The UK: A divided country

Something that I knew, but it still shocks me, is illustrated in this data from The Economist.

Exhibit 1

In terms of regional inequality, the UK is more divided than the US. The situation in the UK is extreme. It is as if a great crime has been committed on large parts of the UK population. The regions have become sacrifice zones, feeding the finance monster in London. The same crime committed on the heartlands in the US. The crime began in 1970s and it is still happening. As inequality drives political instability, it is vitally important for all, wherever they live that something is done. As the Economist suggested nearly two years ago, “Regional inequality is proving too politically dangerous to ignore”
– The Economist, 17 December, 2016.

Depending on where you live, and how much you travel, you may not have noticed how extreme the situation is. I live on the edge of the Durham coalfield and travel daily through old pit towns and villages. If you live where I live, London is another world. Compared to much of the North East, much of the South East plus westwards to Bath seems like another country. Both the statistics and the reality have been known for a long time. In 2014 the Mail published an article with the headline, “Parts of Britain are now poorer than POLAND” with a series of graphics based on Eurostat data including this one where the British Isles appears twice!

Exhibit 2

The numbers correspond to the percentage difference of local GDP per capita to the EU average. Similarly to the more recent Eurostat data presented in Sean’s post on Northern Ireland

Exhibit 3

 

we can see that North East, Northern Ireland, and Wales have not been doing as well as say Slovenia. Now you could argue that this is more the fault of London than Brussels, but may be this data does help explain why some people in these regions might not be so emthusiastic about the EU. The wider EU context is discussed in more depth here.

In the UK regions, any disenchantment that was already brewing was further fermented by austerity (as discussed here by Peter). Austerity further disadvantaged those regions that were already suffering. The map below is from a paper “Did Austerity Cause Brexit?” by Thiemo Fetzer of the University of Warwick. It shows the loss of income due to asuterity across different regions of the UK. Again, we see that it is Cornwall, Wales, Northern England and Lincolnshire that have been hit the hardest.

Exhibit 4

 

The case is black and white, Britain is divided by extreme regional inequality. This problem has been building since the 1980s and political parties of both colours have not done enough to stop it. Inequality drives politically instability and eventually everyone suffers. Ideas such as the Green New Deal could be a part of a solution. Land value tax is another. We desparately need more than one.

Comments

  1. Paul Wright -

    Thanks then to all those so called “centre parties” who have delivered this sad state of affairs to us over the past 30 years.

    My local pub landlord when asked what he thought about the clamour for yet another centre party replied “it’s like asking for a second shit sandwich isn’t it”. LOL

    Thanks for the great blog. With this and Tax Research blog, who needs the MSM!

    Regards and Thanks

    Paul

    1. Charles Adams -

      Thanks Paul. I agree, so called ‘politics of the centre’ has completely failed to deliver for the median voter.

  2. Peter May -

    As well as a Green New Deal we need local banking, so locals can create credit without being ignored by the Head Office of large banks who usually consider they have bigger fish to fry. Banks make more political donations worldwide than anyone else and of course they have their own agenda – which must be why, for example local German credit unions can create credit, but it’s forbidden in Britain!

    1. TonyB -

      Peter,

      These are really needed. My local Credit Union (LASA) in west Wales was allowed to fail, manned by brave volunteers and essential to poorer families. Our GP funds are in it and I’m still waiting those the cheque, even though we were promised it a while back. I know of families with no money as their wages went into this CU and still no pay out.

  3. Sean Danaher -

    The exhibit 4 map is more or less as I might have expected – former heavy industrial regions hit to the highest extent.

    One oddity is the Island of Arran – I really have no idea why it would be much more affected than the other Scottish islands.

  4. Graham -

    Can I echo Paul’s comments above in his final para.

    I am always amazed that the British (or is it just the English?) seem happy with, or at least insufficiently disturbed by, this state of affairs (also described in the Tweet blog) that they/we do nothing about it and put up with a dysfunctional voting system which delivers a dysfunctional government and are content to be ruled by people of no particular ability and promoted far beyond their capabilities, while “dark” forces of money, privilege and entitlement pull the strings and are fast-tracked into positions of power.

  5. Samuel Johnson -

    It’s not another political party the UK needs, it’s a new voting system — one that removes the political impunity for leaving large parts of the population behind.

  6. Pingback: The divided UK
  7. Robin Stafford -

    With respect this is only half the story and generalising about London, whilst being fun and pandering to traditional regional prejudices, does not tell the whole story. As I’ve mentioned before, a brief search of poverty data from the likes of Resolution et al, will show that London’s levels of poverty are as high as anywhere. The total number of people living in poverty in ‘London’ is about the same as entire population of the North East. The problems and cost of housing are more acute there than anywhere else. London is not unlike some developing country capitals in the massive gap between rich and poor, often living a few streets apart.

    The serious point is that we need tackle regional inequality AND social inequaity. It would be quite easy to come up with a (much needed) regional investment programme which merely amplified the social and class differences and made things worse.

