheme would be nuanced by more favourable treatment of people who had paid tax in previous years and those with family responsibilities. Moreover, it seems only too likely that some claimants, faced with the prospect of cuts to out-of-work benefits, would try to switch to sickness benefits, recipients of which would be unaffected by the reforms. And these benefits, augmented in some cases by Personal Independence Payment (PIP), could be more costly than those they replace.

Anything which signals an attempt to tackle the ever-swelling welfare spend may do some good, of course. But is this the best way to go about it? Why not just cut out-of-work benefits after six months, rather than introducing an expensive new scheme to attempt control over what benefits are spent on?

What is perhaps more concerning than the new proposal itself is that, once this principle is adopted, it is only a small step away from rolling out spending restrictions across the wider claimant population. Would we really want this? To the neo-puritan mindset which seems increasingly to dominate the quangos and regulators which clutter up our economy and public life, it might seem that nobody on benefits, particularly, perhaps, those on sickness benefits, ought to be able to spend taxpayer munificence on alcohol or cigarettes. Or perhaps, as our ever-growing nation of nannies would have it, on ‘junk’ food.

In Nebraska, Utah, Indiana, Iowa and West Virginia, state administrators of the SNAP scheme have blocked the purchase of candy and soda; in Texas ‘sugary beverages’ are a no-no. Earlier versions of the food stamps programme were used to subsidise US-produced vegetables; the current scheme is still under the control of the US Department of Agriculture, notorious for being in hock to farm lobby groups. It is easy to see farming interests in the UK making common cause with medics and the fusspot tendency to try to alter the nation’s diet. What started as an attempt to control benefit spending could well morph into something rather different and less appealing.

Moreover, the use of ASPEN-style cards for benefits would have the incidental effect of further restricting the use of cash in the economy, giving the authorities yet more control over the population as a whole, and potentially undermining the economy’s resilience to external subversion and power cuts.

So this proposal, while it may appeal to the widespread wish to curb abuse of the benefit system, carries hidden dangers. It would penalise people who are not necessarily lazy couch potatoes, and certainly not criminals, unlike those targeted by the earlier proposal. And it is at best a diversion from the more important task of fundamentally reforming a welfare system which currently supports 10 million people of working age. What we want to hear from political parties is how they would deliver comprehensive reform, not flashy tweaks that would produce only trivial savings.

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Imagine an artificial intelligence making copies of itself... the first replicator assembles a copy in one thousand seconds, the two replicators then build two more in the next thousand seconds, the four build another four, and the eight build another eight. At the end of ten hours, there are not thirty-six new replicators, but over 68 billion. In less than a day, they would weigh a ton; in less than two days, they would outweigh the Earth; in another four hours, they would exceed the mass of the Sun and all the planets combined.

This is the fate we face, according to many. Notice, though, that the paragraph above is in italics. That is because I did not write it. It was written 40 years ago in a book published in 1986, and I have changed just one phrase, substituting “an artificial intelligence” for “a replicator floating in a bottle of chemicals”. The book was not about AI at all – it was about nanotechnology.

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Walk through Mbare Musika in Harare, or the Bulawayo Jobless bus terminus at six in the morning, and you will find a market that emerged without any council authorisation or even intentional private initative. Thousands of informal traders, including vegetable sellers, currency dealers, second-hand clothing wholesalers and cross-border transporters, have organised themselves into a functioning economic order complete with pricing conventions, dispute resolution, space allocation and mutual credit. It is one of the clearest live demonstrations of spontaneous market order operating anywhere in Africa today, and it deserves far more attention from free-market advocates than it currently gets.

Since 2023, COMALISO has conducted field interviews with informal traders across Harare and Bulawayo, tracking how they respond to a state that, when it isn’t taxing and harassing them, simply ignores them. What emerges is not chaos but institutional improvisation. Trader associations, often informal and sometimes registered as cooperatives, set and enforce norms for stall allocation that outperform municipal licensing schemes riddled with rent-seeking and delay. Currency dealers on Harare’s Road Port price the Zimbabwe dollar against the US dollar in near-real time, providing the public exchange-rate signal that the central bank’s official rate has long failed to supply. Cross-border traders moving goods along the Zimbabwe-Zambia-Mozambique corridor have built their own informal insurance and credit networks to manage risks that formal banks won’t touch.

This is Hayekian knowledge-use in its purest form. Dispersed actors, each holding fragments of local information about prices, risk and trust, coordinate without any central planner. It is also, more practically, a case study in what happens when a state’s formal institutions fail to deliver secure property rights, stable money or accessible dispute resolution: people build parallel ones instead. Zimbabwe’s informal economy is not a symptom of underdevelopment to be regulated away. It is evidence that market coordination persists even when the formal legal order actively works against it.

The policy lesson here is not simply “deregulate.” It is more specific than that. Formalisation efforts fail when they ignore the institutions traders have already built. Zimbabwean municipal authorities have repeatedly tried to relocate or license vendors into government-built markets, and these efforts have largely collapsed, replacing working, low-cost, trader-designed governance with expensive, top-down alternatives that strip out the flexibility the informal system depends on. It would be wrong to assume traders resist formalisation out of ignorance of its benefits. They are rationally protecting institutions that work better than what is on offer.

COMALISO’s advocacy, grounded in this fieldwork, argues for a different approach: legal recognition that codifies existing trader-association governance rather than displacing it, secure and transferable space-allocation rights modelled on what associations already enforce informally, and competitive energy and utility pricing that lets traders capture more of the value they generate instead of losing it to erratic, monopoly-priced services. None of this requires large public investment. The state need only recognise a market order that already exists, and stop actively undermining it through arbitrary raids, opaque licensing and currency mismanagement.

