Norway is better-off than the UK but Cameron won’t follow its example

Norway: Its mixed economy and low difference between the highest- and lowest-paid workers has made it the most prosperous country in the world. The UK, for all the Tory government's bluster, is 13th. Lucky for some (but not all)!

Norway: Its mixed economy and low wage difference between the highest- and lowest-paid has made it the most prosperous country in the world. The UK, for all the Tory government’s bluster, is 13th. Lucky for some (but not all)!

It seems the Public Relations Prime Minister has put his foot in his mouth – albeit nearly three years ago.

The Guardian has reported that David Cameron is to reiterate his claim that the so-called Norway option for relations with the European Union is not for the UK.

Considering the other things he said about Norway – in a speech to Bloomberg in January 2013 – this seems a very hard position to justify.

“Norway sits on the biggest energy reserves in Europe,” he said. We don’t. We have to buy our energy from foreign countries because the Conservatives closed down our coal mines so we have to buy it from aborad, sold off our energy companies to foreign investors and, most recently, signed a contract allowing China to build and run a nuclear power station here.

It “has a sovereign wealth fund of over €500 billion,” he added. A sovereign wealth fund is a state-owned investment fund, putting money into real or financial assets, and is usually created when a national government has a budgetary surplus and little or no international debt.

The UK doesn’t have a sovereign wealth fund. It has a massive budget deficit and debts totalling £1.5 trillion (and that’s just the headline figure).

Norway is deemed to be the most democratic country in the world. Norwegians enjoy the second-highest GDP per-capita among European countries (after Luxembourg), and the fourth-highest GDP (PPP) per-capita in the world. It ranks as the second-wealthiest country in the world in monetary value, with the largest capital reserve per capita of any nation. Foreign Policy Magazine ranks Norway last in its Failed States Index for 2009, judging it to be the world’s most well-functioning and stable country.

The standard of living in Norway is among the highest in the world.

So why would Cameron be averse to emulating Norway?

Could it be because, economically, Norway is the opposite of everything a Conservative like Cameron holds dear?

Norway runs a mixed economy, a prosperous capitalist welfare state and social democracy country combining free market activity and large state ownership in certain key sectors. UK Conservatives demand that this cannot work and the only way to run a successful economy is to privatise everything (barring the judiciary and the armed forces, if I recall David Cameron’s 2011 Telegraph interview correctly).

Norway has a very low unemployment rate, and nearly one-third of the labour force are employed by the government. Hourly productivity levels, as well as average hourly wages, are among the highest in the world. The country’s egalitarian values have kept the wage difference between the lowest paid worker and the CEO of most companies as much less than in comparable western economies – This Writer’s understanding is that the ratio is something like 1:4.

In the UK, a chief executive may earn many hundreds of times what a zero-hours, minimum-wage worker takes home, and average wages (for working people, not executives) have recently endured their longest period of sustained reduction since the Victorian era. Public sector employment is falling (as is the efficiency of government departments). Despite a much-trumpeted increase in employment levels, productivity in the UK has remained static and taxation income has dropped.

The conclusion is clear. Not only is Norway the antithesis of Cameron’s political philosophy, but it is also practical proof that Cameron’s political philosophy is utter childish drivel that will never work as the basis for running a country.

More to the point, the Norwegian model allows prosperity for all its citizens – and the very thought of that is poison to a Tory like Cameron.

He wants himself and his cronies to enjoy all the pleasures this life can offer – while dealing out all of its agonies to everyone who isn’t in the wealthiest one per cent of the population.

By rejecting the Norwegian model of participation in the European Economic Area (as it is known), Cameron has drawn attention to this.

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4 thoughts on “Norway is better-off than the UK but Cameron won’t follow its example

  1. John D Turner

    Your journalistic instincts do you credit, but none of the above provides a convincing case for the United Kingdom to leave the European Union and, by extension the European Economic Area. Our membership of the EU comes with an EEA membership.

    As with all the ill informed comment about the steel industry, everyone, Corbyn and Macdonnell included, ignore that it is the poor quality of British management that is at the root of many of our economic and social woes. I put an element of that poor management approach down to the use of pointless league tables. You may be forgiven that vice, given that you have never been a manager?

    It is another aspect of poor management to seek to cherry pick then copy and paste the practices of other companies or organisations into one’s own. Usually, this approach is a vain attempt to achieve the same results as the organisation being copied. One may seek inspiration from other organisations or countries, one should definitely avoid efforts at transplanting ‘good practice’.

    Emulating good practice is an unfortunate aspect of the prevailing neoliberal approach of management (or as I prefer to put it the Anglo-Saxon School of Business Management) to which all across the political spectrum are seemingly in thrall! The Left love to prattle on about Works Committees, German model, whilst the Right salivates at the thought of workers owning shares in their own companies, USA model (?).

    If memory serves, Norway is in the European Free Trade Association and so through membership of that body forms part of the EEA with the EEA’s other constituent part, the European Union. The Swiss, typically, belong to none of the three, but are part of the single market.

    Norway has a wealth fund courtesy of how it chose to use its oil and gas profits alongside its abundant hydro-electic potential. Had we chosen to sell our North Sea gas to Holland rather than burning it ourselves then we too might have built up such a fund. We would have had to continue with town gas, of course, but that might have been used as a way of bridging the gap whilst exploitation of renewable generation was developed, tested and mainstreamed. Alas, the trades unions, as much as anyone else, were opposed to any major switch to renewable energy.

    The danger with counter-factual history is that it does not necessarily put our heroes in a good light. Best to leave such after dinner exercises to historians, economists and here today, gone tomorrow politicians? Incidentally, try running a car on ersatz oil, sorry, coal …

    1. Mike Sivier Post author

      I do apologise – the article wasn’t clear on the aspect of whether to leave the EU or not.

      I wasn’t trying to say that the UK should leave the EU and adopt a model of dealing with it similar to Norway; I simply wanted to highlight the possibility that Cameron might have other reasons for wanting to steer voters away from any consideration of Norwegian politics.

      I have been a manager, in fact, several times – in company structures that weren’t my own, with other managers over me. I didn’t have to deal with league tables but I can certainly agree that British management is of poor quality. I put it down to the lack of value ascribed to the skills of the workforce. I personally tried to be supportive to everybody who worked for me but I understand I may have been in a minority.

      I certainly would not advocate copying Norway wholesale, for the reasons you point out. However, it does demonstrate that there are alternatives to the Tory way, and that these alternatives have proved to be hugely beneficial elsewhere. Norway used its resources in a different way and achieved a better result. Taken at that level, we could do the same.

  2. mrmarcpc

    The tories wouldn’t recognise a good idea if it booted them up the arse, clueless, pompous, out of touch posh boys, what else would you expect!

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