    To add to the problem, from talking to economists working in this space, the quality of data available is relatively poor, making it hard to tease out differences within areas and across social groups. There are too many ‘averages’, where the extreme wealth of a few distorts the perceived average incomes of the many.

    Charles – time to get out more! Come down to London and we’ll show you that it is rather more than the City, Westminster and the wealthy of Kensington & Chelsea. In case you missed it, Grenfell Tower was in that borough.

    This is not in anyway to underplay the need for a decentralisation of both power and investment. But regional differences are only part of the story. Cumberland where I grew up has some very wealthy people and wealthy farmers too, as well as areas of poverty and poor hill farmers.

    1. Charles Adams -

      Good point and I agree. I often write about inequality being one of the biggest problem of our time, see e.g.

      http://www.progressivepulse.org/economics/if-only-you-could-buy-happiness

      http://www.progressivepulse.org/economics/houses-wealth-and-income

      and

      http://www.progressivepulse.org/economics/poisonous-tendencies

      In this post I chose to focus on the regional aspect but I will never forget that within regions, especially within London, we see extreme inequality.

  8. Robin Stafford -

    Thanks Charles
    I feel that its too easy for commentators to slide into a easy ‘its all London’s’ fault, so we end up with ‘regionalism’ as just another form of divisive xenophobia.
    Ive seen the City close up so can be more vitriolicaly critical than most. I’d share the views that we are massively over centralised politically (though the NE did reject the option for more local power…). Ive also watched the replacement of once affordable social (and private) homes by endless tower blocks of apartments for the uber-wealthy – too many of them foreign owned and/or empty. Housing is a far bigger problem in London than anywhere else. And a much bigger cost
    Also worth noting that London is a Labour stronghold, and did not choose to buy the Leave campaign’s arguments that the UK’s problems are caused by foreigners, be they immigrants or the EU. There are many parts of the UK that need to face up to some fairly xenophic if not racist views that are all too prevalent. No coincidence that the traditional strongholds of the EDL and BNP are in the East and NE – and that Jo Cox was murdered in that part of the world. When I go back to Cumberland I hear views expressed that reflect the 1950s, not the 21st Century. Those lurking attitudes in a proportion of the population make them susceptible to the siren voices of UKIP and todays Brexiteers. And they tend to be in the least diverse areas of the country – not a good indicator.
    So – a plea more of a focus on root causes. Starting with the specific policies pursued by this government, which create yet more division, both social and regional

  9. TonyB -

    Charles,

    I live in south Wales and have seen a proud working community brought to its knees. I was born into a tin and coal community; The Navy was also a traditional route to work for teenagers. Now the supermarkets are the workplace.

    I have noted over the years how GDP, measured for the regions using Gross Value Added (GVA) has only grown and benefited London and the south. [1] The regions seem to be held in deliberate and permanent recession. An economic and political Tory arm lock!

    I wrote to Grayling’s ministry in 2016/17 on behalf of the Green Party to argue that investment e.g. in electrification to Swansea in this case, was highly beneficial in terms of a business case as well as helping regional GVA imbalances. I had no reply except I published in the south Wales newspapers. Similarly investment in the Swansea lagoon, ideally by regional or EU funding (not private equity pirates) was essential to boost regional growth and R&D Green energy technologies.

    I agree this is an economic crime scene. How do we fight it, and get it recognised as a crime scene – this is our grand challenge. I am active, so fighting, and the local Labour MPs are now in intermittent dialogue with us, especially nearer elections. BTW I visited the Durham coalfields in the 1970s and saw the conditions. You short essays are seminal, and I love the other writers as well.

    [1] https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN05795

  10. Graham -

    Danny Dorling’s latest book, “Peak Inequality: Britain’s ticking time bomb” explores many of these inter-regional and indeed intra-regional issues, with the help of some very illuminating mapping which shows regions and boroughs drawn in proportion to the parameter being measured. (eg Arts Funding or value of housing sold etc)

    On the issue of London and regionalism, while it is true that there are many poor in London as well as the super-wealthy, it is worth considering if the two are not connected, for £billions have undoubtedly poured into London & the SE, in several ways, but this “largesse” has been very unevenly distributed – for a few to be very rich requires many to be poor. Meanwhile, the rest of the country is deprived of investment.

    And to suggest that other regions are unenlightened redoubts of xenophobia on the basis of anecdote is to commit the same mistake as Londoners complain about.

    Finally, while this government, imho, is the most vile collection of near-criminals in my memory, the problem goes deep into how our political system works, including the power of money behind the scenes, the party system, the influence of lobbyists (and not just on behalf of business) and how the ordinary citizen, while having been given a vote every few years (to keep us quiet), has effectively been neutered and has little or no influence politically. In that latter respect, the political influence of the typical citizen has advanced little since the demise of democracy (albeit flawed) in Ancient Athens.

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