There is a broader lesson here for readers of Economic Affairs. Much of the free-market case in the developing world is made in the register of reform proposals: what governments should do differently. Zimbabwe’s informal traders offer the other half of the story: what ordinary people do when governments fail to do it at all. Their improvised institutions form a remarkably resilient system precisely because they emerged from repeated interaction and accountability among people who depend on getting it right. Free-market advocates in Africa and elsewhere would do well to study these bottom-up orders as seriously as they study top-down reform. They show what markets look like when built from first principles, under real constraints, by people with no other option but to make exchange work.

Zimbabwe’s formal economy remains in crisis. Its informal one, built entirely from the ground up, is succeeding in the meantime, and stands as a case study in liberal political economy.

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A few weeks ago, I went on a hike with some friends in the mountains in Colorado. The weather was perfect, the lakes and trees were gorgeous and we even saw a moose.

As I took in the views and breathed the fresh air, I also appreciated what has made hiking possible: industrialization. Hiking is often seen as a natural activity, but there’s nothing natural about it, and almost nobody did it before the industrial revolution.

There weren’t even words for it in English. According to Merriam-Webster, the word “hike” was first used as a noun meaning “a long walk especially for pleasure or exercise” in 1865. Google Books Ngram Viewer, which tracks word usage in English-language books beginning in 1800, shows that the words “hike” and “hiking” did not appear in writing with any kind of frequency until around 1900.

Before the industrial revolution, the great outdoors was most people’s workplace. They were out there from dawn to dusk in all kinds of weather, doing grueling manual labor, or else they starved. It was only the richest of the rich who could stay inside and partake in such hedonistic extravagances as eating a varied diet or learning how to read. Today we can enjoy the great outdoors because we do it on our own terms.

The Bangladeshi diaspora in the UK contributes an estimated $4 billion to the economy. Almost 90 per cent of the country’s ‘Indian’ restaurants are in fact owned by British Bangladeshis. The connection goes beyond the curry Britons eat, though, to the tea they drink and the clothes they wear. Bangladesh is the world’s second-largest exporter of textiles and garments after China, staking a serious claim to a $1.2tn global industry. In the modern world, such links matter more than geographical proximity. Using Britain’s familial and commercial connections to exploit the many import opportunities with Bangladesh ought to be making us very rich indeed. Why isn’t it? The answer is government failure on their part and policy failure on ours.

500 years ago the Bengal region was renowned for its exceptional wealth. When the region was governed by the Bengal Sultanate around 1526, contemporary European, Chinese and Middle Eastern travellers described it as an exceptionally rich place to trade. The economy peaked in the late seventeenth and early eighteenth centuries, when Bengal alone generated roughly 12 to 14 per cent of global GDP and provided half of the Mughal Empire’s revenue.

It was in Bengal that the East India Company laid its foundations, and later those of an empire that became the jewel in the British Crown. Historians have many theories about the region’s decline. Some point to the capital’s move from Calcutta to Delhi in 1911, followed by famines, both man-made and natural. The 1947 partition then split Bengal, and its eastern half was neglected until the violent 1971 war of independence, from which modern Bangladesh was born. Despite immense opportunity, foreign investment is extremely low, and has fallen a further 43 per cent in the last five years.

The best way to evidence Bangladesh’s Acemoglu-and-Robinson-grade institutional failure is through the lens of a private international company like mine. We had a subsidiary, Ocean Bangladesh Corporation, which identified potential gas reserves of over 20 trillion cubic feet in our acreage in Block 22 in the Chittagong Hill Tracts. That’s worth about $58 billion once extracted. Political instability, red tape and the occasional military coup have driven private companies like us to abandon this project and many others. Even bringing capital into Bangladesh faces barriers that are many times more costly in practice than bona fide capital control regimes found in the likes China. Millions of pounds a year are deterred by restrictions on investors moving their money back to the UK, or by heavy losses on currency exchange. At least capital control rules are clear and written down.

The Bangladesh Investment Development Authority (BIDA) is a chief culprit. It is a development office that is simply not designed to assist foreign companies. It, like its many equivalents in developing countries, functions as a facade. It was built as a promotion agency with a “One-Stop Service” bolted on, yet it controls almost none of the stops that matter. Land sits with the deputy commissioners, gas with Petrobangla and its subsidiaries, environmental clearance with a separate department, foreign exchange with Bangladesh Bank. BIDA can take your application but it cannot make anyone act on it, and perversely profits from doing the opposite. It is a textbook principal-agent problem. What it can do is host summits for the gratification of its own leaders. A decade of gala investment conferences and roadshows has produced a country of over 170 million people that attracted $1.78 billion of FDI in 2025, less than Uganda, and of that only a sliver was fresh equity: most was existing multinationals lending to their own subsidiaries because they could not get their profits out. In the first quarter of this year new equity fell by roughly 70 per cent. Readers of this Substack know investors do not need to be promoted to; they need clear rules, enforceable contracts, and the freedom to move capital and people in and out without begging.

On our end, UK Export Finance (UKEF) has an appetite for up to £2 billion of support in Bangladesh, and our own group received an expression of interest worth £650 million to develop a unique, British-patented technology for the transport sector in Bangladesh. However, unlike the Japanese JICA, which has a strong presence in Bangladesh, UKEF operated from India, with no physical support on the ground to secure contracts. In the way that business – and bureaucracy – is conducted in countries like Bangladesh, this functionally rules out all except the most ‘well-connected’ investment projects. The UK must avoid making the mistake of assuming business and government are done in broadly the same way there as they are here.

The Japanese, meanwhile, have committed a cumulative $33.62 billion in official development assistance and is Bangladesh’s single largest bilateral development partner. This funds infrastructure projects such as the Dhaka Metro Rail, the Matarbari deep-sea port and power hub, and other rail and transport schemes. The UK needs to adopt a model like JICA’s, tailored to improving trade and investment between the UK and Bangladesh. These depth of familial and historical ties warrant a proper political and trade memorandum, but too often, such efforts have been led by organisations with vested interests, or by NGOs that on many occasions have done more harm than good by ensuring that poverty of the mind remains the status quo.

