There Is A Nordic Alternative

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  By Lesley Riddoch

There is No Alternative says Chancellor George Osborne.  Austerity and welfare cuts are the only game in town – even though the UK has so few vital signs that our economic prospects for the rest of 2012 have just been downgraded by the IMF.

Housing benefit for the under 25s may be cut, workers may be “offered” contracts where employment rights are swapped for shares and Scottish Tory leader Ruth Davidson grabbed the headlines north of the border (some achievement for a Conservative these days) in a conference speech claiming just one in eight Scots makes an overall positive contribution to the public coffers.

  By Lesley Riddoch

There is No Alternative says Chancellor George Osborne.  Austerity and welfare cuts are the only game in town – even though the UK has so few vital signs that our economic prospects for the rest of 2012 have just been downgraded by the IMF.

Housing benefit for the under 25s may be cut, workers may be “offered” contracts where employment rights are swapped for shares and Scottish Tory leader Ruth Davidson grabbed the headlines north of the border (some achievement for a Conservative these days) in a conference speech claiming just one in eight Scots makes an overall positive contribution to the public coffers.

She told delegates at the Tory conference: “It is staggering that public sector expenditure makes up a full 50 per cent of Scotland’s GDP and only 12 per cent of people are net contributors.”

Critics immediately accused “Miss Romney” of twisting statistics to exclude hundreds of public sector workers and including economically inactive pensioners and children.  A popular tweet observed that Republican contender Mitt Romney only insulted half the American population with claims they “sponged” off the state – Ruth Davidson had managed to insult just about everyone in Scotland.

Still, the blaming, loaded, judgemental language has created a poisonous atmosphere – preparing the public for just about any policy, no matter how tough, harmful or counter-productive, in the months and years ahead.  

Ironically the Scottish Labour leader Johann Lamont may have prepared this ground with a controversial attack on universal benefits (free prescriptions, eye tests, personal care, pensioner bus passes etc) even though most were brought in by the last Labour Holyrood administration.  It seems there’s a bidding war to see who can stick the boot into “universal” welfare provision hardest – never mind that these benefits constitute just 2-3% of the Scottish budget, are costly to means test and dwarfed by other welfare delivery problems like the emergency admission of frail, isolated old people with no acute health problems.  Political reaction has been heated – but privately those hard words resonate.

Are we a “something for nothing” society? Are cuts the only answer? Perhaps there really is no choice?
There is.  But it would take humility, planning, and a Nordic rethink of society.

In Sweden, Norway, Finland, Denmark and Iceland “welfare” spending is even higher than Scotland but the numbers who use the resulting high quality services (even paying additional user fees) are also the highest in Europe.  Heavily subsidised kindergarten care in Norway, for example, has a maximum monthly contribution from parents of £200.

Not free but not totally unaffordable either – and those out of work pay no charges. In the Nordic nations welfare is not a desperate “last resort” or an admission of personal failure.  It’s an “everybody” system redistributing income across an individual’s lifetime as much as between individuals.

In Britain, it’s different.  Middle earners pay taxes AND take out private insurance to safeguard their own access to non-state funded, higher quality private welfare services.  That’s crazy, divisive, expensive and a recipe for stoking up resentment.  This “double dunting” means many middle earning families in the UK pay the same or even more on welfare than their Nordic counterparts – with the big difference that our tax pounds don’t help fix people, sort out problems in the long term, give welfare workers good jobs or help create healthier, happier nations.

Don’t get me wrong.  Affordability is a big issue in the Nordic nations too.  But a Nordic Council of Ministers report on the subject has a very different tone to the hysterical, finger-pointing debate here.  They worry about a drop in the high quality of welfare services because that will damage social cohesion and the ability of women to work and thus kill the golden goose that’s let the whole “bumblebee” Nordic economy “fly” – high levels of trust in government combined with very high levels of employment.  As long as almost everyone is making a contribution risk can be shared collectively. Compare and contrast Britain.

No Nordic government would dream of encouraging workers to swap employment rights for company shares.  For one thing it wouldn’t be possible since social contracts between unions and employers operate in every country and every workplace.  More importantly, the Nordic ability to combine high welfare standards with high levels of wealth creation (and produce large profitable companies like NOKIA, Eriksson, IKEA, H&M etc) depends on worker satisfaction and fairness in the workplace.  Openness to globalism and changing practices is only possible when workers feel secure.  It’s a quid pro quo – and it works.

In any case, Nordic workers already have a huge stake in the success of their company because so many big businesses are co-operatives.  In Sweden and Finland massive co-ops of fifty thousand individual owners run companies producing the wood pulp for most of the world’s newspapers, as well as ferries, hotels and food distribution networks.

Yesterday Norway extended paid paternity leave to 14 weeks and was recently designated “best country in the world for mothers” – for the third year running.  Even “basket-case” Iceland celebrated a return to growth last month by …increasing child benefit.

Cmon everyone.  There IS an alternative.  Britain is currently heading to hell in a handcart.  Scotland doesn’t have a clear vision of where it might be going post independence referendum either.  I’m not suggesting Scotland or the UK aims to become a carbon copy of any Nordic nation – but every economic comparison is with “old Europe”.  Why can’t we bear comparison with Scotland’s nearest neighbours?

For one thing, there would currently be huge resistance here to paying more tax – ironically because people don’t trust our government to spend tax wisely on high quality public services.

Alex Salmond’s vision of a country awash with oil and wind-farm cash is good – but it isn’t human enough.  It doesn’t tell Scots how we will treat one another.  How the state will treat us.  How everyday lives will be better.

It is possible for us to change direction.  In 1905 Norway was the second poorest country in Europe.  The longer we deny there is an alternative, the harder it will be to turn the wobbly boat around – be it the good ship Britain or the plucky little longboat Scotland.