Hopes that Britain might become the "Singapore of Europe" took a setback this week. A wave of reality swept over the beaches. Regaining sovereignty and taking back control, almost led to an EU blockade of vaccines to Northern Ireland.
Free movement of goods has already meant the confiscation of cheese and ham sandwiches of luckless lorry drivers entering the port of Antwerp. Fears are rising, the Douaniers across from Dover may be scoffing the plunder. The Department of International Trade has advised the "Lighthouse Keeper's Lunch" Defence. Two packedd lunches, one hidden under the dashboard, the other heavily smeared with English mustard, the solution.
Boris Johnson has resurrected the idea of the Singapore of Europe, as a future template for businesses in Britain. We will break free from the restrictions and regulations within the EU and set Britain on a new path to prosperity. Lower taxes will herald the move.
Rishi Sunak has been charged with task of leading a cross-Whitehall committee to examine which regulations may be reformed. The Chancellor will also chair a cabinet committee, focused on cutting red tape. Many will be surprised there is any red tape left, so much must have been cut in the past.
In 2014, Sajid Javid as the new business secretary, eliminated 3,000 pieces of regulation in the "Red Tape Challenge". Simplification, rationalization, consolidation became the mantra. Many were already redundant. Businesses heaved a sigh of relief as "Trading with the Enemy" orders were eliminated, dating from 1943, 1944 and 1945.
In 2021, business leaders from the CBI, the Chambers of Commerce and the IOD have made it clear there is no demand, for mass deregulation. No requirement either, for a reduction in employment standards and work force protection. There is little or no evidence that lower regulations will boost trade especially within the EU.
Singapore has a top tax rate of 22% compared to 45% in the UK. The Corporation tax rate in the UK is already par at 17%. Hopes for tax reductions seem way off. The government deficit is heading towards £400 billion this year.
Jonathan Portes, Professor of Economics at Kings College, London, suggests the idea that Singapore as a model for the UK is mostly froth. Singapore spends just 14% of GDP on public services, half as much as the UK on public health services. There is little appetite, for cuts to public services, to finance tax cuts. Little appetite amongst business for structural adjustments to essential regulation.
"Dreams of a Singapore-style Britain should be derided as fantasy". George Osborne's "march of the makers, rebuilding the workshop of the world" had more legs but not for long.
This week, Priti Patel the Home Secretary suggested overseas travel should be made illegal. Government Trips to "Fantasy Island" should be on the travel ban list ...
The Saturday Economist
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