UK economy no freer than in 2013 says Washington think tank

Despite tax cuts and reductions in government spending the UK economy is no freer than it was in 2013, according to the Heritage Foundation's Index of Economic Freedom. At the dawn of 2014 the UK managed to increase its score by a meagre 0.1 percentage points.

Overall, the UK scored 74.9 out of 100. Britain continues to lag behind more liberal economies such as Estonia, Denmark and Ireland. However, in comparison to its European counterparts, the UK continues to have a relatively liberal economy. Out of 43 countries analysed in the European region, the UK was ranked fifth.

Modest improvements were made in the areas of government spending, labour, monetary, and trade freedom.

Heritage cites a legal system that enforces contracts and property rights effectively and openness to global trade and investment, as reasons why the UK is consistently placed in the top 20 economically freest countries.

However, progress in areas of such state spending and tax reduction have been set back by deteriorations in business and fiscal freedom.

While the UK may be standing still in terms of economic liberty for 2014, the trend over the longer term paints a gloomy picture.

Over the 20-year history of the index, the UK's economic freedom has fallen by three points, the second worse performance from an advanced economy.

Excessive government spending and high tax rates have severely impacted the UK's score over the years. Business freedom has become a significant concern, with licensing requirements taking up to three months. As the coalition attempts to reduce the deficit through piecemeal spending cuts the country's debt continues to rise, approaching 90 per cent of GDP.

State control of health care and the tripling of low-carbon power subsidies by 2020 bode poorly for the future of economic liberty and long-term growth.

The UK's score pales in comparison to Hong Kong which achieved first place for the 20th consecutive year, with a score of 90.1. Following closely behind was Singapore, Australia and Switzerland.