We're all aware of Polly Toynbee, doyenne of the Guardian's comment pages and conscience of the nation. It's true that she comes in for a bit of stick at times, but I think it's time we started to take her more seriously. Indeed, time that we create the sort of society she desires. Which is, as she tells us this morning, the following:
I want Britain to aim for the social and economic balance that thrives in Nordic nations.
Excellent! Let's change policy to achieve that laudable aim. We should copy the Finnish education system, for example – it is, after all, the number one such system in the world. There they divide into academic and vocational at 16 and there's none of this nonsense that all must go to university – that's reserved for the small fraction that are indeed academic. Or the Swedish system of education vouchers. Parents decide on the school they want children to go to and the local council stumps up the fees – whether it's a public or private school.
From Denmark we'll take a couple of policies. Privatise the ambulance and fire services certainly. They've been working well there for nigh on 90 years. We'd want their taxation system as well: the national income tax is 3.76% and the top national rate is 15%. True, total income taxes are high but the rest is levied by the commune, a political unit as small as 10,000 people. At that scale, taxation is subject to the Bjorn's Beer Effect. If you know that it's Bjorn who levies your taxes, Bjorn who spends your taxes and also know where Bjorn has his Friday night beer, then he's going to spend your money wisely. Otherwise he can't go out for a beer on Friday, can he?
From all of them we'll take the abolition of the national minimum wage, for none of the EU Nordics has one.
Sweden has also abolished inheritance tax, gift tax and the wealth tax. Those sound like three excellent ideas to copy.
We'll have to raise VAT as well, of course: for this is something that people don't seem to realise about Nordic tax systems. In many ways they are more regressive (yes, regressive, not progressive) than our own. This is because those countries follow the basic economics of taxation. You need low corporate and capital taxation, moderate income taxation and high taxes on consumption.
As the OECD helpfully points out, all taxes have deadweight costs. These are economic activity that doesn't happen because of the presence of the tax. Different taxes have different deadweights. The aim is obviously to collect the money you need while destroying as little economic activity as possible. For the amount of money you collect in tax, property taxes destroy the least activity, consumption taxes a little more, income more than that and the most destructive are taxes on capital and companies. So that's what the Nordics do: low capital and corporate taxes, high VAT.
We'll also need to decentralise, even dismantle, the National Health Service, for none of the Nordics has anything like it. Instead, it's local taxation paying for local care in all instances: a real postcode lottery.
So, yes, we really should do as Polly asks. Let's make this a country she can be proud of. School vouchers and academic and vocational streaming. Privatised emergency services. Local, not national, taxation. Abolish the national minimum wage. Get rid of inheritance and gift taxes. Raise VAT, cut corporate and capital taxation. Finally, destroy the "national" part of the NHS.
