New reasearch shows UK's poorest regions falling behind rest of Europe

By agency reporter
December 12, 2019

New research based on data from the European Union shows that the UK's poorest regions have fallen further behind the rest of Europe over the past decade.

The results show that the UK’s poorest regions are poorer than anywhere in France, Germany, Austria, Belgium, the Netherlands, Luxembourg, Denmark, Sweden or Finland. The relative performance of the UK’s poorest regions has also worsened over time.

The High Pay Centre's analysis of the EU data found that the number of UK regions with GDP per capita below 75 per cent of the EU average increased from three in 2008 to seven in 2017 (the most recent figures).

The seven regions – Southern Scotland; West Wales and the Valleys; Cornwall and the Isles of Scilly; Lincolnshire; Tees Valley and Durham; South Yorkshire; and Outer London – East and North East – are all poorer than anywhere else in North West Europe. 

The number of regions below 90 per cent of the EU average has also risen from 18 to 23 since 2008.  The EU uses the 75 per cent and 90 per cent thresholds for allocating funding to poorer regions, meaning that the UK could be eligible for increased funding if it remained in the EU.

The High Pay Centre's report concludes: "We have seen during the EU referendum campaign, the claim that UK was ‘shackled to a corpse’ as a result of EU membership. Yet this sense of superiority seems wildly misplaced. Large swathes of the UK can only dream of achieving the levels of economic activity and living standards of even the poorest parts of supposedly similar EU countries.

"Proposals to increase levels of taxation and public spending; expand trade union and collective bargaining coverage; or introduce worker representation into corporate governance structures in the UK are also regularly attacked for being ‘anti-business’ with the implication that they would be harmful to the economy. However, these measures are commonplace in other European countries.

"They are obviously not damaging North Western European economies to the extent that the poorest parts of the UK are held back by the more extreme version of capitalism practiced in this country. This suggests that the risks associated with the more stakeholder-oriented model found on mainland Europe are exaggerated. while its advantages are under-appreciated."

* Read the High Pay Centre briefing here

* High Pay Centre


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