Brexiteer fantasy of Singapore-style economy will be hard to achieve

Fireworks burst over the skyline during a preview for the 50th Singapore National Day celebration on August 1, 2015.

London (CNN)As Britain's political impasse sharpens ahead of its March 29 withdrawal date from the European Union, an idea has gained traction among some Brexiteers -- that Britain should become a low tax, low regulation and low public spending paradise in the same mold of the tiny Southeast Asian city state of Singapore.

Singapore's admirers include Britain's most vociferous of Brexiteers, like Boris Johnson, Michael Gove, Conservative MP Owen Paterson, and entrepreneur James Dyson. The "Singapore model" was lauded by Foreign Secretary Jeremy Hunt on his recent visit to the island nation, which is smaller in size than New York City. "Britain can draw encouragement from how Singapore's separation from the Peninsula did not make it more insular but more open," he said during a news conference.
Even some Remainers are advocating for it. Former advertising guru Martin Sorrell told Sky News at Davos this week that Singapore's independence "was not dissimilar to some of the things you hear around Brexit...[Singapore's founding Prime Minister Lee Kuan Yew] took Singapore to a level that people never anticipated and made it extremely successful on a much smaller scale -- 5 million people as opposed to 60 million people in Britain.
    "But the lessons are there," he added.
    At face value, it is easy to see why. Singapore was among the world's poorest nations in 1965, when it became independent of Malaysia. Although it has limited natural resources, the country has become one of the world's most advanced, ranking higher in 2017 than the UK for GDP per capita (at $57,714 versus $39,720), according to the World Bank; and ranking near or at the top of global indexes for health efficiency, education and competitiveness -- to name but a few.
    The buildings of foreign multinationals loom high on Singapore's skyline.

    State spending

    While flattered by the new-found attention, Singaporean policy-makers seem baffled by the comparisons between two countries with wholly different demographics, population size, histories and regional locations.
    The top tax rate for earners in the UK is 45%, compared to 22% in Singapore. Slashing tax, be it corporate or personal, in Britain will incur a number of knock-on effects to its state spending model, explained Singapore's Prime Minister Lee Hsien Loong in an interview with Bloomberg's editor in chief at the New Economy Forum in November