Poor people in Britain – poorer than those in similar-sized economies

Incomes in the West Midlands are significantly lower than in the poorest regions of Germany, France, Belgium, Austria, Denmark, Sweden and Finland.

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Incomes in the West Midlands are significantly lower than in the poorest regions of Germany, France, Belgium, Austria, Denmark, Sweden and Finland.

On occasions when ‘the North South divide’ is raised as a political issue, such as George Osborne’s speech on rail connectivity in Manchester last week, this graph from the Office of National Statistics (ONS) is often cited to illustrate the difference in living standards across different parts of Britain.

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It shows the gap between incomes in the highest and lowest region of certain EU countries. The line is longest in the UK, meaning the income gap between inner-London and the West Midlands is bigger than the gap anywhere else in Europe.

It is instructive to note how the West Midlands compares with the poorest region in other countries. Obviously, incomes are far higher than the poorest part of recent EU accession countries like Romania and Bulgaria. They’re also quite a bit higher than the most deprived regions of the countries worst hit by the Eurozone crisis such as Italy, Spain and Greece.

But these are not the countries with which most people would compare the UK. We tend to think of ourselves as enjoying a broadly similar standard of living to North West European states like Germany and France. As such, it is surprising to see that incomes in the West Midlands are significantly lower than in the poorest regions of Germany, France, Belgium, Austria, Denmark, Sweden and Finland.

Different sources and indicators tell a similar story. A report by the High Pay Centre analysed the Organisation of Economic Co-operation and Development’s ‘Better Life Index’, which shows the average income for the richest and poorest fifth of the population in different advanced economies.

Again, the incomes of the poorest fifth in the UK were the lowest in North-West Europe, and closer to those of the poorest fifth in former Eastern bloc countries like Slovenia and the Czech Republic.

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Figures from Eurostat published earlier this year showed that of the nine UK regions, just two – London and the South East – enjoy levels of GDP per head higher than the EU average.

Meanwhile figures from Eurostat show that large swathes of the UK including West Wales; Cornwall; Devon; Durham and the Tees Valley; South Yorkshire; Lincolnshire; Shropshire and Staffordshire; Merseyside; Lancashire; the Scottish Highlands; and Northern Ireland are all poorer than any similar-sized sub-region in North West Europe. Inner-London is, by some distance, the richest

These statistics tell a very different story to the narrative based on economic growth statistics of a booming Britain and an ailing Eurozone. How growth is distributed is equally important. They also provide some context to the debates around the work of economist Thomas Piketty, who some commentators argue has overstated the increase in inequality in the UK.

In comparison with other countries, the UK seems very unequal indeed – which means that poor people in this country are much poorer than those in similar-sized but more equal economies.

This arises from economic policy choices that we have made in the UK, leading to an economy based on disproportionately massive pay for a tiny few at the top, mainly in London and the South East, and insecure, low-wage work for those at the bottom.

With inequality now rising again and 80 per cent of new jobs created since 2010 being located London, this situation is likely to get worse not better.

Luke Hildyard works for the High Pay Centre and is a Left Foot Forward contributing editor

6 Responses to “Poor people in Britain – poorer than those in similar-sized economies”

  1. LB

    What do you expect?

    You take their money for their pension and spend it.

    The end result is that they have no wealth because you took it and spent it on 5-a-day coordinators.

    Now you owe them a pension, you can’t pay.

    That’s the choice of people like you and the welfare state.

    Screw the poor.

    That’s why Boris is buying Wasserwerferen auf Deutchland.

  2. littleoddsandpieces

    The government cannot take the National Insurance Fund that is the source of the state pension fund, because it is ring fenced and has been full for decades, not needing a top up from tax.

    Because the NI Fund is not a tax, it cannot be emptied to pay off national debt (wrongly believed even by the Pensioners Convention) or used by government for general expenditure, including the millions spent on expenses never mind salaries of 650 MPs and 900 Peers.

    Despite all the hype about people living longer, the state pension fund is still viable, as the parent generation to thoe turning 60 now, will have worked for anything up to 50 years.

    Politicians have merely taken the state pension, especially of women, to pay themselves an 11 per cent pay rise in 2015, general election year.

    Even worse is to come in 2016, when millions lose all state pension for life:
    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

    The UK has most of its poor in work that are starving in families or as pensioners, pensioners denied a pension, and poor pensioners with little or no income other than the amongst the lowest state pension in the developed world. These are 97 per cent of the benefits bill, but the state pension is not a benefit (wrongly believed by even the Shadow Chanceller Ed Balls).

    Some agencies are not giving out vouchers to food banks to those without benefit, meaning those with delayed or sanctioned off benefits face starvation.

    Those 60 and over are not listed on the government’s unemployment statistics.

    The pension can be paid, as the state pension fund is full.

    Benefit can be paid from the 75 per cent of personal taxation that comes from stealth taxes, including petrol, alcohol and cigarettes that is billions.

  3. Leon Wolfeson

    Keep spouting nonsense. Those other economies have stronger pensions than we do, and stronger welfare states.

    Keep demanding that pensions not be paid, and JSA not be paid, etc.
    YOU want to screw the poor, yes.

  4. Leon Wolfeson

    Hi LB.

  5. Leon Wolfeson

    Using London as an example is misleading. It also has very deprived areas, the City and it#s massive salaries skews the statistics. So we’re even more unequal than that.

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