What would one expect the most right-wing Britain since the late 1970s to look like?
For convenience one might divide the answer into economic and socio-cultural. On the economic side one would expect the size of the state to be below 40%; the tax burden overall, and especially on the rich, to be relatively light; social spending to be lower than the 1980s, probably thanks to private insurance having increasingly replaced the NHS and other once publicly-funded services among the middle class; levels of inequality and poverty to be at all time highs with a privately educated elite more entrenched than ever; the minimum wage to have fallen sharply relative to average earnings, and an easy hire and fire business culture.
Is this an accurate picture of modern Britain? No it is not. The size of the state is currently 45% and heading north. As Robert Colville put it recently we have had “one-way Keynesianism” in which Chancellors are happy to run deficits when times are tough but don’t then pay them down when recovery comes. The overall tax burden is on track to reach 38% of GDP the highest level since the war and a full 11 percentage points higher than in 1993. And believe it or not Britain has the most progressive tax system in Europe, with high earners paying more relative to the average than anywhere else (the top 0.1% of earners pay more income tax than the bottom 50%).
Social spending, depending on how you count it and partly thanks to the historic decline in defence spending, has never been higher in both absolute and per capita terms. Nearly 25% of GDP is spent on health and welfare, the highest proportion ever.
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