by We have huge levels of government spending. We have punitive taxes. The state micro-manages the economy, offering lavish levels of welfare, and constantly racking up more and more debt.
True, we don’t have a boulangerie on every corner, and we don’t have riots every weekend – or at least, not yet. But in almost every other way, however, as Indermit Gill, the World Bank’s chief economist, pointed out this week, Britain’s economy has slowly turned into a French tribute act.
There is only one catch. While France at least gets results from its sprawling state, the UK seems to get next to nothing. We have a much worse fate than our neighbor on the other side of the Channel – French tax and debt levels, together with almost third world levels of investment and public services.
It is one of the ironies of the last decade that instead of turning into Singapore on the Thames or imitating the dynamism of America after leaving the European Union, the United Kingdom has turned into France.
As Gill said, “the United Kingdom is the most similar country to the United States in all of Europe. And you guys decided to go and be much more like continental Europe. You look like France, not like the US.”
It’s hard to disagree. Public spending in the UK increased from 39pc of GDP in 2019 to 50pc during the pandemic, and is now set at 44pc.
In France, state spending is a whopping 58pc of GDP, while the US, even with the President’s huge increases in welfare payments and industrial subsidies, is still only at 36pc. A country that used to be closer to Washington than Paris is now going the other way.
This is happening across the economy. As Tuesday’s shocking public borrowing figures showed, even with punishing tax increases the government is nowhere close to balancing the books, with a deficit of 4.4pc of GDP compared to our neighbour’s 5.5pc. And of course, the growth is bad.
France is expected to expand by 0.7pc this year, on IMF forecasts, while the UK will only manage 0.5pc. The US, on the other hand, is expected to grow at 2.7pc.
The problem is that while we are increasingly emulating France’s public spending strategy, we don’t seem to get anything like the same results. If you have a huge insertion situation – and of course a few of us would prefer not to – then at least you might as well have the French version.
For all its faults, it seems to have one redeeming feature. It is effective. By almost any measure you care to look at the French government machine easily succeeds the British machine.
As? France has a much better health system, which combines social insurance with state provision, and while the French are angry that average waiting times to see a family doctor have risen from four days before the pandemic to 10 days much better than this country, where the waiting. the time for a normal appointment is 19 days, if you can go to a doctor at all.
And while you may have to pay to drive on French motorways, at least they are beautifully maintained. Paris has also just started a new TGV line, extending the route from Paris to Bordeaux down to Toulouse at a cost of 14bn euros, a fraction of the cost of HS-2.
France added 320,000 homes to its supply in 2022, and the net gain dipped below 300,000 a year only once in the last 20 years – when the pandemic disrupted projects. In the UK, we added 234,000 in 2022, which is still lower than our pre-pandemic peak. That’s around 100,000 units less, even though both countries have similar populations.
If you’ve ever wondered why that gorgeous vacation home in Provence looked so cheap, that’s part of the reason.
Elsewhere, France has a total of 56 nuclear power stations operating, the result of years of far-sighted, intelligent industrial planning, and is now Europe’s largest net exporter of electricity, with Britain of course one of the major customers.
In contrast, there are only nine, we have little idea when a new one will emerge and are dangerously dependent on imported power to keep the lights on. The list goes on and on.
Certainly, France’s continued intervention in the economy is often a disaster. President Macron’s determination to bring Air France-KLM back under effective state control, with a 28pc stake, looks set to end in tears.
Earlier this month, it had to rescue IT “national champion” Atos with a €50m loan, and could be on the hook for more. Then again, he gets one right from time to time.
Macron has backed artificial intelligence, as part of his drive to create an “initiated” nation, and it looks set to pay off, with open source chatbot company Mistral AI expected to raise $5bn valuation less than two. years after it was founded.
In the UK, we backed failed battery manufacturer Britishvolt and satellite firm OneWeb, which despite being sacked by the state and touted by Boris Johnson as a potential rival to Elon Musk’s Starlink, merged with Eutelsat France.
Government picking winners is usually a bad idea, but at least the French prefer it to most.
Sure, France’s debt to GDP ratio is higher than ours, but we are ahead in that direction.
A huge, over-extended state, with huge welfare entitlements and crushing tax levels, is terrible for growth. It drives debt to dangerous levels, shrinks the workforce, and discourages both foreign and domestic investment.
However, if the voters demand such a situation, it could be at least as effective and well-managed as the French version. Right now, the UK is heading for the worst of all.
We will have French levels of taxation and spending, along with almost third world levels of state delivery – and unless we work out how to change that, we will be stuck in permanent stagnation.
