Fraser Nelson

Tax cuts: a Swedish recession remedy

Tax cuts: a Swedish recession remedy
Text settings

I travelled in from frozen Stockholm this morning. My colleague Mary Wakefield set out from County Durham. No prizes for guessing whose journey took more time due to snow.

When my £38 flight arrived at Gatwick, the captain said: “Sorry, we’re going to be delayed. They can’t seem to find people to open the gate, they say they are short staffed.” The Swedes on the flight burst out laughing: welcome to Britain.

Mary’s £107 train was two hours late arriving to the station, and spent a further two hours stuck in the snow. That the Swedes do better at us in the snow is no great surprise, but it’s odd to see them do better at supply-side economics.

The re-elected Fredrik Reinfeld, who was in seeing Cameron on Thursday, is today celebrating Q3 economic growth figures of an annualised 6.9 per cent - the highest since 1971. He responded to the recession by cutting employment taxes on the workers, but not the unemployed. The poor paid a higher marginal rate, said the left, this is unfair. Not so, said Reinfeld, we conservatives are the workers’ party. We support workers, and make life easier for them - that means letting the keep more of the money they earn. And if one creates a higher incentive to work, then more people will. He was rubbished by everyone - but was proven right. The economy turned around just in time for the election. He even cut taxes for the rich, arguing that it would raise more money.

If this can work in the world capital of social democracy, might there just be a market for them in Britain? Stranger things have happened.