More broadly, if we really believe in ‘trade not aid’, British development strategy ought to focus on proper infrastructure and reducing dependence on local or third parties, which means addressing corruption, nepotism and the opportunities needlessly lost to red tape.

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Why are we so nostalgic about hard, brutal and environmentally unfriendly jobs? Why do we, even now, complain about the Thatcher-era closure of steel mills, shipyards and, above all, coalmines?

The answer is, I think, cultural rather than economic. A colliery was more than a place of work. In a pit village, it was also the social and cultural centre. When the mine closed, the way of life it had sustained – allotments, a brass band, galas, sports teams, family days out – disappeared. Who wouldn’t want to preserve those things? Who wouldn’t regret their passing?

Forty years on, though, we should be able to see the economic shift in perspective. Do we really want to send men to do brutalising and filthy work underground? Breathing coaldust causes lung diseases, and miners often suffered, too, from conditions related to working with vibrating machinery, from hearing loss and from mesothelioma. Do the nostalgics think it would have been better, taking everything together, to have kept those mines open – whether from the point of view of taxpayers or of miners?

The wistfulness people feel when they look back at the era of heavy industry stems from the widespread belief that economic growth exists to sustain jobs rather than the other way around. The early 19th-century French economist Frédéric Bastiat called this fallacy “Sisyphism” after the mythical Greek tyrant who was sentenced by the gods to spend all eternity pushing a boulder up a hill only for it to roll back down each day. Bastiat asked acerbically whether, by their own logic, the Sisyphists would prefer barren farmland, since it would take more people to grow food on it.

In our domestic lives, we recognise the advantages of labour-saving technology. No one laments the work “destroyed” by their dishwasher. But extend the same argument to industry and many of the same people turn Luddite, fretting that automation makes human tasks redundant.

Similar concerns surface in every generation. “The idea that the utility and importance of an industry are to be measured by the employment which it gives to labour is so deeply rooted in human nature that economists can scarcely claim to have taken the first step towards its eradication”, wrote the Canadian mathematician Simon Newcomb. That was in 1893. Today, the first step has still not been taken.

What the economist Bryan Caplan calls “the make-work fallacy” seems to be hardwired into our genome. In the late 18th century, there were widespread fears that mechanising agriculture would destroy jobs and turn farm-workers into vagabonds. These newfangled “manufactories”, clever men averred, would never employ enough people.

In the late 20th century, the same argument was applied to services. The “real” jobs, we kept being told, were in manufacturing. What were all the former factory-workers going to do? Cut each other’s hair? Flip burgers? Now, in the 21st century, the bogeyman is AI. And yet, every time, people end up being released from tougher jobs into better ones, and living standards rise.

Two hundred years ago, 95 per cent of working adults were engaged in food production. They had to be, or the world would have starved. Now, that number has fallen to 3 per cent. What happened to everyone else? Did they, as predicted, become an army of hungry vagabonds? Of course not. They were released to produce things that no one had previously dreamed of: pharmaceuticals, cars, life insurance, video games.

Yet, at every turn, people have decried technological advance, insisting that the jobs they remember from their childhoods are somehow more genuine than newer ones. The fallacy that makes us nostalgic for coalmining also makes us want to hang onto what is left of heavy industry and makes us fear intelligent machines.

During the 1980s, Britain went from being a poor, indebted, strike-ridden country, with fixed wages and prices and double-digit inflation, to being the most successful economy in Europe. That shift did not just happen. It took place because the Thatcher government stopped misallocating resources, allowed unsustainable industries to give way to profitable ones, and stood aside to permit innovation.

Yes, that process was painful. But how many coalminers of that era would want their grandsons to have jobs like theirs?

Today’s children are unlikely to have “a job” at all, at least not as we understood that word in the 20th century. Rather, they will find themselves constantly freelancing, retraining and adapting. Yet they will know riches that their grandparents could barely have imagined.

Jobs are not an end in themselves. They are a means to an end – that end being greater prosperity. If we can enjoy a higher standard of living while working shorter hours in less demanding jobs, so much the better. And, believe it or not, this is what has been happening these past two centuries, as the proportion of our lives spent at work dwindles and our living standards improve.

“Wealth increases as the ratio of results to effort increases,” wrote Bastiat. “Absolute perfection, whose archetype is God, consists in the widest possible distance between the two”. Tout à fait, Frédéric. Tout à fait.

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Central banks have rarely had more influence over our lives, and the institution that connects them is among the least understood in global finance.

The Bank for International Settlements, founded in 1930, is the bank for central banks. It sits beyond the reach of any national jurisdiction, and it is where the world’s monetary policymakers meet, co-ordinate and set much of the research agenda that shapes decisions elsewhere.

In a revised and updated edition of Tower of Basel: The Shadowy History of the Secret Bank that Runs the World, Adam LeBor examines how the BIS works and what it has become. Two new chapters cover its role in developing central bank digital currencies, and the questions these raise about privacy, civil liberties and personal financial autonomy.

To mark the launch, we would be delighted if you could join us for this free event, open to all.

Speakers:

• Adam LeBor, author of Tower of Basel. A former foreign correspondent for The Times, The Independent and The Economist, he now writes for the Financial Times and The Critic, and is the author of nine works of non-fiction.

• Lord Hannan of Kingsclere, Director General, Institute of Economic Affairs

Thursday 1 October 2026 at the Institute of Economic Affairs, 2 Lord North Street, London SW1P 3LB.

18:00 Doors open, drinks and canapés

18:30 Discussion begins, followed by Q&A

19:30 Discussion ends, drinks reception follows

We hope to see you there!

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I have never been fond of the term “demerit good”. It bestows the objective language of the economist onto something that is fundamentally subjective. Alcohol is supposedly a demerit good because of its effect on health, which would be fine if moderate drinkers didn’t live longer than teetotalers and if health were the only thing that mattered, but it isn’t. No decent economist would be arrogant enough to tell someone that the risks of heavy drinking outweigh their enjoyment of getting drunk.

