By Claire West
The UK has fallen out of the top 15 most economically free countries in the world.
Scoring only 74.5 in the 2011 Index of Economic Freedom, released last week by the Heritage Foundation and The Wall Street Journal in association with the Institute of Economic Affairs, the UK has slipped to 16th place in the Index. This is 5 places lower than last year and 2 points lower.
The UK does particularly badly when ranked on fiscal freedom and government spending.
Last year the UK fell out of the top ten for the first time in the Index’s history, falling an additional 5 places this year is significant cause for concern.
Commenting on the Index, Philip Booth, Editorial and Programme Director of the Institute of Economic Affairs, said:
“The decline in economic freedom in the UK is doing significant harm to business and the UK’s growth prospects. The coalition must act urgently to reverse this disturbing trend.
“These figures reflect what happened under the last government, but should be a wake-up call to the coalition. Action that has been taken by the current government so far is unlikely to reverse this downward trend in economic freedom.
“The coalition has overseen an increase in tax through changes to Capital Gains Tax, VAT and fuel duty. In many areas regulation has increased or is set to increase. Alongside this the trend in public spending growth will not be reversed until next year and, even then, it will only return to the levels of five years ago. Much more drastic cuts are needed.
“The introduction of the Equalities Act is yet another area where we have seen an encroachment on economic freedom. Taken together these factors create a difficult environment for businesses, at a time when government should be pulling back in order to allow them to flourish.”