Why Government Spending Never Goes Down | IEA Podcast

In this Institute of Economic Affairs podcast, Communications Director Callum Price is joined by Executive Director Tom Clougherty and Managing Editor Daniel Freeman. The conversation covers Andy Burnham’s vision for “Burnhamism” - his self-described “business friendly socialism” outlined in a lengthy New Statesman interview. They examine his proposals for mass renationalisation of buses, railways, energy and water companies, along with ambitious social housing programs funded through wealth taxes. The discussion also explores the Resolution Foundation’s latest tax proposals, including their suggestion to shift from National Insurance to income tax while raising overall revenue by £35 billion.

The hosts critically analyse Burnham’s economic agenda, questioning how his spending commitments could realistically be funded without broad-based tax increases on ordinary workers rather than just “taxing the rich.” Tom Clougherty highlights the mathematical impossibility of funding such ambitious programs through wealth taxes alone, noting that public spending has more than doubled in real terms since 1997. They discuss the growing chorus of voices, including the Institute of Directors and Resolution Foundation, now openly calling for income tax rises as fiscal reality sets in.

The episode concludes with an examination of the government’s proposed digital ID cards, branded as “Brit cards,” which Prime Minister Keir Starmer is positioning as a solution to illegal immigration. While acknowledging potential convenience benefits of streamlining government interactions, both Tom and Daniel express scepticism about whether mandatory ID cards will meaningfully reduce illegal working, given that other European countries with similar systems still struggle with larger black economies than Britain. They warn of the slippery slope toward an intrusive nanny state while debating whether voluntary adoption might be preferable to compulsory implementation.

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