Happy New Year!
Plus: Welcome from the IEA's new Director General, Lord Frost
In today’s newsletter:
Welcome from our new Director General Lord Frost
Should we lower the drink-driving limit?
Venezuela: a new age of Great Power Politics?
Today marks the end of my first week as Director General of the Institute of Economic Affairs. I wanted to use our first Sunday newsletter of 2026 to say a few words about the precarious and unsettling moment Britain finds itself in, and crucially, the role the IEA must play in it.
Over the last couple of decades, the British economy has been characterised by an ever-growing state and increased intrusion by the government in everyone’s daily lives. As a result, economic growth has slowed to virtually zero, wealth creators are leaving the country, and Britain risks being outpaced by more dynamic competitors across the world.
The fundamentals of how a free market economy works no longer seem to be widely supported or even understood. It is perhaps not surprising, therefore, that so many politicians and commentators are happiest advocating economic ideas which are largely statist and collectivist in nature. Whether fantasy economics of the hard left, nostalgic protectionism dressed up as national renewal, or the complacent orthodoxies of the economic establishment, all these ideas share a mistrust of markets and a faith in ever-expanding state power, despite decades of disappointing results.
This is where the IEA comes in. For over seventy years, the IEA has made the case for liberty and free markets: for competition, enterprise, incentives, and limited government. That case needs to be made again - clearly, rigorously, and persistently - because too many of the fundamentals of a free society are no longer intuitively grasped by those shaping policy.
My priority as Director General is to ensure that the IEA continues to lead the battle of ideas: challenging bad economics, exposing the failures of statism, and advancing serious, credible alternatives rooted in freedom. At a time of economic drift and intellectual complacency, that task is not optional, it is essential. Come and join us, colleagues, supporters, and readers, as we take this work forward in the months and years ahead.
David Frost, Lord Frost of Allenton
Director General
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IEA Podcast: Director of Communications Callum Price is joined by Director General David Frost and Editorial Director Kristian Niemietz to discuss Britain’s failed economic ideas, and their predictions and wishes for 2026 — IEA YouTube
One Pint Driving Limit
Responding to the Government’s plans to lower the drink driving limit, Dr Chris Snowdon, Head of Lifestyle Economics at the free market think tank the Institute of Economic Affairs, said:
“We know that cutting the drink drive limit won’t work because it has already failed in Scotland. After the limit was cut there in 2014, there was no reduction in road accidents. It is easy to see why. Drink-driving accidents typically involve people who are well over the limit who will only be deterred by proper enforcement of the law, not by tinkering with the existing limit.
“Once again, the government is persecuting the sensible majority and pursuing its vendetta against the pub trade. Can’t it find something worthwhile to do?”
Head of Lifestyle Economics, Dr Chris Snowdon, interviewed by Peter Cardwell on TalkTV
Drivers facing one pint limit in major drink-drive law change, LeedsLive, Yorkshire Live
Major blow for pubs as Labour plots to hammer drivers with one-pint limit, Daily Express
Drink-drive limit set to be slashed in England and Wales under new plans to improve road safety, LBC
Drivers face one pint limit in major tightening of drink-drive laws with even lower level planned for novice motorists, The Sun
News and Views
Britain's failing economic ideas
This week is my first as the new Director General of the IEA. It has turned out to be one dominated by overseas news - Venezuela, Greenland, NATO, Ukraine. I don’t need to comment on the substance of any of this for one point to be clear: the relatively marginal position of the UK in these great international events. Yes, we have committed to troops on …
Britons Are Beginning To Admit It: Their Beloved National Health Service Is Broken, Head of Media Reem Ibrahim in Reason
The mere suggestion that marketized health care systems could provide better outcomes is no longer heresy. As is the case in every market, competition and choice allow for the most efficient allocation of resources. These systems empower patients with the ability and freedom to choose.
Inside Labour’s Economic Strategy: Supply-Side Vision & Political Reality | IEA Interview, Director of Communications Callum Price interviews Chief Policy Advisor at Labour Together Morgan Wild, IEA YouTube
How to make Venezuela great again, Research Associate Mani Basharzad in CapX
Foreign intervention can break that resistance and align outcomes with what people actually want, benefiting both Venezuelans and American interests. We do not live in a world of isolation. One foreign power defends Ukraine; another attacks it. One stood with South Korea; another backed North Korea. In a world where Russia, China and the Islamic Republic exist, my libertarian friends should understand that the United States should be the policeman.
US Military Strikes Venezuela: The New Age of Great Power Politics | IEA Briefing, Director of Communications Callum Price interviews Senior Education Fellow Dr Stephen Davies, IEA YouTube
Here lies your local pub, Head of Media Reem Ibrahim writes in CapX
If the Government truly wishes to reverse the decline of Britain’s high streets, and perhaps be allowed back into pubs, it will need to go much, much further. They must recognise that businesses across the country are struggling due to endless tax increases and regulatory restrictions.
British ¡Afuera! #2 - Higher Education
British ¡Afuera! is a new series of pieces applying the principles of the IEA’s ‘Sharper Axes, Lower Taxes’ and Argentinian ¡Afuera! to Britain today.
The Russian Economist Putin Wants Dead | IEA Interview, Managing Editor Daniel Freeman interviews Professor Sergei Guriev, IEA YouTube
How the UK Is Blocking Its Own Growth (And How to Fix It) | Shanker Singham | IEA Podcast, Head of Media Reem Ibrahim interviews Shanker Singham, IEA YouTube
Does Britain need a wealth tax?
