Issue: 4 December
2004 |
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| Gordon’s Swedish model
After watching the Queen’s Speech last week, I found it hard to
agree with the commentators who were insisting that the government’s
intention was to scare us out of our wits. We have indeed been given
reason to run screaming into our homes, but the threat is not the
government’s policy on security. No, what is truly alarming about
New Labour is the speed with which an entirely new policy agenda has
been launched by ministers, one whose effect on national life will
be infinitely more pervasive and damaging than having to carry a
piece of plastic in our wallets.
In a campaign of shock and awe, the government has, within the
space of three weeks, outlawed hunting, proposed a ban on smoking in
public places and restrictions on the promotion of fatty foods, and
set new limits on parents’ ability to chastise their children. Aware
of the danger that people might feel that New Labour is mutating
rapidly into Nanny Labour, No. 10 has come up with a new line. ‘This
isn’t nanny government,’ said Peter Hain in a rather nanny-ish tone.
‘It is about the progressive power of government as a force for
good.’
This is more than a new phrase. It has become a kernel of the
agenda for Labour’s third term. What’s more, at a time when we are
told that Gordon Brown is barely speaking to Tony Blair or Alan
Milburn, it is a line being used by all of them. The Chancellor
repeated the words ‘progressive consensus’ no fewer than a dozen
times in his speech to the Labour party conference in September.
Where the rest of us arrive at a consensus, Mr Brown prefers to
announce them in advance, as he did his consensus that a lavishly
taxpayer-funded state monopoly is the only way to deliver healthcare
in the 21st century.
Let’s be clear about what the ‘progressive consensus’ actually
means: an agenda for big, expensive and increasingly intrusive
government. It is dressed up, most persuasively by Alan Milburn, as
the means to enhance social mobility and extend opportunity. But
underneath its policy solutions are painfully familiar: state
diktat, higher spending and redistribution.
For an insight into where all of this is heading, it is worth
noting the comments of New Labour’s guru and inventor of the ‘third
way’, Professor Anthony Giddens, that there are ‘close parallels’
between the programmes of New Labour and Sweden’s social democrats.
And it is the suggestion that Britain might become the new Sweden
which should truly set alarm bells ringing in corporate Britain and
indeed in the home of any British taxpayer.
It might be possible to regard Sweden with a certain benign
affection. Many of its exports have been most welcome in Britain.
After all, this is the country which gave us Ulrika Jonsson, Abba
and Ikea furniture. Not only that, but Sweden has had the wisdom to
keep out of the euro, makes sensible cars and generally seems to be
a good thing.
There is, however, another Sweden. Setting aside its crime rate,
which is the highest in Europe, and its problem of alcoholism, both
feats which Britain is attempting to emulate, this is the mother of
high- tax nations. Sweden’s tax burden is an eye-watering 50.8 per
cent of GDP, compared with 35.3 per cent here and 25.4 per cent in
the US. Nearly £6 of every £10 in the country is spent by the
government. About 10 per cent of the Swedish workforce are on sick
leave at any one time.
But the Left in Britain has always become misty-eyed at the
thought that there might be a socialist, or at least semi-socialist,
enclave in the world that works. I can still remember Neil Kinnock’s
instant response when, as Labour leader, he was asked if socialism
had been successful in any country. Yes, he exclaimed: Sweden.
In fact Sweden has paid a heavy price for its generous welfare
state. In 1970 Sweden’s GDP per capita was the third highest in the
world; by 2000, it had fallen to 17th and is now lower than all but
five southern states in the US. Between 1980 and 1999, the gross
income of Sweden’s poorest households increased by just over 6 per
cent, while the rise in the US was three times as fast.
The brief intervention of a conservative government in the early
1990s introduced economic and public service reforms, including tax
reductions, which dramatically improved Sweden’s economic
performance, resulting in a period of better growth and lower
unemployment. But ironically these are policy lessons which New
Labour refuses to learn. Sweden has successfully introduced school
choice, but this has been rejected by our government. Under bold
Swedish health reform a quarter of patient visits are now with
private providers, but the Health Secretary John Reid has
arbitrarily declared that at the most 15 per cent of care may be
supplied by the independent sector to NHS patients.
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