Part II - To ask what you'll be doing to avoid the Labour tax - Scandi model

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This thread is full, but there was a post at the end asking about fair society and Scandi model.

I wanted to share this link - really good description
DI_The-Nordic-social-welfare-model.pdf (deloitte.com)

"Many public services and benefits in the Nordic countries are provided to the entire popu lation for free, or at a reduced price, independent of market mechanisms (see figure 4 on page 12). Free and equal access to these social services is the core universal principle of the Nordic model. Access is not based on the ability to pay, nor economic need."

" the size of public pensions in Norway, Sweden and Finland depends directly on how much the individual has earned and contributed to the pension system. "

"The Nordic countries all have employment rates above 70 per cent, and most land near the top of the list of OECD nations (figure 6 on page 13). Iceland and Sweden, in particular, stand out with employment at approximately 85 per cent and close to 80 per cent, respectively. "

"How do the Nordic countries achieve these high employment rates when they offer such generous social benefits, which are not limited to the poor? Why don’t more individuals simply take advantage of the broad social security net? The answer seems to lie in the gradually ‘tougher’ policies the Nordic countries have adopted, which increase incentives to work in various ways and balance the provision of social security. For instance, the unemployment benefit period has been progressively reduced, as has the amount of compensation"

The entire debate in Britain is about redistribution. In Nordic model EVERYONE pays in and EVERYONE get services, not means tested. Of course this leads to much more equal and fair society. But to try to move this way here we'd need to make all benefits (WFA, childcare, child support etc etc) non-means tested, increase taxes at the bottom and make UC time limited. Anyone up for it?

We can't really compare ourselves to the Nordic countries, especially Norway. Their pensions are backed by the largest sovereign wealth fund in the world which was funded by there oil industry and their population is less than 10 percent of the UK. Unfortunately we had the opportunity to do the same, but politically the decision was made not to create a SWF and instead use the money to allow for tax cuts.

I’ve always said Child benefit should be universal, it used to be. Everyone needs to feel like they benefit. We are a very different country to Sweden & Norway, I don’t think we have the same inter generational inequality. Also Norway has their fund.

The Norway SWF was a great idea. Here we prefer to sell off everything cheap for short term gain.

Why then people keep referring to Scandi as a model to aim for?

Because they are some of the happiest countries?

They are considered the best places to live in the world.

But we can't be like them because they have wealth fund??

And it's only Norway who does, not Finland or Sweden or Denmark?

I really don't get it - we want to be like them but want to implement a system which is directly opposite?

The scandi countries are a lot more devolved than we are, healthcare is decentralised & a far higher % are in trade unions.

I thought the suicide rate was extremely high there. Finland especially? Happy to be proved wrong

It's not just about money. Studies have repeatedly shown that Nordic countries have high levels of trust which leads to social cohesion. The way their society is formed makes it easier for Nordic people to achieve connectedness to other people, good social relations, and a focus on the common good.

They have a high level of institutionalised services. They are very democratic cultures with a lot of freedom to make life choices. Their institutions are very effective at delivering services and improving well being. Governments are efficient in spending and spend much more on institutional services as a proportion of their GDP.

They have low levels of income inequality. With relatively low levels of income inequality, social mobility in society is high; money is mostly granted to those who work hard regardless of their socioeconomic status at birth, as opposed to through factors such as generational wealth.

@Feelingstrange2 the suicide rate is not much different to ours. It was high in the 90s but they had a big drive to reduce it.

But also no country has a happiness level of 100%

They have low levels of income inequality. With relatively low levels of income inequality, social mobility in society is high; money is mostly granted to those who work hard regardless of their socioeconomic status at birth, as opposed to through factors such as generational wealth.

Complete opposite to the UK & a lot of people will not want to change that.

I posted this on another thread
For those saying Scandinavia has much better services etc I’ve just put a £40,000 salary through a Norwegian tax/NI calculator compared with ours. You’d be paying an extra £1500 per year over there. Given there are far more tax payers in uk at 40000 than 100000 it could raise a huge tax revenue, but there would be riots on the streets here if that happened.

For those earning £100,000 the tax take in the uk is about £600 less than Norway. Because there are fewer of these people, raising taxes to Scandi rates won’t generate as much.

Does everyone still want to go the Scandi route in the light of that? Would everyone be willing to make the sacrifice. It would hit middle earners the most.

That's the difference in attitude. In Scandi countries there's an attitude of collective responsibility - we're all in this together. It's that kind of attitude that created the welfare state, free university, the NHS and social housing.

Now it's: 'I'm all right Jack.' The idea of efficient services is great but there would be riots if you had to actually contribute towards it.

Does everyone still want to go the Scandi route in the light of that? Would everyone be willing to make the sacrifice. It would hit middle earners the most.

Higher rate tax payers already pay a similar amount of tax as other countries, it’s the middle earners that don’t, this of course gets overlooked.
However this is with regards to PAYE which most very high earners aren’t on.

I agree there is a difference in attitude.
Here there are groups at the top who feel they only give and received nothing instead and larger groups at the bottom who find all excuses for their poor choices and give nothing to society. Middle are continuing being squeezed.
It feels that direction of travel with new "painful" budget is to exacerbate this.

Why the fact that there is time limited unemployment benefit being ignored?

There is no wealth tax in Scandi and a lot of them don't have IHT either

If the squeezed middle end up paying another 1000 in taxes then Labour have an election cycle to clearly evidence the improvements that they are making for all.

otherwise the other parties will be saying ‘we told so - Labour is a high tax party, not on the side of business etc etc.

One shot.

Again this is a difference in attitude. There are high levels of equality in the Nordic countries, a less entrenched class system and social mobility is easier.

You see people who have made poor choices, I see people with fewer options. Those on more should pay more and we should help elevate everyone. We shouldn't have such wealth disparity in such a rich nation; it's shameful.

And yet they are nowhere near as unequal as the UK.

The UK has very high inequality of income compared to other developed countries; the 9th most unequal incomes of 38 OECD countries (OECD, 2022).

The UK’s wealth inequality is much more severe than income inequality, with the top fifth taking 36% of the country’s income and 63% of the country’s wealth, while the bottom fifth have only 8% of the income and only 0.5% of the wealth according to the Office for National Statistics.

There are high levels of equality in the Nordic countries, a less entrenched class system and social mobility is easier.

You see people who have made poor choices, I see people with fewer options. Those on more should pay more and we should help elevate everyone. We shouldn't have such wealth disparity in such a rich nation; it's shameful.

Exactly, here people prefer to judge and blame.

Sweden has a horrific gun/gang crime issue. I don’t think we should be aspiring to that.

https://www.bbc.com/news/world-middle-east-67342368.amp

Nordic countries have some of the highest DRDs in Europe though and have had for many years. It's a hugely concerning issue.

There’s a cultural element to why the Nordic countries work the way they work. What makes me laugh is that many of the threads citing European models are fearful of paying more tax, when many of these countries pay significantly more tax than the average Brit.