The latest edition of the Index of Economic Freedom has just been published, and for the second year in a row the UK has slipped down the rankings. Now with a score of only 74.5, two points less than last year, we sit five places lower on the table, in 16th place – below countries like Chile, the Netherlands and Estonia.
The Index is published by the Heritage Foundation and The Wall Street Journal, in association with the Institute of Economic Affairs; this is its 17th edition. Due to many developing economies scoring higher than last year, the overall global average score this year increased very slightly by 0.3 points.
Last year the UK fell out of the top ten for the first time in the Index’s history; this year we have fallen an additional five places. These measures are always imperfect indicators, but nonetheless the direction of travel is a warning we can’t afford to ignore.
This survey is based on data from 2009, so it addresses developments under the last government. The question then is: to what extent has the Coalition helped to address these problems, and will we be ranked higher next year?
Unsurprisingly the UK does particularly badly when ranked on fiscal freedom and government spending. Under Labour, government spending ballooned out of control, then the recession damaged growth. Responding to the slump, Labour continued to spend, pushing us to the heady heights of our current levels of national debt.
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