/ 20% Richer Anyone?

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Jim Fraser 04 Dec 2019

Don't bother engaging me in  a discussion about the usefulness or otherwise of GDP and GNI because the tiny details make no difference to my point.

Examine the nine EU neighbours and near-neighbours across NW Europe. These are the countries we have most in common with. How does our income per head compare?

Well the average wealth generated per person is measured using GDP or GNI per capita by various methods and these are all available on the World Bank website. 

So take both GDP and GNI measures and take a Purchasing Power Parity version and another version, giving a range of different approaches and average them to compare the UK with its EU neighbours. (It's not a flawless method but the answer doesn't come out much different whatever way you try to do this.) 

They are on average 20% better off than us. The major exception is France which, as the other unreformed post-imperial wreck, repeatedly fights us for bottom place.

20%. Yes, a fifth. 

That's like removing full VAT from everything.

If we abandon our post-imperial neuroses, stay in the EU, abandon the twentieth century class war for a more effective political creed, and participate fully in the European project, then we can be 20% richer. Maybe more, if we miraculously become clever enough to take proper advantage of our many economic advantages.

It sounds good to me. How does it sound to you?

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Sharp 04 Dec 2019
In reply to Jim Fraser:

That's all very well but do you want bendy bannanas or not?

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wintertree 04 Dec 2019
In reply to Jim Fraser:

It sounds like half the picture.

The other half - not captured by GDP - is the cost of living in each country and how it differs.

Given the stupid housing market in south east England, some of the UK is probably 40% worse off...

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DaveHK 04 Dec 2019
In reply to wintertree:

> It sounds like half the picture.

> The other half - not captured by GDP - is the cost of living in each country and how it differs.

Is that not exactly what purchasing power parity accounts for?

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wintertree 04 Dec 2019
In reply to DaveHK:

So much for my early morning reading skills.  I missed that paragraph.

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pec 04 Dec 2019
In reply to Jim Fraser:

> If we abandon our post-imperial neuroses, stay in the EU, abandon the twentieth century class war for a more effective political creed, and participate fully in the European project, then we can be 20% richer. Maybe more, if we miraculously become clever enough to take proper advantage of our many economic advantages.

> It sounds good to me. How does it sound to you?

Since we find ourselves in this position after 45 years of EU membership and France is in the same boat as us and is very much 'at the heart of Europe' then how exactly does staying in the EU remedy this situation?

By all means argue for our continued membership but this isn't an argument for it.

I presume if you want to get rid of class war then you'll be voting Tory on the 12th, anything else is a vote to put class war front and centre of all UK policy making for the next 5 years ;-)

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stevieb 04 Dec 2019
In reply to pec:

> I presume if you want to get rid of class war then you'll be voting Tory on the 12th, anything else is a vote to put class war front and centre of all UK policy making for the next 5 years ;-)

That depends on who you think is engaging in class war most successfully

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elsewhere 04 Dec 2019
DaveHK 04 Dec 2019
In reply to wintertree:

> So much for my early morning reading skills.  I missed that paragraph.

Fair enough!

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MonkeyPuzzle 04 Dec 2019
In reply to Jim Fraser:

And this is before the 4% uplift in council tax if we want to even maintain current services under the Tory manifesto (not even accounting for Brexit).

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blurty 04 Dec 2019
In reply to Jim Fraser:

I was going to reply that a Brexiteer would argue that leaving the EU would be like having zero rate VAT, like many people I suspect I was laboring under the misapprehension that VAT basically 'goes to the EU' - but I just thought a do a bit of light googling to check my facts.

VAT generates around £130bn for the Exchequer, our net contribution to the EU is around £9bn.

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john arran 04 Dec 2019
In reply to blurty:

The whole financial justification for Brexit is purely playing to the gullible, as it's been comprehensively shown that we'll be poorer as a country under any form of Brexit, and massively poorer under the kind of severe Brexit that Johnson is lining up for us all.

If there were to be any advantage of Brexit (and I've yet to be convinced by any of the arguments) then it surely would revolve around the idea that individual decision-making and deal-striking could be somehow more effective than their collaborative equivalents. I don't buy it, but I can see how it could sound convincing, particularly to those who feel the UK is in some way exceptional.

