In this Institute of Economic Affairs podcast, Callum Price, Director of Communications, is joined by Dr. Kristian Niemietz, Editorial Director, and Daniel Freeman, Managing Editor, to discuss Rachel Reeves’ latest budget. The conversation examines whether the government has abandoned its growth agenda after the OBR stated that none of the budget’s policy measures would have a material impact on potential output. They analyse the government’s approach to economic growth, comparing it to someone who says they want to learn Italian but never takes any steps towards achieving that goal.The discussion explores how the government has increased the total tax burden by £70 billion over two budgets, bringing Britain to the highest tax take as a portion of GDP in its history. Daniel and Kristian break down where this money is going, particularly the £16 billion increase in welfare spending by the end of the decade, and how income tax freezes and national insurance changes are funding this expansion. They examine the unusual political timing of imposing new taxes right at the end of a parliamentary term while most departments face real terms cuts, creating a situation where the government seems to lack a clear sense of what it’s trying to achieve.The podcast concludes with an analysis of Britain’s highly progressive tax system and its impact on productivity growth. They discuss how the UK’s tax progressivity creates an illusion that public spending can be funded by a small number of wealthy individuals, when in reality a Belgian-sized public sector requires Belgian-level taxes on average earners. The conversation covers how punitive high-end taxation, combined with wage compression from minimum wage increases, has contributed to Britain’s dismal productivity growth of just 0.6% annually since the financial crisis, compared to over 2% before 2008. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe
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Lord Frost: "The Government Kicked the Country in the Teeth"
In this Institute of Economic Affairs video, Lord Frost, incoming IEA Director General, delivers his immediate reaction to Rachel Reeves’ first budget as Chancellor. Lord Frost examines how the budget pushes Britain’s tax burden to its highest level in history - 38.2% by the end of this Parliament - surpassing even World War Two levels. He breaks down how the government achieved this through freezing income tax thresholds and what he calls a “smorgasbord” of small taxes that collectively raise significant revenue, from the extension of sugar taxes to milkshakes and lattes to Britain’s first national hotel tax.Lord Frost criticises the budget’s approach to sin taxes, pointing out that tobacco tax revenue has fallen by 40% between 2022 and 2024 as people find ways to evade the duties. He challenges the government’s spending priorities, questioning the effectiveness of ending the two-child benefit cap despite its multi-billion pound cost, and warns about the dangers of Britain now having one of the highest minimum wages in the OECD. He argues that while young workers may earn more, the real cost is felt in jobs that never materialise because employment becomes too expensive.The interview concludes with Lord Frost’s assessment that the budget continues Britain’s decade-long trajectory in the wrong direction. He argues that increasing tax, spending and regulation will not deliver prosperity, and calls for a fundamental reversal - cutting spending, reducing the tax burden, and deregulating to allow people to spend their own money. Lord Frost delivers a stark verdict: “What the country needed was the state’s boot off the neck of the country - instead, it’s given it a kick in the teeth.” This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe
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Budget 2025 Forecast: Why Rachel Reeves' Tax Plan Will Backfire
Read the full paper here: https://iea.org.uk/publications/2025-budget-briefing-tax-policy-preview-options-and-possible-impacts/With Chancellor Rachel Reeves set to deliver her Autumn Budget on Wednesday 26th November, IEA Economics Fellow Julian Jessop joins Managing Editor Daniel Freeman to discuss his new budget briefing paper. Jessop warns that the Chancellor faces a financial hole of up to £30 billion and will likely attempt to fill it through a combination of extending the freeze on personal tax thresholds and what he describes as a “dog’s breakfast” of smaller tax measures. While the largest component of the hole – around £20 billion – stems from a long-overdue downgrade to the OBR’s productivity forecasts, the remainder results from Labour’s own policy decisions, including abandoned welfare reforms and increased spending commitments.The discussion explores why attempting to raise £20 billion from numerous small tax changes is economically risky and likely to prove unreliable. Jessop argues that such a patchwork approach – potentially including higher Council Tax on expensive properties, closing Capital Gains Tax loopholes, imposing National Insurance on rental income, and increased sin taxes – creates greater uncertainty and unintended