#33 Unlicensed Premises
The right reflection on Rachel Reeves’ rental red tape rigmarole
Welcome to the 33rd instalment of the Liberal Digest. At the time of writing, Rachel Reeves looks like she’s safe in job – for now. Though the Chancellor admitted to not obtaining the requisite licence to let out her Dulwich home when she relocated to Number 11, it appears that the real villain of the piece was a – now former – letting agent who failed to apply for the licence despite saying they would. The old adage that rulemakers can’t be rulebreakers reigns more supremely than ever in Westminster, and opponents were understandably quick to call for Reeves’ sacking. But perhaps the moral of the story that Members of Parliament ought to learn from this saga is that all regulations have consequences, and they’re far from immune to getting caught up in them, and they thus deserve a little more scrutiny when being passed.
Meanwhile, Donald Trump and Xi Jinping met in South Korea to diffuse US-China trade tensions, and Javier Milei came up on top in Argentina’s midterm elections.
In this week’s edition: thoughts on founders, election extravaganzas, kings past and present, and lessons in deindustrialisation.
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Stop the Press!
Best op eds, interviews, news and analysis of the week in the old-school media
Martin Wolf says that Rachel Reeves’ first priority must be to get whatever growth she can:
“If there is to be a rapid and general upsurge in productivity, it will probably come from artificial intelligence. It is also inevitable that this will accelerate “creative destruction”, which happened to be the theme of this year’s Nobel Prize in economics. A great deal of the destruction will be of jobs. In response, the UK needs to get closer to Danish “Flexicurity”, by allowing businesses to fire, and supporting workers in their efforts to get new jobs. It should abandon efforts to make labour markets more inflexible: companies will not hire if they cannot fire.”
Will Lloyd makes the case for why the time is ripe to abolish the monarchy:
“If republicanism returns, it must talk in the frank, sturdy, moral language of the 17th and 18th centuries. It must condemn corruption and demand redress. It must fight the irrationality of the hereditary principle with its own forms of irrationality. “What is called splendour of the throne is no other than the corruption of the state,” wrote Tom Paine in 1791. “It is made up of a band of parasites, living in luxurious indolence, out of public taxes.” Those two lines are worth more than anything put to paper by a republican in Britain for 70 years. They also, given our experience with Prince Andrew, remain true.”
Stephen Pollard argues that Labour should take inspiration from Javier Milei’s approach to governing:
“[T]he clear message from Argentina’s electorate is that if you treat voters as grown-ups they will (at least sometimes) respond as grown-ups. Milei’s uniqueness as a politician is that he has point blank refused to play the usual game, especially rife in Argentina but played here too, of effectively bribing voters who don’t pay taxes with public spending paid for by people who do pay taxes – and of bribing everyone with spending on the never-never, which always ends up with everyone being worse off.”
Ryan Bourne points out that innovation can’t deliver growth with so much blocking its way:
“[T]here’s not really a significant trade-off between this “Smithian” growth and growth from innovation. Sure, there’s some competition for public funds. But most Smithian growth (especially through deregulation) is complementary to innovation. By removing planning barriers to physical development, you encourage specialist clustering of activity that helps foster breakthroughs. Most now admit China’s “learning by doing” is delivering cutting-edge technology in some sectors.”
The Economist says Javier Milei’s success in Argentina’s midterms shows the power of tough-but-coherent economic messages:
“Mr Milei’s spending cuts are perhaps the deepest and fastest ever imposed on a country through broad democratic consent. When he won the presidency, promising intense austerity, voters had not yet felt his chainsaw. Now they have: cuts so vicious that the only comparison is post-crisis Greece, where a troika of international institutions imposed austerity in the face of popular outrage. And yet the voters have backed him again.”
Hugo Gye explains why the Budget might not be the horror show many are expecting:
“Britain’s borrowing costs have fallen significantly. That has attracted much less attention than when they spiked earlier this year, a fact which has frustrated allies of Reeves who accuse the media and public of being addicted to bad news and ignoring good news.
Cheaper borrowing could give the Chancellor a direct Budget boost if the OBR takes it into account in its forecast of the economic and fiscal picture, a fresh draft of which will be delivered this week. Even if the OBR does not update its forecasts to encompass the latest data, the path forward for Reeves will be rather easier now that conditions are improving rather than deteriorating.”
Pedro Serôdio: Britain’s politicians are governing with a blindfold on
Elliot Keck: The Covid Inquiry has become an expensive farce
The Economist: The idolatry of victimhood
BBC: Starmer declines to rule out breaking manifesto tax pledges
The Guardian: The fall of Prince Andrew – a timeline
City A.M.: ‘Unprecedented’ number of small businesses expect to shrink or close down
Stacks of Freedom
Highlights from our fellow Substackers
Kristian Niemietz kicks off a new Institute of Economic Affairs series on a ‘British Afuera’:
Noah Smith draws the parallels between today’s era of strongmen and monarchs of years gone by:
Brian Potter documents the decline of Britain’s heavily unionised shipbuilding industry:
Andrew Neil blames quantitative easing for the rising tide of right-wing populism around the world:
Zion Lights discusses the rising trajectory of human health:
Josh Hendrickson invokes the work of Earl Thompson to provide an alternative lesson on guilds:
Matthew Yglesias gives the sizzlingly hot take that climate policy should reduce greenhouse gas emissions:
Wonk World
Ideas and analysis from the think tanks, academia and other clever sorts
Our own Eamonn Ives published research on how young founders think and feel about the current – and future – state of Britain’s startup ecosystem:
“While our entrepreneurial ecosystem has significant and hard-won strengths, we cannot afford to rest on these laurels. The voices of young entrepreneurs captured throughout this research project paint a picture of a country simultaneously brimming with immense potential but also one that risks being left behind due to policy drift and complacency, just as the next global economic transformation unfolds. None of the challenges identified by the Young Entrepreneurs Forum are insurmountable. Indeed, what is striking about many of the obstacles highlighted is how tractable they are. Unlike the decades-long investments required to build world-class universities, or the implicit trust needed to establish strong legal frameworks, all it would take to implement many of the reforms outlined in this report is a committed government which is cleareyed about the need to deliver a new policy settlement for Britain’s most ambitious founders.”
