This event marks the launch of the Institute of Economic Affairs’ new book, The Great Stagnation: Why Britain Stopped Growing. The panel is chaired by Daniel Freeman, Managing Editor and Deputy Editorial Director at the IEA, with opening remarks from Lord Daniel Hannan, Director General of the IEA, and Andrew Griffith MP, Shadow Chancellor of the Exchequer. The panellists are Tom Clougherty, independent policy advisor and former Executive Director of the IEA; Julian Jessop, Economics Fellow at the IEA; Julia Williams, co-founder of the Centre for British Progress; and Kristian Niemietz, Editorial Director at the IEA. Together they examine why UK growth per head has flatlined over the past two decades, and what might be done about it.
Andrew Griffith opens by setting out the scale of the problem, from record government borrowing to interest payments that now exceed the combined defence and NHS budgets, before making the case for lower taxes, deregulation and reform of employment law and judicial review. The panel then turns to the causes of the slowdown. Tom Clougherty argues that post financial crisis regulation choked off business investment and looks at how repeated spikes in marginal tax rates on capital have held back recovery, while Julian Jessop makes the case that neither austerity nor Brexit can explain Britain’s poor performance.
Julia Williams raises the risk that Britain is unprepared for the economic disruption of artificial intelligence, given how much of the economy depends on service sector jobs. Kristian Niemietz sets out his “defence of stupid growth”, arguing that the UK simply does not build enough homes, roads or energy capacity to sustain growth, whatever else it gets right. The discussion closes with audience questions covering tax on high earners, comparisons with Sweden and the Nordic countries, South Korea and the United States, and the effect of an ageing population on Britain’s growth prospects.
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