For a man with many troubles of his own, George Osborne is being remarkably generous in his advice to our European neighbours. The Chancellor believes the eurozone countries should slowly merge their tax and spending systems, moving towards ever-closer union. Rather sadistic advice, given that he wants Britain to stand well clear of this unfolding disaster. But it is being repeated so often that a dangerous position is emerging. The government’s European policy seems to be to advocate remedies for other countries, rather than pursuing what’s best for Britain.
This week, we saw Nicolas Sarkozy and Angela Merkel agree to walk a little down this fateful road — perhaps with a harmonised corporation tax, presumably to deter competition between their countries. It is hard to see how a friend of either France or Germany could regard this as a good thing. The West emerged as the world’s centre of power because it had hundreds of small countries competing with each other. Why did the United States do so much better than south America once both were settled by Europeans? As Niall Ferguson and others have argued, it is because north America embraced a model of competition between states.
Furthermore, it seems disingenuous for a Tory chancellor to be advocating less competition between European states while encouraging more competition between various parts of the United Kingdom. But that is what he doing. The Enterprise Zones he is setting up in Birmingham, Bristol, Leeds and Sheffield will use lower taxes and lower regulation to encourage jobs — more than 50,000 of them, by Treasury estimates. A heartening figure, which makes one wonder just how many jobs could be created in Britain if this tax-cutting remedy were applied nationwide.
Britain is facing two emergencies at present: social and economic.
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