Debunking Wealth Inequality & Britain's Planning Crisis | IEA Podcast

In this Institute of Economic Affairs podcast, IEA Head of Media Reem Ibrahim is joined by Editorial Director Kristian Niemietz and Managing Editor Daniel Freeman. The conversation covers Labour’s recent budget announcements, particularly the decision to spend £48 million over three years hiring 350 additional town and country planners. They examine whether throwing more money and more bureaucrats at the planning system will actually solve Britain’s housing crisis, or whether the fundamental problem lies with the regulatory framework itself.

Kristian discusses research by Mark Pennington showing that between 1960 and 1990, spending on planning officers increased sevenfold while housing applications only increased by 28%, with a striking correlation showing that every 1% increase in planning expenditure resulted in a 1% decrease in housing output. The panel argues that Labour has become a last-minute convert to YIMByism without understanding the underlying issues, comparing their approach to Gorbachev’s attempts to fix the Soviet system by hiring more bureaucrats rather than addressing the fundamental regulatory problems.

The discussion then shifts to Kristian’s recent debate experience on wealth inequality, where he challenged the prevailing narrative that inequality is dramatically increasing. The panel examines the flawed methodology behind wealth inequality statistics, discusses Britain’s flat income inequality since the early 1990s despite having one of the most progressive tax systems in the OECD, and argues that what matters for the poor is economic growth and employment opportunities rather than the size of the gap between rich and poor. They also debunk myths about second home ownership in Britain, noting that only 3% of the population owns a second home compared to much higher rates in France and even the former Soviet Union.

Timestamps:

0:00 Introduction

0:47 Labour’s Planning Budget: Hiring 350 More Planners

4:07 Mark Pennington’s Research: 600% Cost Increase, 28% Housing Output

7:19 The 1930s Built Faster: When Planning Took 3 Days

8:04 The Gorbachev Approach: Why More Bureaucrats Won’t Work

10:34 Absurd Planning Cases: Disabled Child’s Bedroom Rejected

13:26 The Employment Rights Bill: Ditching the £118,000 Cap

16:29 European vs British Labour Markets: Flexibility Matters

17:21 700,000 Vacancies Disappeared: The Impact of Labour’s Policies

27:49 The Wealth Tax Debate: Conflicting Visions for Spending

31:01 Gary Stevenson’s Data Problem: Lived Experience vs Statistics

33:30 Why Wealth Inequality Data Isn’t Useless (The Weather Forecast Analogy)

35:00 Debunking Wealth Inequality: The Data Problems

36:17 Britain’s Progressive Tax System & Flat Inequality

37:23 China’s Billionaires & Poverty Decline: Growth vs Gaps

39:38 The Second Homes Myth: Britain vs France & Russia

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