Government and Institutions

Government policy has had little to do with ‘free market fundamentalism’

Jamie Whyte writes in Conservative Home

IEA Research Associate Jamie Whyte has written in Conservative Home disputing commentary that labels recent government policy as free market fundamentalism.

Jamie wrote:

“It cannot bear the slightest examination what the Conservative government has actually done over the last 13 years. No government since 1979 has been less committed to free markets.

“The state now collects more tax (in pounds and as a percentage GDP) than it did in 2010. Indeed, the tax burden is now higher than it has been in 70 years.

“And that doesn’t capture the full increase, because the Government has borrowed to fund spending in excess of its tax revenues. In 2010, government debt was 70 per cent of GDP. Today it is 100 per cent.

“State regulation of commerce has also increased over the last 13 years. For example, banking was already heavily regulated when the financial crisis occurred in 2008. The Basel II accord, aimed at ensuring banks’ solvency, had come into force in 2007. All the banks that failed had capital far in excess of the quantity that, according to Basel II, sufficed for their solvency.”

Read Jamie’s full piece here.