On 2 December, King’s College London’s Politics Society organised a debate on the question of whether Britain needs a wealth tax. Former Business Secretary Sir Vince Cable and Prof Josh Ryan-Collins from University College London argued in favour; IEA Economics Fellow Dr Andrew Lilico and IEA Editorial Director Dr Kristian Niemietz argued against it. Th…
Britain’s Growth Crisis: The Model That Explains Everything | Patrick Minford, Editorial Director Dr Kristian Niemietz interviews Patrick Minford, IEA YouTube
Stop Taxing Christmas: How the Nanny State Ruined Mince Pies | IEA Briefing, Head of Media Reem Ibrahim interviews Head of Lifestyle Economics Dr Chris Snowdon, IEA YouTube
The IEA Reading List 2025
As the year draws to a close, and as everyone scrambles around for last minute stocking fillers for their brother-in-law, we asked the IEA’s team of experts to reflect on the books they have read this year that might just be worth your, or your sister’s husband’s, time.
Head of Media Reem Ibrahim appeared on The Mike Graham Show, YouTube
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A very interesting viewpoint. I happen to agree with the free market low tax and spend attitude. But I fear without a money supply that will never happen.
Entrepreneurship as you mention, is never going to get anywhere without a free flowing money net supply.
You politicians and economists alike tend to think that money makers given the rope to make profits will be our saviour. But increasingly we are told they are leaving in droves and taking their money with them!
We are also told that money makers, entrepreneurs, are wealth creators. But are also told they are wealth takers!
My view is they are both. They create ways to draw money to take out the system only to hold on to it. In do doing they, make the money supply devoid of exactly what is needed.
In my opinion, the ‘accountants’ way of two sided bookkeeping is as much as politicians can cope with. This inability to think in the round, to understand money has to flow back around and in what time, four dimensional thinking is lost on them. This has perpetuated in the ‘Thatcherite’ doctrine, wrongly Lorded by many since in a ‘household budget’ mentality of ‘cuts’ when the money isn’t there!
When, instead of cutting your cloth to suit the tax return, to cut government spending or to raise taxation or moreover, borrow the deficit, politicians should do what true money makers and entrepreneurs do week in week out, work out how the system can produce more revenue without borrowing or raising taxes (higher costs) or cutting spending (de-investing) which all three are a road to failure!
Any entrepreneur will tell you when the going gets tough, fuel up fire, don’t sit back and watch the business fail by cutting investment or borrowing to keep going or cutting investment! All of which are the signs of a weak business when all three are the norm.
No, you look at the goose that lays the golden egg and make it last more eggs faster!
In our economy that’s making us, the goose in this case, produce more tax revenue! And to do that you can’t raise taxes or cut investment or keep borrowing to lumber us all with more and more debt! NO!!!!
You politicians and economists must wake up and smell the coffee! You have to make the framework for everyone to earn and spend more as you very well say. That’s not the few at the very top. No. It’s everyone from the bottom up. You need to make the rules the laws the framework and model work not in two dimensions but, four!
So don’t look at Thatchers way or old economists who had no idea what a modern digital electronic age of money looked liked. That thinking is old out dated and obviously doesn’t work. Except for a few very rich who hold most of our money. Not wealth, money!
After 25 years of deficit borrowing on the markets, we see the result of that. The rich get richer whilst the poor get, yes, poorer. Just look! And see what that is going!! It’s giving the democratic powers of money supply to the few. Whilst the majority of us, are devoid of that money. That’s not fair but more importantly it’s not democratic!
Now, I’m all for free market success. Earn as much as you want or can. That’s what growth is. That’s what drives economies and that’s what makes us get up in the mornings.
But, unless that money returns to the pit to supply money to the rest of us how do you think my Lord, can we the majority of people, keep SPENDING to give the golden eggs of increased tax revenue?
You either can’t see it or don’t want to see it. Either way, it’s not good for us the majority. Unless you make sure that once huge sums of money go north upward in the food chain, a mechanism has to be in place to RETURN that money to the pot for us to fuel up the economy by making money flow in a three snd four dimensional way.
MS=R.
Money multiplied by Spending equals Revenue. And you know what revenue does? Yes, gives tax revenue, tax take to the government exchequer.
So if it needs more, you must increase first, the money supply to the pot. Make it available.
I suggest not by taxing those who have it all. That’s just highway robbery. No, let them enjoy SPENDING their money on goods or assets! Make the money flow back from it actually being SPENT on goods we all make! They then get the equivalent in return for their money earned. Be rich from the wealth of goods and assets they can buy with their money. That’s the economy! Not what we have now.
Whatever have now is a trickle. We need a tsunami flow of money back from their SPENDING. It’s not anything to do with money makers. It’s first to do with supplying the pot with freely SPENT money. Not debt ridden investments or debt borrowed money. But freely spent in exchange, money.
We can now, digitally put a spend by date on all or part of money. Make tax lie and make spending money the driving force. That’s how you get the best if all worlds. Do that, and everything else is cured. From potholes to higher wages. Great state pensions to happiness. Autonomous and perpetual spending. Of a vastly increased money supply. Make money move! That’s what a chancellors job is