Singapore is like a porn star for the free-market right. They project all sorts of lurid fantasies onto it and get very excited. Every so often, an article appears breathlessly proclaiming the virtues of the island state and its rapid GDP growth. If only the stodgy old UK were a bit more like deregulated Singapore, we could have a bit of that too. You could make similar arguments for Luxembourg, another filthy rich state which has experienced relatively high per capita GDP growth, but no-one ever seems to suggest that joining the Euro and adopting Luxembourg’s stricter labour laws would be the answer to our economic woes. (...)
That’s because it wouldn’t, of course, but neither would trying to become Europe’s Singapore. Both countries are small city states with large financial services sectors and without the inconvenience of a wider hinterland. When PwC looked at the economies of various major cities, Singapore’s per capita GDP was below that of London and New York. Cities with large financial centres tend to be rich but you can’t build an entire country on the same basis. There aren’t enough and to go round.
Many of those who think the UK should be more like Singapore might be in for a shock if it really happened, for their fantasy star has another side. Forget the Nanny State, Singapore is more like Victorian Governess State. (...)
Even if the government achieves further reductions in public spending there will be little room for any significant tax cuts. There just isn’t the scope to attract business to the UK through low taxes. To do so would (...) require a complete dismantling of welfare and public service provision. Even George Osborne was never really up for that kind of state shrinkage, for the simple reason that the public wouldn’t wear it. The small state rhetoric pumped out over the last few decades by newspapers, MPs and think tanks has had remarkably little effect. Those favouring tax and spending cuts have always been a small though noisy minority. (...)
There are some who see Brexit as an opportunity to turn the UK into something like a Singapore of Europe, a low-tax low business regulation state. But this is a fantasy that is unlikely to be shared by most of the electorate. If there is one good thing to come out of Brexit it is the revival of the idea that, if enough people vote for something, they can make it happen, despite what pundits, politicians and the plutocrats of Davos say. After we leave the EU, some will, no doubt, push for radical tax cuts and deregulation. They probably won’t get very far. They will find their efforts frustrated by the Will of the People.
Friday, March 03, 2017
Publicada por Miguel Madeira em 13:58