Posted by Euan Bennet on 20/09/2013
This is a companion piece to yesterday’s. The question that is never asked by the media is “can we afford to stay in the Union?”, yet it is becoming clearer that this is an issue that people are going to have to consider. In order to make an informed decision one must investigate both options in equal detail. There are no guarantees under the Union just as there are no guarantees with independence, but there are plenty of indicators for how both could turn out. In order to assess how things might get better or worse, we should establish a baseline of how things are now, and how we got here. After all, the best way to predict future behaviour is to look at past behaviour.
We frequently see the Yes campaign making the assertion that the UK is the fourth most unequal country in the Western world , so let’s take a look at the figures to see how they stand up.
Economy and Inequality
Let’s start with the headline points. The UK is the 6th richest country in the world in terms of total GDP. Sounds great, except when you look at how that wealth is distributed. The UK is the seventh most unequal in the OECD. Wikipedia has handily already compiled historical figures into a nice table. Three of the countries in the OECD that are more unequal than the UK are Mexico, Chile, and Turkey. There are several definitions of “developed country”, but for example this list (citing page 166 of this report) shows that if we do consider only developed nations, the UK is indeed fourth most unequal: behind the US, Portugal and Israel.
The wealthiest 10% of UK citizens are 4.4 times better off than the bottom 50% combined. 62% of total wealth is owned by the top 20%, while the bottom 50% own just 9% of the total wealth between them. The latest figures from 2010 show that the UK has become more unequal compared to the previous figures from two years earlier.
Since 2010 there has been further increases in inequality, which have been contributed to by the public service and welfare cuts implemented by the current Westminster government (figures on page 27 of the report that links to). Successive budgets have made an indirect transfer of wealth from the poorest three deciles to the richest two.
- Living standards in the UK are decreasing more rapidly now than at any time in the last 30 years, with around a third of adults lacking three or more “essentials” for living.
- Wages have fallen 5.5% in real terms in the past three years, the fourth-highest fall of any EU member state.
- Child poverty has risen in recent years and now stands at 27%. Further cuts to welfare are expected to increase this figure still further.
- The number of people needing to turn to food banks because they can’t afford to feed themselves has risen from 61,000 in 2010 to nearly 350,000 this year.
- I haven’t even mentioned the bedroom tax or the rise in zero-hours contracts.
These statistics are entirely a reflection of policies pursued by successive Westminster governments. They represent choices that have been made.
Making an informed decision
One of the questions that the media should be asking in relation to the referendum debate is: how did the circumstances arise in the sixth-wealthiest nation in the world where inequality is so bad that over a quarter of children live in poverty? Anyone who may yet decide to vote No in the referendum should at the very least examine the figures cited above and make sure that they are comfortable in voting to endorse a system that has systematically and continuously brought the UK to this economic scenario, because that is exactly what a No vote will be interpreted as – an endorsement of the system. How could it be interpreted otherwise?
This post is not intended to be a whinge about policies that I don’t like – it is intended to be a reality check of the situation that the UK is in. Nor is the post an effort at negative campaigning – I am simply asking that people acquaint themselves with the reality of the economic situation in the UK today, and that they understand that this situation is the result of choices made by successive Westminster governments.
[Updated 8.20am 24/09/2013: added more links to clarify “4th most unequal in West… 7th in OECD” statement.]