Uploaded August 2026 | Updated September 2026, 2 weeks ago
Briefing: iea.org.uk/the-great-stagnation-briefing-5-tax
In this Institute of Economic Affairs podcast, IEA Managing Editor Daniel Freeman speaks with Tom Clougherty, Independent Policy Analyst, about Britain’s tax system and its role in the country’s growth slowdown. Tom has written a chapter on this subject for the IEA’s forthcoming book, The Great Stagnation: Why Britain Stopped Growing. The conversation covers how Britain’s overall tax burden compares internationally and historically, why the design of the tax system matters as much as its overall level, and why some taxes do far more economic damage than others.
Tom sets out a hierarchy of taxes from least to most damaging to growth, explaining why well-structured property taxes are the least harmful while stamp duty is, per pound raised, the most destructive tax in the system. He discusses why Britain raises more in property taxes than any other developed country while doing so in one of the most economically damaging ways possible, and makes the case for broadening the VAT base to fund cuts elsewhere. The discussion also covers the political reasons why the least damaging taxes tend to be the most unpopular, why governments have grown reluctant to make difficult trade-offs, and what a genuinely pro-growth tax system might look like, including a move towards a flatter income tax and lower taxes on investment.
The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.
Briefing: iea.org.uk/the-great-stagnation-briefing-5-tax
In this Institute of Economic Affairs podcast, IEA Managing Editor Daniel Freeman speaks with Tom Clougherty, Independent Policy Analyst, about Britain’s tax system and its role in the country’s growth slowdown. Tom has written a chapter on this subject for the IEA’s forthcoming book, The Great Stagnation: Why Britain Stopped Growing. The conversation covers how Britain’s overall tax burden compares internationally and historically, why the design of the tax system matters as much as its overall level, and why some taxes do far more economic damage than others.
Tom sets out a hierarchy of taxes from least to most damaging to growth, explaining why well-structured property taxes are the least harmful while stamp duty is, per pound raised, the most destructive tax in the system. He discusses why Britain raises more in property taxes than any other developed country while doing so in one of the most economically damaging ways possible, and makes the case for broadening the VAT base to fund cuts elsewhere. The discussion also covers the political reasons why the least damaging taxes tend to be the most unpopular, why governments have grown reluctant to make difficult trade-offs, and what a genuinely pro-growth tax system might look like, including a move towards a flatter income tax and lower taxes on investment.
The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.