consequences than a simpler rise in broad-based taxes like income tax or VAT. He reveals that the government reportedly abandoned a “two up, two down” plan to raise income tax rates by 2p while cutting employee National Insurance by 2p, likely due to political concerns about breaching manifesto commitments rather than improved economic forecasts.Jessop makes the case that the root problem is spiralling public spending, which is forecast to rise by £200 billion over the next five years from £1,150 billion to £1,350 billion. He argues that simply restoring productivity in public services to pre-COVID levels could provide the same services for 4% less money, eliminating the need for tax rises altogether. The conversation also covers broader tax reform possibilities, including abolishing stamp duty and National Insurance, and why successive governments have failed to rationalise the VAT system despite cross-party agreement among economists that it’s deeply flawed. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe
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The 70% Tax Trap: The Government's Toxic Budget Predictions Revealed | IEA Podcast
We would like to apologise for the video quality issues that take place throughout the recording. This will be fixed for upcoming recordings.In this Institute of Economic Affairs podcast, IEA Managing Editor Daniel Freeman speaks with Kristian Niemietz and Julian Jessop about the upcoming autumn budget and Britain’s fiscal challenges. The conversation examines how bond market participants have become increasingly attuned to political instability, tracking everything from cabinet relationships to policy U-turns as indicators of fiscal risk. They discuss how competitive bond markets operate not on ideology but on risk assessment, and why claims of “bond market dictatorship” fundamentally misunderstand how financial markets work.The panel analyses Labour’s constrained position heading into the budget, caught between promises not to raise taxes on working people and the inability to cut spending due to backbench resistance despite a massive parliamentary majority. They examine various wealth tax proposals being floated, from mansion taxes to exit taxes on unrealised capital gains, explaining why international evidence suggests such measures consistently fall short of revenue expectations. The discussion covers the practical problems with revaluing council tax bands and the political toxicity of measures that would hit asset-rich but cash-poor homeowners.The conversation concludes with budget predictions, including the possibility that Labour might not just freeze tax thresholds but actually decrease them, potentially lowering the higher rate threshold to £46,000 and the additional rate to £100,000. This would create marginal tax rates exceeding 70% and hit millions more workers including senior nurses with higher rate tax for the first time. The panel debates whether the economic arguments can overcome the political toxicity of such moves as the Chancellor prepares for what they characterise as an economically and politically toxic budget. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe
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Free Speech is Not Right or Left | Jacob Mchangama | IEA Podcast
n this episode of the IEA Podcast, host Daniel Freeman sits down with Jacob Mchangama to explore the fascinating history of free speech, from ancient Athens to modern social media. Jacob reveals how Socrates became a martyr for ideas he didn’t even believe in, why the Romans feared giving ordinary citizens a voice, and how medieval Islamic scholars championed free inquiry while Europe burned heretics. The conversation traces free speech through the Enlightenment, examining John Stuart Mill’s warnings about the tyranny of the majority and how these debates remain strikingly relevant today.Jacob explains why free speech has become increasingly polarised along political lines, with both left and right abandoning the principle when it becomes inconvenient. From Palestine Action protesters arrested in London to Trump administration pressures on media critics, the discussion reveals how quickly the targets of censorship can shift. He argues that legal protections for speech are ultimately downstream from culture, pointing to how American free speech exceptionalism is surprisingly recent, noting that people could be jailed for Communist Party membership in the 1950s or opposing World War I.The conversation concludes with Jacob’s call for a cross-partisan coalition committed to robust free speech protections, regardless of who’s wielding power. As he emphasises, abandoning free speech because people you disagree with invoke it is a shortsighted strategy that inevitably backfires when you’re on the receiving end. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe
The Institute of Economic Affairs podcast examines some of the pressing issues of our time. Featuring some of the top minds in Westminster and beyond, the IEA podcast brings you weekly commentary, analysis, and debates. insider.iea.org.uk
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