The United Kingdom has been named the 14th freest economy in the world by the Heritage Foundation’s annual Index of Economic Freedom.
The survey noted that the UK had made modest improvements in government spending, labour freedom, monetary freedom, and trade freedom but criticised deteriorations in business freedom, freedom from corruption, and fiscal freedom.
In the European ranking Britain placed fifth behind Switzerland, Ireland, Denmark and Estonia.
Hong Kong took the global top spot for the 20th consecutive year. It was followed by some of the most well-regarded competitive nations: Singapore, Australia, Switzerland, New Zealand and Canada. Chile, Mauritius, Ireland, and Denmark rounded out the top 10.
The biggest development was the United States' fall from the top 10, now ranking 12th. The index blamed expansion in the size and scope of government, including new and costly regulations in healthcare.
Summarising the UK’s position compared to the start of the Index twenty years ago, Heritage wrote:
“Over the 20-year history of the Index, the U.K.’s economic freedom has declined by 3 points, the second worst performance among advanced economies. Despite notable improvements in trade freedom and investment freedom, the overall gain has been offset by combined declines in the management of public finance and regulatory efficiency.
Britain’s economy has been consistently rated one of the world’s 20 freest. However, since 2006, when it reached its highest economic freedom score ever, the U.K. has been largely on a path of declining economic freedom. Expansionary public spending has generated significant budgetary pressure. With government debt over 90 percent of the size of the economy, underlying economic fundamentals generally remain weak.”
Watch Allister Heath's CPS/1900 Club lecture on how to revive the UK economy.