Thoughts on Switzerland

Bring the Power to the People!

Küblis, Grisons, Switzerland.

My way of wishing people a happy new year is to assess, in small measure, why Switzerland is so successful and prosperous.

This is more of a short editor’s note. For a thorough read, I’d point to two pieces:

· Analyst Phil Lojacono on the Peter McCormack show explains the country’s longstanding success by:

· A highly decentralised system of power, with Cantons (provinces) and Municipalities having broad responsibilities and tax raising levers.

· Frequent referendums and close contact with local authorities means citizens are highly involved in decision making, ensuring higher accountability and performance.

· The FT’s 2025 piece, “Is Switzerland Losing its Place in the World?” talks of how:

· Various Swiss-focused executives have made the point of late that the country may be losing competitiveness.

· Various high profile corporate scandals of late have weighed on the country’s reputation.

· Switzerland, and particularly its pharmaceutical industry, was hit particularly hard with US tariffs, highlighting the vulnerability non-EU states have of a not being part of a negotiating block.

· Nonetheless, the country has reinvented itself before,

“the end of banking secrecy in 2018 spurred a shift towards advisory-led wealth management; rising labour and currency costs pushed exporters into difficult-to-replicate niches.”

My thoughts:

· Infrastructure:

Alongside rugged mountains and rivers run roads, railway lines and cycle paths. Infrastructure is imagined, built and maintained. The multiplication of those developments eases transport, access and communications – the movement of goods, people and services.

The challenging geography of Switzerland dwarfs any impediment the UK may have to infrastructural upgrades.

The “Snow Economy” of tourism, resorts, skiing equipment, etc, could contribute as much as 5% of GDP.

· Local Government:

I wrote a piece in October 2025 on how local authorities in the UK should have more power.

Residents will often have a say on how the money of the Municipality, Canton, or Nationally, is spent. That increases accountability, transparency and standards.

Lojacono added that Switzerland has in practice a taxation formula of 30:40:30. Citizens pay around:

· 30% of taxes to the local council (contrasted to around 7% in the UK)

· 40% to the canton (province or regional government equivalent such as the Scottish government)

· 30% national government

Another point he raised was that high salaries attract top talent which in turn runs the local council better. Indeed, the business of running a council is often work of administration and bureaucracy.

So many councils can feel like ‘large country clubs’

· Corporate tax:

Federal corporate tax is 8.5%. Cantons and municipalities add their own taxes, bringing combined effective rates to between 12–21%, but cantonal competition keeps rates low.