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16 November 2010

How much social unrest will the UK suffer?

Britain's limited welfare state means that austerity measures will be harder to implement.

By George Eaton

After last week’s student protests, activists warned: “this is just the beginning”. But how much social unrest will Britain suffer compared to other European countries? Société Générale has put together a fascinating graphic (see below) that attempts to predict the levels of social unrest that different austerity packages will trigger.

It suggests that the threat of social unrest is greatest in Spain and Ireland, where unemployment has risen sharply since the crisis began (by 97 per cent in Ireland and by 61 per cent in Spain), and predicts that austerity measures will be hardest to introduce in the US and the UK, where social provision is low by European standards.

The OECD has previously warned that the comparatively small size of the UK’s welfare state means that the rise in inequality is likely to be more severe. “Because there is already less public spending on some areas, there is a risk that it will crumble away more quickly,” Herwig Immervoll said.

Olli Kangas, another expert on inequality, pointed out: “Sweden has a fat welfare state, Finland’s is a bit slimmer, and in the UK it is thin. If the welfare state is losing weight it will have more impact in the UK than in Sweden and Finland.”

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(Click to enlarge image)

Austerity

It also means that there is less fat for George Osborne to cut to begin with. The danger for the coalition is that theoretical savings fail to materialise in practice. A recent report from the Commons public accounts committee revealing that only £15bn of the £35bn of savings identified in the 2007 Spending Review have been achieved, and that just 38 per cent of those were considered “legitimate value-for-money savings”, was an early warning. Faced with this conundrum, Osborne is likely to resort to slashing frontline services. It is for this reason that the poor, who are disproportionately reliant on public services, are certain to be hit hardest by the spending review. Prepare for a lot more social unrest.