In 2007, Alvin Roth coined the term “repugnant transactions” to describe the exchange of controversial goods and services. I prefer this to the term “demerit good” because what people find repugnant varies in time and place and the word “repugnant” more accurately reflects the fact that this is really a question of personal taste and morality. Roth’s argument was that repugnance can be an unhelpful constraint on markets. Moral opposition to the sale of live organs, for example, costs lives.

Roth’s new book Moral Economics expands on this theme. Opposition to repugnant transactions is often difficult to justify in logical terms. California’s ban on horse meat – one of Roth’s favourite examples – applies only to horse meat sold for human consumption. It is not illegal to kill a horse for other purposes, nor is it illegal to turn a horse into pet food. It is only illegal to kill a horse “if that person knows or should have known that any part of that horse will be used for human consumption.” It is not a question of animal rights or food safety. The law reflects nothing more than an irrational disgust.

Moral objections are usually framed as consequentialist objections, but further probing often reveals these to be hollow. Those who favour laws against incest (of whom I am one, fwiw) on the grounds that it can lead to birth defects are generally not prepared to make exceptions for family members who use failsafe contraception. Those who support laws against tobacco on the grounds that smoking imposes a cost on the health service seldom change their minds when it is explained that the net cost is less than zero. Those who, like me, support the criminalisation of child pornography on the grounds that it fuels demand for the creation of more child pornography, and thus child abuse, remain deeply uneasy (at best) about such images being generated by CGI or AI.

We are not, therefore, talking about market transactions that necessarily create negative externalities. Activities such as prostitution and dwarf tossing are consensual and have no direct spillover effects onto others, but are nevertheless widely condemned. At best, opponents of such behaviour claim that it leads to a general coarsening of society or can act as a ‘gateway’ to more dangerous activities. The latter claim can be tested with empirical evidence, and it does not seem to stack up. Studies have found that the legalisation of sex work, for example, is associated with fewer sexual assaults. Roth notes that the increased availability of child pornography on the internet does not seem to have led to an increase in child abuse. The rise of vaping has not led to an increase in cigarette consumption, as some feared, but has instead acted as a substitute.

An important theme in this book is that moral repugnance increases when financial payments are introduced. The use of economic incentives seems to be enough to transform a respectable and laudable activity into a grubby and disreputable sin. Soldiers fighting for their country are heroes while mercenaries are villains. Donating your kidney is moral whereas selling your kidney is repugnant. Adopting a child is good but buying a child is bad. In each case, the transaction is consensual (unless the soldier is conscripted, but that is still considered less repugnant than being a mercenary!) and yet the introduction of cash payments casts the activity in a very different light. This is often reflected in the law.

Why should this be? Close to the surface are old canards about “exploitation”, “coercion” and protecting the poor. It is unquestionably true that a peasant in India will be more likely to sell a kidney than a millionaire in Luxembourg. But if it is also true that such people have “no other option”, as moral reformers claim, would it really benefit such destitute individuals to remove their last option? When Spain banned dwarf bullfighting, it was the dwarves who came out to protest. It tends to be sex workers, rather than their clients, who campaign for the decriminalisation of prostitution.

Roth says from the outset that he intends his book to be “descriptive” rather than polemical, but he does make his feelings clear on certain topics. With regard to human egg donation, surrogacy and new reproductive technology, he writes that “we can best protect the rights and welfare of intended parents, donors, surrogates, and children in almost every case via laws that establish well-regulated legal procedures, rather than bans.” He is clearly in favour of having a legal market in human kidneys, an issue with which he has long been associated, and he opposes bans on the sale of human blood and blood plasma.

His argument against prohibition is essentially consequentialist. If bans create dangerous black markets, they can cause more problems than they solve. For this reason, Roth says that we should “reexamine bans that cause many deaths or lots of crime. That’s especially pressing for bans (such as prohibition of alcohol or current bans on drugs) that don’t even succeed at substantially limiting the banned transactions.” Fair enough, but that raises the question of what we should do if a ban did successfully prevent the banned transaction, and therefore remove the dangerous black market, or reduce it to a negligible rump. Would Roth then become a supporter of prohibition? The logic of much of this book suggests that he would, but that does not seem to me to be the right moral answer. At any rate, he does not justify it in either economic or moral terms. What about the welfare loss to those who want to consume the banned product but are no longer able to do so? Shouldn’t the utility of the individual count for something in a book about economics?

Despite recommending that we “reexamine bans that cause many deaths or lots of crime”, Roth also says that: “We aren’t winning the war on drugs, but neither can we surrender.” It seems, therefore, that he is prepared to tolerate quite a few deaths and plenty of crime. This is not an inherently reasonable position. We should not repeal laws just because some people break them. But deciding where to draw the line requires a moral framework, one that is not based on pushing people as far as you can before they break the law and certainly not one that is based on the often irrational prejudices of temporary majorities.

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Last weekend my beloved Chelsea got “mauled by the Tigers” of Hull City, resulting in a 2–2 draw. I would have liked to watch the game and share my amateurish views as a world-class pundit at my local, but alas, I couldn’t watch it.

The reason? It was played at 15:00 on a Saturday, during the football blackout.

For those unfamiliar with this particularly British form of sporting deprivation, the 15:00 blackout prevents any football matches from being broadcast on television in the UK between 14:45 and 17:15 on Saturday matchdays – including those in Europe or further east. A match which kicks off within the blackout window may, however, be joined in progress once the window ends. It is an odd situation. We live in a country where you can watch an English football match being broadcast to audiences across the world, while the English themselves are told: sorry, try again at 17:15.

The blackout is not a legal requirement imposed by the British Government. Rather, it operates under Article 48 of UEFA’s broadcasting regulations, which allows national associations to designate a period during which domestic football cannot be broadcast. In England, the Football Association enforces the blackout at the request of the Premier League and English Football League.

When a petition was submitted to Parliament calling for the blackout to be ended, the response on the 14^th of September was essentially: not our problem.

