'There Is a Law of the Labour Back Benches: If They Do It in Sweden, It Must Be All Right'; So What Is the Truth about the Scandinavians, So Often Held Up as Model Social Democrats? Anthony Giddens Hails the Swedes, Danes and Finns as True Followers of the Third Way, While Neil Clark (Overleaf) Finds the Last True Socialists in Norway

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Imagine a country where the following changes have been (or are being) introduced by a centre-left government: choice of primary and secondary schools, along with decentralisation of the education system; choice in healthcare, along with foundation hospitals; welfare reform, geared to making the economy more competitive; conditional unemployment benefits; a drive to get single mothers into the labour force; more early-years childcare; a commitment to balanced budgets; an insistence that immigrants accept the host society's values; a bigger role for the private sector in pension provision.

The UK under new Labour? One might well think so, as this list accurately summarises much of new Labour's programme. But no, the country in question is Sweden, assumed by many to be the most "socialist" society in Europe.

It has been said that "there is a law of the Labour back benches which runs: if they do it in Sweden, it must be all right". Well, those backbenchers had better sit up and listen, because there are close parallels between the current programmes of new Labour and those of the Swedish social democrats--and of the centre left in other Nordic states.

The UK and Scandinavia in recent years (together with some other states, especially the Netherlands) have pursued a different path from the central European and Mediterranean countries, such as France, Germany and Italy. In the former, centre-left modernisation has been more extensive--and also more successful, as measured both by electoral criteria and by the effectiveness of national policies. Some say "modernisation" is an empty term. It is not. It means creating left-of-centre policies that allow more effective responses to the changes transforming contemporary societies. The Nordic social democrats, and new Labour in Britain, have been in the vanguard of such modernisation.

Indeed, ideological revisionism in Sweden preceded by some years Labour's reformulation of Clause Four. And certain Labour policies, such as active labour-market schemes or foundation hospitals, followed Scandinavian models. (The influence the other way round does not seem to have been as great.) Nordic social democracy remains robust not because it has resisted reform, but because it has embraced it.

Though there are naturally differences between them--for instance, taxation takes a higher proportion of GDP in Sweden than in Finland--the Scandinavian social democracies have long shared certain characteristics. In contrast to the Beveridge model, which tends to target benefits upon those in greatest need, the Nordic welfare system has a wider range of universal programmes and benefits. The state is a major employer, particularly of women. The tax and benefits system redistributes substantially, with the result that income inequality is generally lower in Scandinavia than in almost all other parts of the European Union.

The system first came under strain in the late 1970s and then again in the early 1990s, when the Scandinavians faced serious economic problems, marked by financial crises and rises in unemployment. Between 1990 and 1993, Sweden's GDP declined by 5 per cent. Unemployment reached 8 per cent, an increase of 6.5 per cent in three years. There was no extended Thatcherite period in Scandinavia. However, right-wing parties, during short periods in government, introduced a number of reforms. These were at first resisted by the social democrats, but later extended and amplified by them--in the economy, education and healthcare.

Take Swedish schools. Up to the late 1980s, Swedish education was highly centralised. Central government controlled finance, overall educational goals and the curriculum. Yet over the next few years, the school system became one of the most decentralised in the EU. In 1992, education vouchers were introduced, allowing parents a free choice of schools. The vouchers represent up to 75 per cent of the per-student cost of the local state school and can be taken to any approved private school, whether profit-making or not, denominational or not. …