The Social Affairs Unit

Print Version • Website Home • Weblog Home

Use the buttons below to change the style and font size of our site.
Screen version     Print version:   
February 07, 2007

As the Heritage Foundation ranks the UK the sixth freest country economically, Harry Phibbs argues that we can learn much from the Heritage Foundation's public policy work

Posted by Harry Phibbs

The Heritage Foundation - in their annual Index of Economic Freedom - has just ranked the United Kingdom the sixth freest country economically. Harry Phibbs argues that British politicians can learn much from also taking a look at the Heritage Foundation's public policy work.

British politicians are often interested in copying campaigning techniques from their American cousins. The sound bite, the focus group, the spin doctor - all have gravitated across the Atlantic. But what about the substance? Why do we not pay more attention to their policies?

In the London Borough of Hammersmith and Fulham, where I am a councillor we are not too proud to look for good ideas from others. When it comes to how to cut Council Tax we just tootle across Putney Bridge to pick up some tips from Wandsworth Council. To cut crime, however, we have to look to New York and Chicago, where the zero tolerance approach, based on the "broken windows" theory has been proven to work quite some time ago. Yet Shepherds Bush Green ward and Fulham Broadway ward in our Borough will be the first places in Britain where it will be given a serious try with 24/7 policing.

Surely the best "one stop shop" for Conservative policy ideas from the US is the Heritage Foundation. It started in 1973 with money from Coors beer tycoon Joe Coors.

But before considering what Britain might think about them and what they have to offer, what do they think of us? Each year the Heritage Foundation publishes an Index of Economic Freedom. The winner is Hong Kong, quite an achievement for notionally Communist territory. It is followed by Singapore, Australia, the United States, New Zealand and the United Kingdom.

For us to come in in sixth place is a pretty good showing after 10 years of Gordon Brown piling on tax and regulation. We are ahead of various countries I would have expected to beat us including Ireland, Iceland and Switzerland. Former Communist countries doing well include Chile at 11 and Estonia, which ceased being Communist much more recently and is already at 12. I would expect Estonia to beat us in the future. Good for them.

The United Kingdom is scored highly by the Heritage survey for respecting property rights, welcoming foreign investment, the low level of corruption compared to other countries and the extent to which our banking and insurance industries and Stock Exchange have been allowed to prosper without the Government getting in the way.

There are some criticisms. No prizes for guessing the most glaring:

Total government expenditures in the United Kingdom, including consumption and transfer payments, are very high. In the most recent year, government spending equalled 44 percent of GDP.
I think that the Heritage Foundation probably should have given greater importance to this criteria which would have knocked us down the rankings a bit.

On prices Heritage note:

As a participant in the EU's Common Agricultural Policy, the government subsidizes agricultural production, distorting the prices of agricultural products. Prices in the United Kingdom are generally set by market forces, but pharmaceutical prices are capped, and the government influences prices through regulation and state-owned utilities. Consequently, an additional 10 percent is deducted from the U.K.'s monetary freedom score to account for these policies.
So what should we look at from them in terms of policy? Back in 1980 they produced a fat volume full of specific proposals called Mandate for Leadership, many of which were adopted by the incoming Reagan administration.

Those who dismiss education vouchers as a policy for the rich, really should take a look at some of the analysis Heritage have done on the reality. There is a constant focus on "school choice" and the different versions that have been adopted in different states:

Utah is poised to become the first state in the country to enact universal school choice. Today, the Utah House approved a bill that would provide every Utah parent with school-aged children a voucher worth $500 to $3,000 that could be used at any eligible private school. The bill now goes to the Senate, where broad-based school choice has received much support in the past.
On foreign policy they have done valuable work on the merit or otherwise of such bodies as the United Nations and its assorted agencies. Should we withdraw (as we did for a time with UNESCO) or work to reform from within?

Those of us concerned about the challenge of getting state spending under control can learn much from the formulas for spending limits they have proposed.

When it comes to tackling inner city deprivation much of their detailed work on Enterprise Zones could be pilfered to good effect.

Many of the problems we have are even more pronounced in the United States. But often strategies for a robust response to these challenges also come from the same country - via the Heritage Foundation. For good ideas, go west.

Harry Phibbs is a journalist.

Comments Notice
This comments facility is the property of the Social Affairs Unit.
We reserve the right to edit, amend or remove comments for legal reasons, policy reasons or any other reasons we judge fit.

By posting comments here you accept and acknowledge the Social Affairs Unit's absolute and unfettered right to edit your comments as set out above.

I live in Hampshire and if we received the same Government grant as Hammersmith and Fulham, we would not be paying any council tax this year.

Posted by: Christine Melsom at February 7, 2007 02:24 PM

Digging deeper into the Heritage yields interesting results:

Posted by: Jim Caserta at February 7, 2007 08:07 PM
Post a comment

Anti-spambot Turing code

Creative Commons License
Except where otherwise noted, this site is licensed under a Creative Commons License.

The Social Affairs Unit's weblog Privacy Statement