But being better off outside the EU as a result of no longer paying membership fees? That would be like changing jobs for a much lower paying one simply to save pennies on the bus fare to work each day.

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Eric9Points 04 Dec 2019
In reply to Jim Fraser:

The USA comes top of the list for disposible income followed by Switzerland: https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income

Norway is best in Europe other than Switzerland but the cost of living in Norway is of course eye wateringly high.

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Offwidth 04 Dec 2019
In reply to Eric9Points:

The US needs a huge proportion of that disposable income to buy the most expensive  health insurance in the world. 

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Eric9Points 04 Dec 2019
In reply to Offwidth:

It's also incredibly unequal and has shocking levels of poverty.

My point is that PPP is not a great indicator of whether a country is a good place to live in.

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Jim Fraser 05 Dec 2019
In reply to Offwidth:

> The US needs a huge proportion of that disposable income to buy the most expensive  health insurance in the world. 

So it's not really disposable. Their healthcare costs per capita are around 2.5 times that of the UK. Completely outrageous exploitation. 

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Jim Fraser 05 Dec 2019
In reply to Eric9Points:

> It's also incredibly unequal and has shocking levels of poverty.

> My point is that PPP is not a great indicator of whether a country is a good place to live in.

Correct. 

I would say that a good place to live is good for 
- Liberty
- Safety
- Happiness
- Prosperity

PPP only helps us get close to the 4th one.

In general, NW Europe does well on the other three. This week anyway.

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wbo2 05 Dec 2019
In reply to Eric9Points:I live in Norway,  visit the UK.  Norway certainly isnt cheap but when I visit the UK a lot of things dont feel cheap in comparison.

If you want to really break your spirits compare GDP for separate areas of the UK to parts of Europe.  Outside the southeast you drop to levels youd associate with eastern Europe very quickly.

 I rarely agree with Pec but staying in the EU wont fix this magically .  Then again neither will coming out, and you've had 9 years of Tory government already.. 

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john arran 05 Dec 2019
In reply to wbo2:

>  I rarely agree with Pec but staying in the EU wont fix this magically . 

Of course it won't, because the cause was always UK government priorities and nothing to do with the EU. There'll be no 'fix' unless UK government priorities change, and people can make up their own minds as to how likely it is that non-SE regions will be better supported if Johnson wins a majority. The EU has always been notably active in funding projects in poorer regions, so leaving is extremely likely to make things a whole lot worse in that respect.

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Phil79 05 Dec 2019
In reply to john arran:

> The EU has always been notably active in funding projects in poorer regions, so leaving is extremely likely to make things a whole lot worse in that respect.

Which is part of the awful irony, the areas benefiting from the most EU funding are also by and large areas where leave vote was strongest.

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Offwidth 05 Dec 2019
In reply to Phil79:

Across the north the white working poor are often saying they will vote for Boris. The BBC had an election focus yesterday on people in foodbanks in Grimsby and, although the sampling won't be formally valid  there seemed to be a voting split as per the UK. Even the people running the food banks didn't say they supported Labour.... utter madness in terms of people knowing what is good for them. Still the polls and weird local effects mean a Boris majority is far from certain.  The old tribes have become new tribes that match the brexit demography.... old, white, less well educated, small town voters are the main Boris army.

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stevieb 05 Dec 2019
In reply to wbo2:

>  I rarely agree with Pec but staying in the EU wont fix this magically .  Then again neither will coming out, and you've had 9 years of Tory government already.. 

Yes, I agree. EU membership or not will definitely impact on these problems, and the mindset may be related, but our level of  EU involvement is not the root cause.

Why is the UK the poorest, and the most unequal economy in north west Europe? Is it low investment levels? poor infrastructure? On-going poor worker relations? A badly implemented social security system? high land prices? A system that rewards owners before workers? Poor education? Low aspirations? Resource curse, from north sea oil or the city of London? Whatever it is, 90% of the solution is within our own shores.

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Eric9Points 05 Dec 2019
In reply to Jim Fraser:

> Correct. 

> I would say that a good place to live is good for 

> - Liberty

> - Safety

> - Happiness

> - Prosperity

> PPP only helps us get close to the 4th one.

> In general, NW Europe does well on the other three. This week anyway.

Ummm, Liberty and safety? We're free and safe in the UK, the average UK citizen can say pretty much what's inside their heads without fear of getting their front door kicked in at 4 am by the special branch.

