In this Institute of Economic Affairs podcast, Maeve Halligan is joined by Dr Valentin Boboc, Chief Economist at the IEA, and Robert Armstrong, Director of the Institute for Free Trade.

This week, the discussion opens with the Conservatives’ Welfare That Works plan, which aims to cut £36 billion from a working-age benefits bill of £183 billion a year that is forecast to pass £200 billion by 2031. Is the target realistic, or will claims creep back up once people learn the new rules? The conversation examines the biggest proposed savings, from sickness and disability reform to restoring the two-child limit and ending access for foreign nationals, and asks whether a benefit card restricting spending on alcohol and gambling could ever be enforced. They also tackle the elephant in the room: pensions. With the combined welfare bill now roughly equal to all income tax receipts, can any party afford to keep avoiding the question?

The discussion then turns to Alan Milburn’s review of the more than one million young people not in employment, education or training. The panel weighs up the proposed youth allowance, personal employment advisers and Danish-style “flexi jobs”, and asks whether it makes sense to subsidise employers to hire young people while rising employer National Insurance and an equalised minimum wage make them more expensive to hire in the first place.

The discussion closes with HMRC’s growing powers to take money directly from bank accounts without a court order, alongside reports of officers visiting homes to value them for the new mansion tax. Given that 1.5 million people on a simple salary overpaid tax in 2024–25, can HMRC be trusted to act as both judge and enforcer? The panel considers whether the promised safeguards are adequate and how the reversal of the usual burden of proof fits a wider pattern of state paternalism.

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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Britain’s Welfare Trap | IEA Podcast