Economic Theory

IEA responds to Liberal Democrats’ manifesto

Commenting on the Liberal Democrats’ manifesto, Director General at the Institute of Economic Affairs Mark Littlewood said:

“Calculations of a “Remain bonus” fail to account for the dynamic changes that could take place in our tax system and regulatory structures, creating the right conditions for an economic boom post-Brexit.

“Rather than focusing on maintaining the status quo as the only way to generate growth, the Liberal Democrats should consider potential revenue-raising exercises – including cuts to corporation tax and reassessing red tape mandated by the European Union – which would help transform Britain into an even better place to do business.”

Commenting on the pledge to legalise cannabis:

“Criminalisation of cannabis in the UK has failed. The black market is awash with high-strength, hazardous products. The Liberal Democrats are embracing their name by calling for cannabis to be legalised, which would allow safer, regulated cannabis to displace the more dangerous strains.

If cannabis were legalised, tax revenues alone (before considering savings to public services) could exceed £1 billion per year. This extra tax revenue could be spent on mental health services, other spending pledges made by the Liberal Democrats, or indeed on tax cuts, to put more money back into people’s pockets.”

Commenting on further subsidies to childcare:

“Britain has exceptionally high childcare costs within the OECD because of heavy-handed government intervention. Red tape, especially around staff-to-child ratios, has burdened providers, and excessive regulation has forced some people out of working as childminders all together.

“The further subsidies proposed by the Liberal Democrats (and other parties as well) won’t tackle these regulatory burdens, but merely transfer more costs to taxpayers.”

Commenting on the pledge to put a penny on income tax for the NHS:

“Families are already paying, on average, thousands of pounds per year to access NHS treatment. The primary problem is not funding, but an outdated structure for providing healthcare, which fails to deliver for patients.

“The British public should not be expected to pay a penny more to cover up for a fundamentally broken healthcare system.”

Commenting on the pledge to introduce a 20% rise for zero-hours workers:

“Zero-hours contracts create flexibility for people whose lifestyles do not suit the traditional working week. Crackdowns on these contracts would reduce opportunities for individuals, as is the case in certain European countries, where rigid employment structures have resulted in worryingly high levels of unemployment.” 
Notes to editors:

For media enquiries please contact Emily Carver, Media Manager: 07715 942 731

For further IEA reading on regulation post-Brexit, click here.

For further IEA reading on cannabis legalisation, click here.

For further IEA reading on childcare subsidies, click here.

For further IEA reading on NHS reform, click here.

For further IEA reading on the labour market, click here.

The mission of the Institute of Economic Affairs 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 IEA is a registered educational charity and independent of all political parties