Centre for British Progress argue that burdensome procurement processes are preventing Britain from leading in neurotechnology:
“Compared to the US and European peers, the UK system is very onerous when it comes to device commissioning: the process through which the NHS decides whether to fund and make a treatment available to patients. After a device has been judged as safe and effective and received market access approval by the UK’s health regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), it must still pass another hurdle: a detailed cost-effectiveness review by the National Institute for Health and Care Excellence (NICE) that often requires additional study data. Until this step is completed, the device cannot be routinely funded or made available to patients through the NHS. This often causes long delays in access, even for proven technologies that may well end up proving to be cost-effective.”
An Institute of Economic Affairs report argues that the best way to boost birth rates and close the fertility gap is to deregulate:
“In the context of the United States, lower regulatory burdens – especially in labour and childcare markets – are robustly associated with smaller fertility gaps, implying that women in these regions are more likely to achieve their fertility goals (Piano and Stone 2024). Other research in Europe and Latin America suggests that religious leaders can play an important role.”
Hear Hear
Podcasts for weekend listening
Tim Leunig spoke to the Financial Times about how to kickstart the growth in Britain:
Our own Callum Price interviewed Javier Milei adviser Axel Kaiser on the Argentine President’s progress and midterm victory:
Posting to Policy
Best of social media this week
Kristian Niemietz: The NHS versus the planning system
Sam Dumitriu: Off licenses
Alec Stapp: Fair swap?
Christopher Snowdon: Energy hypocrisy
Helen Chandler-Wild: Unlikely causes of progress
John Arnold: Virtuous crime circles
Daniel Hannan: Elephants in the room
Further Afield
Interesting stuff from around the world
Donald Trump and Xi Jinping met for the first time in six years – and while no formal agreement was made to resolve trade tensions, a series of side deals were struck:
“China has agreed to suspend export control measures it had placed on rare earths, crucial for the production of everything from smartphones to fighter jets. This has been seen as a key win for Trump from his meeting with Xi. A jubilant Trump told reporters on Air Force One that he had also got China to start immediately buying a “tremendous amounts of soybeans and other farm products”. Retaliatory tariffs on American soybeans by Beijing had effectively halted imports from the US, harming US farmers - who constitute a key voting block for Trump. US Treasury Secretary Scott Bessent later told Fox Business that China had agreed to buy 12 million metric tonnes of soybeans this season, and would follow that up with a minimum of 25 million tonnes per year for the next three years. In the immediate aftermath of the meeting, the US also said it would drop part of the tariffs it has levied on Beijing over the flow of ingredients used in making fentanyl to the US. Trump has imposed severe tariffs on China, as well as Canada and Mexico, for their perceived failure to clamp down on the flow of that drug.”
American strikes on boats accused of running drugs to the United States continued, taking the cumulative death toll to at least 60 over the last two months:
“After the Pentagon announced Friday that it was dispatching an aircraft carrier to join the eight warships and thousands of troops already in the region, Maduro said the U.S. government was “fabricating” a war against him. Secretary of State Marco Rubio insisted the U.S. is taking part in a counterdrug operation, while also accusing Maduro’s government of allowing and participating in the shipment of narcotics. The U.S. military also flew a pair of supersonic heavy bombers up to the coast of Venezuela. President Donald Trump has said he has the “legal authority” to carry out the attacks on the alleged drug-carrying boats and suggested similar strikes could be done on land.”
Javier Milei emerged victorious in Argentina’s midterm elections, giving him a mandate to press on with his agenda after a financial market crisis threatened to derail it:
“Milei’s La Libertad Avanza party garnered 40.7 per cent against 31.7 per cent for the Peronist opposition alliance with 98.9 per cent of the vote counted, according to tallies using provisional figures from the electoral commission. The result came as a surprise after polling had suggested a close contest, with some polls even pointing to a small Peronist advantage. The alliance blamed what they termed a government scare campaign to deter voters from choosing their candidates. Turnout in Sunday’s election was 68 per cent, compared with 71.8 per cent in the previous midterm election in 2021.”
Reuters: Dutch centrist Jetten confident of forming government after far-right’s election setback
CNN: Trump says he’s increasing tariffs on Canada by 10% after Ontario’s Reagan ad
The Guardian: US Senate votes to end Trump’s global tariffs on more than 100 countries
CNBC: European markets end higher with Fed meeting, Trump-Xi summit in focus
Graph of the Week
