In this IEA Live event interview, Executive Director Tom Clougherty sits down with Lord Moynihan of Chelsea to explore the key themes from his two-volume work "Return to Growth." Lord Moynihan presents his analysis of what he calls "the three devils" preventing UK economic growth: excessive government spending, high taxation, and burdensome regulation. Throughout their conversation, they explore how the UK has moved from a position of economic strength to facing stagnant growth, with current GDP per capita growth effectively at zero.
Lord Moynihan offers a stark assessment of Britain's economic decline, arguing that the country has transitioned from a free market economy toward an increasingly extractive state system. He suggests that returning to policies similar to those of early Blair-era Britain, when government spending was around 30% of GDP rather than today's 45%, could help restore annual growth to 3%. The conversation delves into specific issues such as energy policy, employment regulations, and the challenges posed by Wagner's Law—the tendency of democracies to demand ever-expanding government services.
The discussion also explores broader cultural factors affecting growth, including the exodus of entrepreneurial talent from the UK and the psychological differences between "head" and "heart" decision-making that influence political choices. Lord Moynihan concludes with a sobering analysis of how difficult meaningful reform might be given the entrenched regulatory state but maintains that a shift in the Overton Window of acceptable political discourse could eventually create the conditions for change, similar to what happened before the Thatcher revolution of the 1980s.
The Institute of Economic Affairs is an 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.
Share this post