Britain: the pauper with the ‘broad shoulders’
We were told constantly about the broad shoulders of the UK during the 2014 Scottish independence referendum.
The concept of the safety and security of union was probably one of the key factors that persuaded undecided voters to remain.
At the time we argued that this idea was flawed. We agreed the UK was a rich country but we argued that it was broken. That wealth was concentrated in too few hands and in such a small part of the country, that we would be better off going it alone. Our new nation may have had a lower GDP, but with a fairer, more democratic system, we could have used our wealth more wisely.
A new report published this week by the Centre of European Reform backs up what we have been saying. It looks at the UK economy compared to the rest of the top 15 EU countries and comes up with some sobering conclusions.
It paints a picture of a UK that is deluding itself that it is still an economic powerhouse. Sure, unemployment figures look great and our GDP is high, but if you look at the situation more closely the illusion crumbles.
When you adjust for price differences between countries and when you look at per capita GDP a picture of a failing system comes into focus. A country of relatively low wages and low productivity, a country where we have to work longer than other Europeans just to stay at the same level as them. A country where inequality is rife and poverty is rising to embarrassing levels. A country that is failing its youth.
We are a nation that is poorly educated. The proportion of young people in full time education is low compared to our EU counterparts. Our levels of literacy and numeracy also trail those of our continental friends.
We have poor corporate governance as well. The pay of bosses is too readily tied to short term success. Companies have no grounding in the community and success is driven solely by the bottom line.
The UK is also far too dependent on London. Only one other British region (the south east) has a GDP per capita in excess of the EU-15 average, meaning that just 27 per cent of the UK population live in regions wealthier than that EU average.
The problems are exacerbated by three key issues:
- We spend too little on infrastructure and much of what is spent is concentrated in the South.
- Investment in new housing stock is at similar levels as it was in the 1970s despite population growth.
- Centralisation of political and corporate power is in London.
The whole game is rigged against the regions. We feel this in Scotland but in many ways we are better off than most as we have wrested some power away from London.
The Brexit vote demonstrated just how widespread these issues are and shone a spotlight on the dissatisfaction in the regions. Swathes of disillusioned people registered a protest vote against a system that is failing them.
Sadly they chose the wrong demon to slay. This report shows that the EU itself is not the main barrier to fairness as most places in the EU are doing better than us. Brexit will hurt the poor the most and it will increase the percentage of UK citizens living in conditions below the EU average.
We have long argued that if the UK system was reformed to a fairer federal model with a proportional voting system then the UK would be a better place to live for the majority.
We would support such changes but also think they will never happen. The reason is that those in power will lose out if it does.
The places that need change most are places that don’t vote for the Conservatives. Devolution of power and money would lead to a weakening of their current hegemony over UK politics. Why change when you are guaranteed power for decades?
The only positive in all of this is that the illusion of stability is lifting and people are beginning to see the decay. The UK is starting to look like it has a death wish and we will no longer be placated by graphs plotting a rising GDP that only a few will ever benefit from. I hope this realisation is carried forward into the next referendum.
I embedded the report under here. It’s pretty short so take a look.