Parliament explained in response to another petition last year:

“It’s about something that the UK Government or Parliament is not directly responsible for.”

It continued:

“Decisions about when to hold and broadcast football matches are a matter for the FA, the Premier League and the Football League, and broadcasters, not the Government or House of Commons.”

Non-interventionism was hardly the view of the Government when it published its Football Governance Bill – the 112-page doorstopper that aimed to ‘redistribute’ football revenue. Still, government-sanctioned self-regulation in its own right can become a remarkably effective form of collective control. When an entire industry agrees on a restriction, it can have many of the practical characteristics of a monopoly. It is hard to see why the industry would choose a policy that costs it £200m a year in revenue, however. There must be more to it.

Blame Burnley

The blackout dates back to the 1960s, when Burnley chairman Bob Lord was fiercely opposed to football being shown on television. Lord was so resistant to broadcasting that he banned the BBC from televising Match of the Day from Turf Moor for a period.

He subsequently pushed the Football League towards adopting a broader policy restricting Saturday afternoon broadcasts. When a man nicknamed the “Khrushchev of Burnley” introduces a football policy, you know it probably deserves another look sixty years later.

The argument for the blackout is that televised top-flight football competes with lower-league and grassroots matches. If supporters can stay at home and watch the big games, they might decide not to go and watch their local club. This could damage the structure of English football that makes it more interesting and competitive than other leagues around Europe, and eventually make even those big games less compelling. I willingly pay money to stand in the rain and watch Wycombe Wanderers every week. So I agree with the goal. But this is not the way to achieve it.

The lower-league argument

The great thing about lower-league football is that it offers something television cannot. You can buy a reasonably priced ticket, travel a relatively short distance, go with friends or family, have a few drinks, complain about the referee and experience the game as part of a community. That is a fundamentally different product from watching a Premier League match on the sofa.

Economically, the relationship is also more complicated than a simple substitution effect. Removing the blackout would not mean that every person who watches a Premier League match at home would otherwise have attended a lower-league match. People have limited time and money, so changes in the availability and price of football can also create an income effect: if consumers can access more football at relatively low additional cost, they may consume more football overall rather than simply switching from one match to another. The deadweight loss from keeping the blackout in place, then, is larger than the simple substitution story suggests.

The football landscape of the 1960s consisted of fewer than a handful of channels. There was no streaming, no smartphones, no social media, no international broadcasting market and certainly no legal Premier League app sitting in your pocket. That broadcasting environment no longer exists. Depending on one’s attitude towards copyright law, finding an “unofficial” stream is not difficult. Black markets are a predictable response to restrictions of this kind. The Guardian reported 3.6 billion illegal streams of English football last season, while The New York Times called sports piracy in the UK “endemic”. This is a regulatory failure that will take decades to correct culturally.

Money talks

There may, however, be some light at the end of the tunnel. It has been reported that a decision on whether to retain the 15:00 blackout could be made before the end of the 2027/28 season. As television rights are negotiated for the next cycle, Premier League chief executive Richard Masters has suggested that the issue of Article 48 will be reconsidered.

“I’d say in about 18 months’ time we’ll come back to that decision about whether Article 48 should remain or not,”Masters said.

His comments came after the Premier League launched a new streaming service in Singapore, highlighting the increasingly global nature of the football broadcasting market. Perhaps that is where the future of the blackout will ultimately be decided: not by Parliament, not by UEFA, and certainly not by the ghost of Bob Lord.

The Premier League has built a global broadcasting business worth billions, and clubs, broadcasters and leagues have become increasingly sophisticated at selling football to audiences wherever they happen to be. At some point, it becomes increasingly difficult to justify telling the domestic consumer that the product they are helping to finance is the one product they cannot buy.

That does not mean the interests of lower-league football should be ignored. Quite the opposite. If the blackout is removed, the Football Association, Premier League and EFL might be able to provide greater financial support for lower-league clubs. Ultimately, that is what this was all about.

I am not asking for Chelsea matches to be beamed into every pub, living room and bus shelter in Britain at 15:00 on a Saturday. I am simply asking for the freedom to watch my team draw 2–2 with Hull City from the comfort of my local. Surely, after sixty years, that is not too much to ask.

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• Britain's benefits, pay and planning rules blunt the incentive to move to more productive regions

• The Capitalist Command Economy, a new discussion paper by Dr Christopher Snowdon

• Rising claims of incapacity due to mental ill health reflect the incentives built into the benefits system, not a genuine surge in illness

An introduction from Economic Affairs editor Maeve Halligan

The autumn chill draws in and another week draws to a close at the IEA. The upcoming Budget looms as UK inflation rose to a five-month high, putting renewed pressure on a certain Everton supporter to come up with a credible game plan.

A march organised by Extinction Rebellion (remember them?) passed 2 Lord North Street this week, and Kristian Niemietz was inspired by the bellowing soap-dodgers to reflect on how “Thunbergism became the high-prestige opinion” back in the mad old days of 2019.

On the IEA’s weekly podcast, Chris Snowdon offered a resolute takedown of the Government’s decision to crowbar more lentils into UK pupils’ school dinners, in a flimsy bid to tackle health concerns. His position, in the tradition of Marie Antoinette, might fairly be summarised as “let them eat turkey twizzlers!” Needless to say that, unlike the former Dauphine, Chris does not suffer revolution-inducing levels of economic illiteracy.

Elsewhere in Economic Affairs, Daniel Hannan prescribed a steady job as the optimal solution for the mental health issues that a record number of people in the UK are now reporting.

Professor Len Shackleton is an Editorial and Research Fellow at the IEA. This article is based on a talk he gave this week to the Beloff Conference organised by the IEA and the Vinson Centre at the University of Buckingham.

