Think tank: Adam Smith Institute

Author(s): Dr Bryan Cheang

December 3, 2021

This report from UK think tank the Adam Smith Institute looks at what the UK can learn from the Lion City.

This latest paper, by Dr Bryan Cheang, an academic at King’s College London, outlines what the UK can learn from Singapore: Singapore has had one of the most rapidly growing economies in the world in recent decades, making it one of the ‘four Asian tigers’. The ‘Lion City’ presents important lessons for policymakers in the United Kingdom. Singapore has prospered with minimal state intervention in the economy. Singapore spends and taxes far less as a percentage of national income compared to the United Kingdom and other major Western economies. Singapore spends £3,500 less per person per year on social spending compared to the United Kingdom yet achieves better outcomes. Singapore’s public services are carefully designed to emphasise individual responsibility and use market principles — while providing extremely high quality outcomes and equitable access.

The central plank of Singapore’s welfare and health systems is the Central Provident Fund (CPF) accounts, which is a mandatory social security savings scheme funded by contributions from employers and employees. CPF can be used for retirement, healthcare and housing. The Singaporian government supplements the savings of lower wage workers through Workfare and top-ups to MediSave. By encouraging saving with appropriate taxpayer-funded top-ups, Singapore’s welfare system promotes personal responsibility and local community organising that is both well-targeted to those in need and limited in cost. Singapore’s “workfare” welfare approach focuses on getting people back into work and providing them with the necessary skills. It is designed to encourage self-reliance and responsibility.

Singapore abandoned the NHS-style healthcare (and welfare) model left behind by the British when they gained independence in 1965. Instead, Singapore redesigned the health care system to emphasise market competition and choice while maintaining universal healthcare access. Singapore’s healthcare system is more efficient and has much better health outcomes than Britain thanks to market reforms. Singapore’s education system gives schools and teachers autonomy. It is largely decentralised and has a flourishing private sector which promotes competition and efficiency. The UK could improve the quality of public services, such as welfare, healthcare and education, by adopting a more market-centric, decentralised and personal responsibility model exemplified by Singapore: Reduce state-spending and taxation to similar levels of Singapore, abolishing tariffs and quotas along with other restrictions on trade; Incentivise greater personal saving or insurance for unemployment, education, retirement, healthcare, and social care; by developing a UK-equivalent of Central Provident Fund (CPF) accounts. Decentralise the curriculum and encourage further academisation. Incorporate market incentives into the delivery of welfare, health and education.