The UK climbed seven places to rank ninth ‘freest country’ in the world between 2020 and 2021, despite “alarming” declines in how it scored for ‘size of government’ and ‘regulation’.
The UK had reached “all-time highs” in the early 2000s, peaking as the world’s sixth freest country, according to the 2023 annual Economic Freedom of the World report by the libertarian-conservative think tank Fraser Institute, published today.
The degree of economic freedom is measured in five areas: size of government, legal system and property rights, sound money, freedom to trade internationally and regulation.
Despite the UK’s overall economic freedom rank increasing from 16th to ninth, the UK’s performance score on size of government, sound money and regulations has declined.
Alexander Hammond, Institute for Economics Affairs Free Trade fellow and author of chapter five of the report, said the jump could be due to the UK easing pandemic restrictions sooner than the others.
“The UK’s overall economic score remains below its 2019 level and significantly behind the all-time highs we achieved in the early 2000s,” Hammond said.
The decline in the UK’s score in size of government and regulation are “most alarming,” Hammond added.
“This indicates that an independent British state, free from Brussels’ oversight, has become larger and more bureaucratic,” Hammond said.
The report shows that the UK’s economic freedom is placed before countries like Japan and Canada, however, it is still in decline compared to before the pandemic.
In 2021, the UK scored 8.01 out of 10 on the “economic freedom indicator”, whereas in 2019 it scored 8.20 and 8.65 in 2000.
If the UK scored with pre-pandemic levels, the IEA said, it would have placed fifth before countries such as the United States, Ireland and Australia.
The number one spot, which used to be occupied by Hong Kong, now sees Singapore as the leader, followed by Hong Kong, Switzerland, New Zealand, the United States, Ireland, Denmark, Australia, the UK and Canada.