Gordon’s Swedish model
Instead, the government seems intent on importing the worst
features of the Swedish model to Britain: its prohibition of
smacking (introduced in 1979, as we elected Margaret Thatcher); its
partial smoking ban, which came into force earlier this year; and,
most damaging of all, elements of its welfare system. Sweden has the
world’s most generous system of universal childcare and enables
parents to be at home with their children for up to 16 months of
paid leave.
PricewaterhouseCoopers has estimated that the cost of the
government’s plan to move in the same direction could reach £8.5
billion per year by 2010. While Gordon Brown spouts platitudes about
the challenge from the Far East, taxes in Britain are already rising
to a 24-year high. And as our tax burden accelerates above the OECD
average and — incredibly — approaches that in Germany, our peer
group countries are cutting theirs, so eroding our competitive
advantage. The twin costs of poor public sector productivity and a
rising tax burden will inevitably retard growth and therefore living
standards over the long term. The cost will amount to £6,000 a year
foregone per person, or £14,400 per family, in 25 years’ time.
New Labour’s most successful policy was to give up political
control over interest rates and leave the job to people better
qualified to do it. But this lesson, like the brutal,
anti-politician message from voters in the North East who rejected
extra government in the shape of regional assemblies, seems to have
been lost on ministers. ‘I wish to celebrate and promote the role of
the state in family life,’ said the children’s minister, Margaret
Hodge, last week. ‘For me it’s not a question of whether we should
intrude in family life, but how and when.’ Mrs Hodge plans to begin
by advising every new parent how to read a book to their children
and limit the amount of television they watch.
Ministers may well be mistaken in calculating that interventions
like this will be popular. A recent ICM poll found that 71 per cent
of voters believe that the government is introducing too much
legislation which infringes personal liberty. Yet reaction from the
Conservative party to Labour’s progressive agenda has been curiously
muted, sometimes confused. The party has criticised the nanny state.
Yet it has also floated the possibility of giving tax relief for
childcare. Taking increasing amounts of money from low-income
households, churning it through government and offering it back in
the forms of tax credits, baby bonds or childcare support doesn’t
just entrench dependency and the role of the state: it is inherently
inefficient. There is a startlingly simple solution to problems such
as the cost of childcare: cut taxes significantly, especially for
lower income groups, and thereby give people real spending power and
choice over how to provide for families themselves.
As Labour flirts with its new consensus, ideological differences
between the parties are becoming clearer. Britain is, to use Tony
Blair’s phrase, at a fork in the road. One way leads to the new
Sweden, to ever bigger, more expensive and intrusive government, of
the kind from which Britain has traditionally recoiled. The other
way leads to personal responsibility, freedom, and the wealth that
follows. It shouldn’t be difficult for Conservatives to decide which
way to travel.
Nick Herbert is director of the independent think tank Reform,
www.reform.co.uk.
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