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Tuesday, December 7, 2021

Britain is already a European-style social democracy

We humans have always been fascinated by rare natural phenomena, whether we tune in to David Attenborough documentaries or obediently trudge outside to witness a blue moon, Perseid shower or solar eclipse. But earlier this week, guests at the Centre for Policy Studies conference experienced perhaps the oddest sighting of all – a Tory Cabinet Minister saying something conservative.

It was a tale of two speeches. First came the Prime Minister’s address to the CBI – an often self-contradictory monologue which simultaneously praised business in the abstract, applauded the Government’s crucial role in “making [markets]”, and offered no concrete plans for boosting growth.

Later in the day, Lord Frost delivered a refreshingly to-the-point speech that showed the PM’s ramblings in a deeply unflattering light. Unusually, in our changeable and jargon-heavy politics, it revealed a clear guiding philosophy – free markets. Frost defended the private sector unambiguously. 

“I can’t share the views of those who think we can treat [it] as just a convenient way of keeping the public sector running,” he said. Tory Ministers often spout free-market rhetoric alongside social-democratic policies so perhaps it’s the poverty of low expectations, but it’s refreshing to know that at least one hasn’t given up on the idea.

One comment seemed particularly striking: “We can’t carry on as we were before and if, after Brexit, all we do is import the European social model, we will not succeed.” The trouble is that, when you consider the trajectory of UK politics, it often seems as though that ship sailed some time ago. In many respects Britain is already a country in the European social democratic mould and likely to become more so.

We often outdo Europe in excessive bureaucracy and over-centralisation. Both our socialist healthcare model and our collectivist approach to social care and its funding bear little resemblance to the mixed, insurance-based schemes on the Continent.

Britain’s traditional low-tax reputation seems a thing of the past too. The Government’s plan to raise corporation tax to 25 per cent by 2023 sits well above the current European average and promises to dampen inward investment just as we need it most. In its most recent annual International Tax Competitiveness Index, the US-based Tax Foundation placed the UK 22nd out of 37 OECD countries judged on the overall performance of its tax system.  This takes into account not just the overall burden but the way taxes distort consumer behaviour and hamper growth. It’s not merely that taxes are rising – the ones we choose tend to be particularly harmful and distortionary.

Britain is even embracing policies our continental neighbours have abandoned, like price controls, even the “levelling up” project. Germany and Italy have both sunk enormous sums into “equalising” wealthier and poorer regions of their country – Germany after reunification, and Italy after the War, with the Cassa del Mezzogiorno fund for the South. Both carried vast price tags and enjoyed varying degrees of success; major regional health and income disparities remain after many years and trillions worth of investment.

During the pandemic, the EU frequently struggled to assess risk rationally – as when it restricted the use of the AstraZeneca vaccine –  and its rigid bureaucracy failed to respond to fast-moving events. Led by venture capitalist Dame Kate Bingham, the UK took a far more entrepreneurial approach to vaccines. Yet our Government has failed to replicate the success of the vaccine taskforce in other departments.

In a damning intervention yesterday, Dame Kate complained of a government dominated by process rather than outcome, a civil service crippled by groupthink and stifling risk-aversion. Her words suggest institutional failings hard-wired into the DNA of all departments. We’ve left the European Union, but not, it seems, its precautionary mindset.

Finally, the matter of lockdowns. In continental Europe, panic seems to be overriding sense and decency. Yet though England wisely reopened in July, our comparatively favourable position heading into winter seems as much a result of chance as any national exceptionalism as opinion polls bore out our national preference for the sort of authoritarian measures now sweeping Europe. “Even our police have moved from their traditional role as citizens in uniform, closer to Continental-style state enforcers.

What explains this managerial shift in our politics? Perhaps it’s a matter of self-confidence. Whereas in the 1980s, when Thatcher and Reagan held the reins, we were battling with the Soviet Union, nowadays we seem more likely to take our cues from China, or that large section of “enlightened” opinion which seems to operate on the assumption that whatever Britain does must be worse than the rest of Europe. “France has introduced vaccine passports” they’ll say, as if that alone were a convincing argument.

In reality, one of the most compelling reasons for leaving the EU remains that politicians can no longer avoid blame by using Brussels rules as an excuse for their own mistakes or inaction. It’s not too late to shift from a course of sluggish decline, but if we miss our chance we’ll have no one to blame but ourselves. 

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