Britain’s rotten overall productivity record has many causes. One neglected feature is the difference between geographical areas. Gross Value Added (GVA) per hour worked is 50% higher in London than in the North East. It’s over 25% higher in the South East than it is in Wales. There are similar variations within regions. Take the North West: GVA per hour is just under 50% higher in the centre of Manchester than it is in Blackpool.

Higher productivity in an area reflects factors such as investment by businesses and the government, infrastructure, agglomeration economies, skill levels of workers and so on. It is, broadly speaking, associated with higher wages. Historically, this has led to workers moving from low-productivity areas to areas where productivity and pay are higher. This was a necessary feature of the Industrial Revolution, with workers moving from rural areas to the new factories and mines or helping to build the canals and the railways which snaked across the country to speed transport of goods and people.

This was facilitated by the breakdown of old legal restrictions on moving around the country. The Tudor and Stuart Settlement Laws had made it difficult for a workman to enter a town or parish in which he was not born. This was to keep down the costs of Poor Relief and to protect local time-served craftsmen from cheaper competition.

Nowadays such restrictions have gone, and people can move from town to town and from region to region. Yet relatively few do so. Only 1–2% of those of working age move region each year, with perhaps 2–3% moving between local authority boundaries in the same region. These numbers are markedly smaller than in the United States – where internal migration across the vastness of the country far outstrips anything we see here – and they appear to have been falling in the last twenty years or so. A third of Brits spend most of their lives within a small radius of where they were brought up, and 75% never leave their broad home region apart from holidays.

Low internal migration locks many people in work which is below their potential. One indicator of this is the number who are ‘overqualified’ for their jobs (their highest qualification being above the modal qualification for the role). On this definition, 22.3% of those employed are overqualified in the North East, compared with 18.4% in the South East and 18.7% in the East of England.

Graduates are a particular concern. Around a third of all graduates are currently in non-graduate jobs, and this proportion has been rising. There are considerable variations in the proportions by region. Graduate ‘underemployment’ is markedly higher in Scotland, Wales and the North East than in London, the South East and the East of England. An interesting finding from the Resolution Foundation is that these variations are associated with remaining in the same region as the university from which you graduated.

Why don’t more people – the young in particular – get up and go in pursuit of higher-paid jobs? If they did, they’d have better long-term career prospects, productivity nationally would rise and the economy would grow faster. Some put reluctance to pack their bags down to culture and attitudes, with love for place and staying near family and friends being more important to many people than material factors. There are differences between ethnic groups which tend to support this hypothesis: people of White, Black African and Chinese heritage are markedly more likely to move between regions than those of Pakistani, Bangladeshi or Black Caribbean heritage.

This may be reasonable, perhaps even admirable. But in deciding between staying and going, the scales are often tipped by government policy which alters the balance of incentives.

For example, having national pay grades for public-sector jobs distorts local labour markets. Take teaching, where the U3 point on the scale (the maximum level on the Upper Pay Range) in the North East is 144% of the median earnings in the region. The same point in Outer London (even including the OL allowance) is just 113% of local median earnings. In relative terms, you are much better off – and much more likely to be able to own your own home – in the North East rather than moving.

You can see the same effect with statutory minimum wages. The National Living Wage is 77% of median earnings in the North East, but only 51% in London.

Regions with low-productivity have high benefit dependency. National rates for benefits mean the ‘replacement rate’ (what you get in benefits relative to what you could earn) is high in low-productivity regions. Those on benefits are often in social housing. In the North East, there are 108 social homes for every 1,000 people; in the South East there are just 48. Somebody moving to London for work is likely to have to rent privately. Rent takes 55% of median earnings in London, as against 30% in Yorkshire and the Humber. While this isn’t the direct result of government policy, high rents in some parts of the country are the consequence of planning restrictions which have cramped housebuilding for many years.

“It's time to redress the balance by thinking about ways in which we can facilitate market-led movements between and within regions.”

At a subregional level, similar planning restrictions have delayed or prevented investments which would have facilitated easier commuting – for example the long-delayed Lower Thames crossing which would have opened up job opportunities in Kent to Essex residents, and vice versa. And government spending choices have prioritised improvements to already well-endowed London, such as the Elizabeth line, over revamping railways across the North, which might facilitate commutes from Liverpool to Manchester or even Leeds. Much-hyped subsidies to Manchester buses contrast with very poor bus services in many rural areas.

Different policy decisions could significantly improve mobility between and within regions, leading to higher average productivity. Although between the wars government policy actively sought to encourage movements of labour between areas, since 1945 policy has almost exclusively focused on ‘taking work to the workers’. Tax reliefs and subsidies have been used to encourage private-sector businesses to relocate to depressed regions, while government offices have been moved – recently the ONS to Newport, the Treasury to Darlington and now Andy Burnham’s Number 10 North. The record of this type of policy has often been poor. Jobs have been moved around, at least for a time, but productivity differentials haven’t changed much. It’s time to redress the balance by thinking about ways in which we can facilitate market-led movements between and within regions.

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Scrap stamp duty, scrap inheritance tax? Daniel Hannan is joined on the IEA Podcast by Kristian Niemietz and Christopher Snowdon, for a round-up covering the Bank of England's rate hold, the case for scrapping inheritance tax and stamp duty, new school lunch rules, and the return of Just Stop Oil amid growing net zero backlash. YouTube

This week on Economic Affairs

News and Views from the IEA

The Capitalist Command Economy

A new discussion paper by Dr Christopher Snowdon, Head of Lifestyle Economics at the IEA.

• The private sector is increasingly directed by the state towards non-economic goals such as net zero, diversity and behavioural change.

• This is neither socialism nor free markets: the Government doesn’t nationalise industries, but controls them so heavily they become de facto state agents.

• Manufacturers now face fines of up to £15,000 per petrol car and £500 per heat pump sold below state quotas.

• The minimum wage has risen from 50% to 67% of the average wage since 2010, now the fourth-highest in the OECD.

