Blair's party is crying out for Gordon the Viking
Following the inspiration of the Swedish model will turn Brown from a great chancellor into a genuine Labour leader
Douglas Alexander, the Europe minister close to Brown, is just back from Sweden, where a close-fought election is seeing conservatives playing the same game - pretending to shadow the Social Democrats on every policy, while in reality planning ideological tax-andspending cuts with privatisations, as they did when last, briefly, in office. "Sweden," Alexander says, "has an economic and social model that proves the Conservatives entirely wrong. With a growth rate of 3.5%, and unemployment falling to near 5%, they are doing superbly in the global economy. No, I'm not saying we are heading for their higher tax rates, but they show how to prosper with strong public spending."
No, Brown will not turn Swedish in one spasm. It took the Social Democrats nearly 70 unbroken years of steady progressive government to reach this civilised state of relative equality, high living standards, excellent public services - and high happiness ratings. It needs citizens who want to travel that way. It needs trust in government, which semi-anarchic Britain and its poisonous rightwing, anti-state press forever undermines. (Yes, scandals all governments have, in Sweden too.)
6 comments:
More detail on the Swedish economy can be found here.
Some more info on Sweden:
According to wikipedia Swedish unemployment records are highly contested as official figures do not include unemployed people in government programs, people on extended sick-leave and people in different welfare programs. It is thought to be closer to 11% when using a system of measurement similar to that of other European nations and the US.
The UK's GDP per capita is slightly higher ($30,900 uk) than sweden ($29,600 Sweden).
Also, the UK's public debt is lower at 42.2% than Sweden's at 50.3%.
However due to higher taxes (25% VAT for example) the salaries in Sweden are more equal.
Other points of interest: they have a written constitution, a monarchy, and introduced an education voucher scheme which allows parents to buy a place for their child at a school of their choice (see this previous thread for more on Sweden's school voucher scheme)
There's also a general point (which, having done no research, may or may not apply in particular to Sweden) that previously successful high-tax-high-spend European economies are struggling to maintain this success in the face of changing demographics. This applies in spades to Germany (where I lived), and my guess would be that something similar applies to Scandinavia.
I think JP is probably right. Interestingly both Germany and France appear to be trying to move away from their high-tax-high-spend policies. It won't be easy for them though, just look at the French rioting in response to the proposed liberalising of employment regulations. Ironically, England have been drifting towards a high-tax-high-spend economy just at the moment that the other European countries are questioning that model.
I was surprised to discover that Sweden doesn't have a minimum wage. Also, they don't have a National Health System (less surprising perhaps), instead they operate a county council based system (that also has a private provision of health services to supplement the Council run hospitals and services). These points - along with the Swedish Voucher education system mentioned above - have slightly changed my view of the Sweden.
'Real Swedish jobless rate 15%'
FT.com
Sweden's unemployment rate is 15 per cent, three times the figure being used by the government, according to new research from McKinsey Global Institute, the think tank.
The consultancy's calculations indicate unemployment is set to rise further, with between 100,000 and 200,000 jobs outsourced to cheaper countries over the next 10 years if no corrective action is taken.
The numbers cast a pall over Sweden's international reputation as a thriving welfare state with low unemployment and will help focus attention on jobs ahead of September's national elections.
McKinsey reached its conclusions by including those who want to work and those who could do so, meaning people on government programmes as well as those on prolonged sick leave.
In its first assessment of the country's economy since 1995, it said: "Sweden's economy has reached a critical juncture. If nothing is done, the problems will become much more serious."
It praised Sweden for achieving average GDP growth of 2.7 per cent a year since 1995, which it attibuted to deregulation and improvements in private sector productivity.
But it said the country could not rely on future improvements in private-sector productivity, as the catch-up effect that had driven these developments would decline over time.
The ageing population would put the public sector under "intolerable pressure" unless productivity improved, it added.
"If nothing else changes, the resulting increase in welfare costs would become too large to finance through the current tax system in only 10 to 20 years," McKinsey said.
It forecast municipal income tax rates would have to rise from about 30 per cent to about 50 per cent, arguing that these rises would not be accepted by the public as welfare and health services would decline.
Last, it said that the real unemployment rate of 15 per cent could increase as the production of goods and services moved to lower-cost countries - such as the Baltic states, Poland and Russia.
"Sweden needs to move quickly to introduce reforms that would create favourable conditions for sustained productivity growth in the private sector, better performance in the public sector and the creation of jobs in the private services sector," it said.
It expressed confidence the country would be able to respond to these challenges, praising its productive industries, macroeconomic stability and good relations between politicians, companies and unions.
But McKinsey said that Sweden had a lot of lost ground to regain. According to the Organisation for Economic Co-operation and Development, Sweden had dropped from fifth position in its welfare ranking to 112th in 2004.
That last line must be a typo though - no way have they have dropped from 5th position in welfare ranking to 112th. I'm assuming they meant 11th or 12th.
Incidently, another surprising fact I read about Sweden - no inheritance tax.
Post a Comment