IEA Director General Mark Littlewood discussed the cost of living crisis, claiming that though the problem is significant, we are currently pursuing the wrong solutions on welfare. This is evidenced by the lack of effective change in actually reducing food poverty in the UK despite the soaring welfare bill in the past forty years. He commented that by focusing on wages and income transfers, we are not looking at the proper solution, which is to tackle government policy that has increased the cost of living. Mark instead suggested the removal of planning restrictions which would increase the housing supply in the UK, reducing prices and increasing the amount of land that can be developed in the UK. Also he suggested the removal of the Common Agricultural Policy (CAP) and taxes by the government on energy and heatiing.
These suggestions would enable the money spent in the in welfare bill streches further by reducing the cost of living. Furthermore, he suggested greater targeting of this welfare, as currently sixty percent of people are net beneficiaries who do not necessarily need it, which fritters away government resources. He suggested this could be done through such policies such as removing the free bus pass from wealthy pensioners.
You can listen to the full programme here. Mark's segment begins at 1:23:30.