Read here

Britain suddenly looks precarious at home and friendless on the world stage. Daniel Hannan, Director-General of the IEA, writes for the Daily Mail on how forty years of elite contempt for British history have filtered out into the world and come back as hostility from allies and adversaries alike, and argues that the fix lies not in apology but in rebuilding old alliances such as Canzuk, mending ties with Washington and re-telling the story of what Britain actually did in the world.

"We are as alone as we were in 1940, but without the united resolve… No one respects a nation whose leaders struggle to celebrate its history. They’ll like us when we are strong again."

Britain's inheritance tax is among the harshest in the developed world, and free-market voices are calling for its abolition. Oliver Dean writes for ConservativeHome, quoting Paritosh Purohit, Junior Research Associate at the IEA, who argued in Economic Affairs this week that the tax is "arbitrary, distortionary and expensive to administer" and undermines Britain's competitiveness

Fried eggs are out, lentils are compulsory, and even a jam sachet cannot exceed 10g under Labour's new school-dinner rules. Christopher Snowdon writes for Sp!ked on how this latest instalment of Jamie Oliver's twenty-year campaign against school food reveals less about nutrition than about control, since a state that cannot yet police what adults eat is happy to start with children who cannot vote.

Wealth taxes are back in fashion, despite a long trail of European failures behind them. Kristian Niemietz, Editorial Director and Head of Political Economy at the IEA, writes for Quillette on why today’s campaigners’ “ultra-progressive” model would be even worse than the broad-based wealth taxes that Europe scrapped decades ago, since a narrow base means it cannot deliver the revenue or the fairness its supporters promise.

“One of the main reasons why wealth taxes are so popular is that their proponents vastly overstate the extent of wealth inequality."

Britain is quietly building a command economy, ordering private firms about without bothering to nationalise them. Christopher Snowdon, head of lifestyle economics at the IEA, writes for The Critic on the topics unpacked in his recent discussion paper The Capitalist Command Economy.

In this Institute of Economic Affairs briefing, IEA managing editor Daniel Freeman is joined by his colleague Dr Christopher Snowdon to discuss his new paper, The Capitalist Command Economy. They examine how the Government increasingly directs private companies to meet political targets, on heat pumps, electric vehicles, and food reformulation, while leaving them nominally in private hands.

Education, Events and Opportunities

The Beloff Conference

Over this past week, the IEA celebrated its long-term partnership with the Vinson Centre with our annual Beloff Conference. This year’s theme was Migration from an Interdisciplinary Perspective. Featuring speakers with backgrounds in history, political science, economics, and public policy, our attendees came from as far away as Brazil, Greece, and the Dominican Republic to discuss these ideas across three days of talks, panels, and deep conversation.

Kicking off with a Roundtable Discussion led by Dr. Steve Davies, our programme explored topics including Migration Patterns in Post-Communist Eastern Europe (Dr. Valentic Boboc), Representing Diaspora Communities (Rt. Hon. Steve Baker), Why People Migrate (Lord Syed Kamall), and the Cultural Perspectives of Migration (Prof. Eric Kaufmann), as well as a two-part comparative by Dr. Davies on migration in the Belle Epoque versus today.

The Beloff Conference is only one of many year-round events and programmes organized by the IEA/Vinson Centre partnership, including essay competitions, conferences, and speaker series. For those interested in getting involved in future events at the Vinson Centre, click here for more information!

The capitalist command economy gives politicians power without responsibility. The Government sets out its ambitions and tasks the private sector with delivery, but a system that places non-economic goals above productivity, and forces firms to focus on issues unrelated to their business, is unlikely to deliver economic growth.

This new discussion paper, by Dr Christopher Snowdon, Head of Lifestyle Economics at the IEA, argues that that Britain now operates under a form of ‘command capitalism’, in which private firms remain nominally free but are compelled by regulation, targets and price controls to pursue the Government's political goals rather than economic growth.

Read the report

Snowdon argues:

• The private sector is increasingly directed by the state through targets, regulation and taxation to pursue non-economic goals such as net zero, diversity and behavioural change.

• This system is neither socialist nor neoliberal, as the Government does not nationalise industries but instead subjects them to such heavy political interference, including price controls and quotas, that they become de facto agents of the state.

• Under the Zero Emission Vehicle Mandate and the Clean Heat Market Mechanism, manufacturers face fines of up to £15,000 per petrol or diesel vehicle and £500 per heat pump sold below their government-set quotas.

• Since 2010, the minimum wage has risen from 50% to 67% of the average wage, making the UK’s minimum wage the fourth-highest in the OECD, one of many examples of the state increasingly setting prices once left to the market.

The Institute of Economic Affairs invites you to the launch of its Alternative Budget, a fully costed programme setting out what a Budget built for growth could look like, ahead of the Government’s own Budget on 28 October.

This event, open to all, will feature a presentation of the IEA’s Alternative Budget followed by a panel discussion will exploring proposals on tax, spending and reform, offering a rigorous, pro-growth alternative to the Government’s approach. The panel will be chaired by Lord Hannan of Kingsclere, Director General and Ralph Harris Fellow at the Institute of Economic Affairs. After the discussion, the audience are invited to participate in a Q&A. A drinks reception will follow.

Rather than simply critiquing policy, this event sets out a genuine blueprint for serious economic reform, delivered by leading thinkers at a critical moment in the Budget debate.

Print copies of The Alternative Budget will be available to purchase on the evening.

Register to attend

Full Details:

• Speakers:

  • Lord Hannan of Kingsclere, Director General, Institute of Economic Affairs

  • Dr Valentin Boboc, Senior Economist, Institute of Economic Affairs

  • Further panellists to be announced

• Date: Monday 19 October 2026

• Timings: Arrival from 6.00pm | Discussion from 6.30pm

• Location: Institute of Economic Affairs, 2 Lord North Street, Westminster, SW1P 3LB

Places are strictly limited.

