Budget 2013: how George Osborne can save the economy So it was to prove. Before long, Sweden was celebrating the abolition of its deficit and the fastest economic growth in Europe. The tax cut, which almost entirely paid for itself, came alongside deeply controversial cuts to welfare, but Borg felt he had to make a choice. It was elegantly summed up in a new campaign slogan: "We are the new workers" party." That is a claim that many can make, but Borg had given low-paid workers the equivalent of an extra month's salary a year. Good economics became good politics, and the Swedish Conservatives were re-elected for the first time in history. Just as it is folly to draw too many lessons from US politics, no one (least of all Borg) would argue that the Swedish model could be superimposed on Britain. In many ways, Borg has it easier - it's far simpler to cut tax if you start with the highest taxes on the planet. But Cameron convened these Northern summits because he realises that different lessons can be learnt and applied in different ways. What unites the successful Nordic economies is that they did not start by worrying about opinion polls. They worked out the best policies, and then decided how to sell them to voters. In Sweden, Borg has changed the terms of the debate. But in Britain, economic policy often seems stuck in an intellectual time warp, with everything considered with reference to the 1980s. Addressing Tory MPs in private on Wednesday night, Osborne said his options were between "Heseltine-style capital allowances" or "Lawson-style tax cuts" as if his only ammunition could be found in history books. He rejects calls for Swedish-style tax cuts on the grounds that they are "Reaganite," a word left over from the 2005 Tory wars when it was used to attack followers of David Davis. Such ill-fitting political labels do nothing to encourage the fresh thinking that is so desperately needed. Today's economy is, anyway, utterly different from that of the 1980s. Mass immigration has broken the link between jobs and the dole queue, and just over half of the new jobs which Cameron boasts about are accounted for by foreign-born workers. Borrowing millions to build more bridges, roads and tunnels will certainly create jobs - but may benefit Gdansk as much as Gateshead. This is why, when faced with a choice of stimulus, tax cuts can be more effective - as the Swedes have demonstrated. But Osborne has to deal with HM Treasury, an awesome institution still hard-wired with the failed assumptions of the Brown years. Soon after he was elected, Osborne met a fellow (non-European) finance minister and discussed the impending cuts: in total, just under 4 per cent of state spending. He asked his guest: what to do? Should I make these cuts up-front, or spread them out over years? He was advised to act quickly, and get it over with. "But everyone in the Treasury says I should spread them out," he replied glumly. His guest left with the impression that Osborne was a prisoner of his officials. Bad ideas are far harder to dislodge than bad governments. The British government machine remains fearful of spending reductions, and deeply sceptical about tax cuts. This leaves Britain stuck in the same old groove, pushing the drug of cheap debt while economic debate is reduced to a petty scramble for headlines. The Liberal Democrats" proposed mansion tax would raise hardly any money, for all the upheaval it would cause. Osborne recently boasted about cutting tax for 24 million people, but didn't say it was by 90p a week. Ed Balls's latest tax cut offer works out at a derisory 67p a week. Each party is trying to come up with policies that sound radical, but aren't. The Nordic way has been to come up with policies that are radical, but sound dull. Borg has posed not as a ponytailed Thatcher but a slightly bored economist prescribing basic medicine. His tax cuts were justified not by grandstanding slogans (they came later) but by a 270-page book on labour market policy. His latest move, an instant, deficit-financed trimming of corporation tax from 26 per cent to 22, was described as an obvious way to "protect" the tax base. Borg has ensured the success of the Swedish pro-growth revolution by making it sound like most self-evident thing in the world. None of this was, alas, on the agenda at yesterday's Nordic summit. It was about "green growth," an area in which Cameron certainly has interest and expertise. But when it comes to kick-starting an economy, Britain is giving the Nordics a lesson in what not to do.