Competitiveness 'fell after 1997'

Britain's economic competitiveness plummeted after the Tories lost power in 1997, a think-tank claimed

Published: 7:33am, 6th June 2011
Updated: 9:55pm, 6th June 2011

Britain's economic competitiveness plummeted after the Tories lost power in 1997, a think-tank has claimed.

The right-wing Centre for Policy Studies said research showed the UK fell in each of the three main league tables of international competitiveness after Labour took office following 18 years of Conservative rule.

The think-tank's acting director Tim Knox said: "If growth is the key which will release us from our economic and fiscal predicament, then re-establishing competitiveness is crucial."

Mr Knox continued: "The coalition is trying to improve the government finances by eliminating the budget deficit over the course of this Parliament.

"It is also making business investment more attractive by lowering corporation tax.

"But in order to return the UK to its competitive position achieved in the late 1990s, the coalition will also need to open up public services to competitive pressures, deregulate enterprise and lower the tax burden.

"Our fall down the league tables shows that these are steps we cannot afford not to take."

The centre's paper, How To Reverse The UK's Declining Competitiveness, shows that since Prime Minister John Major lost the 1997 General Election to Tony Blair, the UK fell from seventh to 12th in the Global Competitiveness Report published by the World Economic Forum (WEF), from ninth to 22nd in the World Competitiveness Yearbook published by the Institute for Management Development and from fifth to 16th in the Index of World Economic Freedom published by the Heritage Foundation.

The report blames excessive business red tape and regulation, high taxes and mismanagement of government finances for the falls.

The Centre for Policy Studies was launched in 1974 by Margaret Thatcher to promote free market economics.