President Trump is struggling with an Iran war that will not end as he wants it to. He came out with a new offer to try to woo voters in the upcoming mid-term elections. The state will give every adult $5000 if they choose a Republican House and Senate again. The Democrats and the left this side of the Channel were outraged, and some immediately called it a bribe. Lawfare is now so often the left’s first resort, rather than their last. In this case, the question quickly became whether he could be prosecuted.

I am as strongly against bribery in politics as the left claim to be. Of course, no candidate or party funder should offer individual voters money in return for their vote, and it is rightly a crime to do so. It is also hard to see how such a scheme would even work in practice. Presumably payment would depend on proof, with the money only changing hands after a photo of the duly completed ballot paper had been seen, for example. people who were always going to vote for that candidate could claim the money anyway, while those reluctant to vote for them would have to commit a crime to collect it. Either way, it would guarantee nothing.

The left, however, are guilty of their usual asymmetry when it comes to tax cuts versus spending. To them, a tax cut in an election manifesto, whether for all taxpayers or for certain categories of them, is a “bribe”, while the offer of more free services, grants or benefits for preferred voter groups is not. The truth is that both left and right seek to win votes from large numbers of people, either by offering more public spending for their benefit or by promising less taxation. Indeed, the left is more prone to this mercenary approach. Their electoral strategies are often based on trying to create coalitions of different groups of people dependent on the state for services and benefit incomes.

In the UK, left-wing parties all offer more money and the recruitment of a larger public-sector workforce as they seek to expand what they think should be their very own voter base. Conservatives face less competition to represent the taxpayers, private-sector workers, savers and investors, the people who have to pay for an ever-growing state. But Conservatives also appeal to public-sector workers who want good management, quality and value for money in their workplaces.

It would be good to extend the Trump idea of a dividend or rebate, paid when a government has done well with the economy, to the provision of public services. The UK public sector today is too often clumsy, bossy and inattentive to good customer service. Bad surgeries see patients as a nuisance and seek to make it very difficult to book an appointment. Bad hospitals cancel operations at short notice, keep people wating in outpatient clinics and try to cover up clinical errors such as contaminated blood. Nationalised Network Rail causes too many delays and train cancellations. The Post Office wrongly prosecuted sub-postmasters and lacks a credible business plan to provide better services. Lib Dem and Labour highways authorities go out of their way to inconvenience the car and van drivers whose taxes pay for the roads, while delays and congestion are commonplace. Many public bodies demand you communicate through poor websites, under threat of prosecution if you do not follow their contorted required path.

Wouldn’t it be good if, alongside the productivity revolution we need within public services, there was a customer service revolution? Indeed, the two can work together. Having fewer mistakes and cancellations will reduce customer complaints and frustrations. Look after people well and get things right first time, and things become a lot easier to run.

The public sector should look at the model of the great supermarkets that sell us our food. They never run out. They stay open long hours so working people can also use them, where most public services shut down every evening and weekend. They work away at keeping prices down, offer discounts, promotions and loyalty schemes to make shopping cheaper. The public sector is always claiming it does not spend enough on provision and is always demanding more tax revenue or higher fees and charges. The food shops are very careful to avoid contamination and food poisoning, with high standards of hygiene and refrigeration.

So, what needs to change? How could the public sector regain the trust of its users by doing a better job? Why not offer a discount on council tax for prompt, reliable payment? Why not let people use Post Office counters to deal with government, for those who find websites too difficult or too hostile? And why demand annual re-registration for both the single-person council tax discount and the electoral register, when simply requiring people to report any changes would do the job just as well?

The Government claims to want more building and construction, yet planning delays and excess bureaucracy get in the way. Why not offer half-price planning permissions for applications that attract no objections? This would make it cheaper and faster to approve many applications where the neighbours have agreed and the wider community backs the project, while for larger schemes, it would encourage developers to offer compensation and consult in advance. Less contentious planning applications should be put on faster timetables. Larger and more contentious schemes should not require detailed studies of how local wildlife might need to adjust, unless a rare species at risk of extinction is involved.

Highways authorities should review their often extreme and excessive rules and controls to reduce the number of ways drivers can get fined. Speed limits should be realistic. Low limits should only apply in places and at times when pedestrians – especially children – could be at risk. Double yellow line control to stop parking blocking roads needs to be combined with more free parking nearby. Making parking payments should be easy, with machines accepting cash, card or app transactions. Offering free parking days in state or council owned parks near shopping centres would help promote High Streets.

“Meaningful change would also require new attitudes from the government and councils as employers. Staff should have fewer, clearer targets to hit, with bonuses paid for meeting them, and further bonuses for staff who come up with good ideas for improving quality and lowering costs. There should be far fewer managers, and instead a select few with real power to change how services are delivered and to mentor, monitor and promote good staff. Senior managers should be able to earn larger bonuses than at present, but should also know that poor performance will threaten their bonus or, in more severe cases, their job.

Where the state is levying a tax, imposing a monopoly charge or demanding a licence fee, its aim should be to make it as easy to pay and comply as it is to pay for another parcel from Amazon. It should not threaten you or treat you as a potential criminal unless you fail to pay or behave badly. Ministers should also exert tighter control over quangos, which should not be allowed to raise fees and charges without a strong case for doing so and a genuine offer of better service in return.

What a difference it would make if the state cared as much about taxpayers, licence applicants and service users as it claims to. It has much to learn from the customer focus shown by the best private-sector companies.

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On interest rates, the panel debate whether the Bank is right to hold steady given inflation driven largely by oil and petrol prices, and whether expectations of future rises are justified. They then turn to tax, weighing up the practical costs of inheritance tax collection against the principle of taxing unearned wealth, before broadly agreeing that stamp duty is one of the more damaging taxes to scrap first. On school food, they question the evidence behind new rules limiting pastry, breadcrumbs and processed meat, and argue the policy should be a matter for individual schools rather than national government. The conversation closes with a look at why Just Stop Oil and Extinction Rebellion protests have returned, and why net zero, once an unchallenged cross-party consensus, is now facing a growing electoral backlash as energy costs rise.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support to any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.