Happiness? How to measure that and is it as much a genetic factor as a societal one?

Sure you're not suffering from grass is greener syndrome?

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neilh 05 Dec 2019
In reply to Offwidth:

I saw the same programme, from what I remember they were not old voters being interviewed.

Far from it.

Labour has a big issue - its become marginalised from alot of its core working class voters.

Osborne was right a few years ago with strategic plans to drive the Cons up North so to speak ( he saw that it was ripe for a change). Not sure he would agree with where it has gone, but the strategy is there.

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Eric9Points 05 Dec 2019
In reply to wbo2:

> If you want to really break your spirits compare GDP for separate areas of the UK to parts of Europe.  Outside the southeast you drop to levels youd associate with eastern Europe very quickly.

Ummm, well...

The differences in wealth generation between different regions in Eastern European countries may be as great as those in the UK. I don't know and suspect you don't either.

The point of the UK is that wealth generated in London or Edinburgh is distributed across the whole UK. At a local level I think this breaks down ... even inside London but at a regional level I think it doesn't.

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PaulTclimbing 05 Dec 2019
In reply to Jim Fraser:

This doesn't emphasise either position of leave or remain... one way you could think UK 20% down as a consequence of the EU another way that UK could achieve 20% higher for being in. Could you find a more nuanced table of rates of change of member states GDP per year changes for each country. that might show the relative trends in the EU member states.

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captain paranoia 05 Dec 2019
In reply to blurty:

> like many people I suspect I was laboring under the misapprehension that VAT basically 'goes to the EU'

Please tell me you are joking about that misapprehension...

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Jim Fraser 06 Dec 2019
In reply to wbo2:

> If you want to really break your spirits compare GDP for separate areas of the UK to parts of Europe.  Outside the southeast you drop to levels youd associate with eastern Europe very quickly.

Yes. Once you dig into the OECD regional GDP figures you do have to wonder if London governments hate most of England.

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Jim Fraser 06 Dec 2019
In reply to PaulTclimbing:

The grumbly country that wants to live in a never-existing dream world of imperial grandeur and never fully participates in the European project does not do well while 20+ other countries participate and prosper. This is pretty simple.

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Eric9Points 06 Dec 2019
In reply to Jim Fraser:

You know I'd far rather live in Montgomeryshire, Northumberland or Sutherland than London.

Quality of life is determined by many things and GDP or PPP per capita comes quite far down the list in my opinion.

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PaulScramble 07 Dec 2019
In reply to Jim Fraser:

And just like that, we're all 20% richer folks! It takes a socialist to come up with these crackpot economic utopias. 

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wbo2 07 Dec 2019
In reply to Eric9Points:

 Well GDP for different regions is easily available as its published yearly.  It's interesting to look at.

  You can indeed argue that you should only look at a countries GDP as its distributed but that ignores a few factors. As an example the % of public sector jobs in the market increases outside london. There is always pressure to move these out of London as it's cheaper, and distributes wealth. But that means the regions have lots of jobs where the attitude is ' these jobs dont make money, let's pay them less', and you're a slave to public funding. 

  Regions need to generate their own income, rather than rely on extended charity

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Eric9Points 07 Dec 2019
In reply to wbo2:

So in other countries is there less of a disparity in income per capita between the different regions? 

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Jim Fraser 19:50 Tue
In reply to Eric9Points:

> So in other countries is there less of a disparity in income per capita between the different regions? 

Varies.

So there is Prague with about 3 times the GDP per capita of another Czech region. There's Hamburg with over twice that of another German Region.

There is Inner West London with NINE TIMES the GDP per capita of the Welsh Valleys. 

This is probably the simplest set of regional figures to access:
https://en.wikipedia.org/wiki/List_of_European_regions_by_GDP

https://en.wikipedia.org/wiki/Economy_of_the_European_Union

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Jim Fraser 20:13 Tue
In reply to PaulScramble:

> And just like that, we're all 20% richer folks! It takes a socialist to come up with these crackpot economic utopias. 

Socialist? Well that's a long way off the mark. 

Crackpot economic utopias? You mean places where ordinary hard working people aren't worrying themselves half to death every week about how to pay for their housing.? Is that the kind of crackpot utopia you mean?

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