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15 March 2016updated 09 Sep 2021 1:25pm

If we leave Europe, the price will be paid by the poor

Out of Europe, the divide between the have-nots and the have-yachts would only get wider. 

By Henrietta Moore

Once the dust has settled on tomorrow’s Budget fanfare, it will be for the eagle-eyed to go through George Osborne’s figures in detail to see where the axe will fall.

But this we know: a further £4bn or so shaved off unprotected departmental budgets is going to hurt someone. Coming just a week or so after MPs voted through a £30-per-week cut to the Employment and Support Allowance benefit received by half a million disabled people, there will be vulnerable groups up and down the land feeling understandably nervous.

High earners, by contrast, will likely sleep soundly, knowing that measures such as the removal of tax relief on their pensions will have been shelved.

Sadly, Britain’s gross levels of income inequality have become something of a truism – a cold fact of life barely worth challenging. Among the litany of depressing statistics, we are the custodians of nine out of the top 10 poorest regions in North West Europe – as well as its single richest one, Inner London, with GDP per capita over three times the EU average.

The European Union context of our gross levels of income-inequality is relevant in our current debate. Nowhere else in the union do they tolerate such a glaring gulf between the have-nots and the have-yachts.

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But without wanting to sound trite, money isn’t everything. At least, not when it comes to trying to measure prosperity. GDP per capita may give us a yardstick of sorts, but it tells us almost nothing about the quality of people’s lives – whether they feel able to live safely and freely, or can access education, housing, healthcare, job opportunities and so on; the things that actually make life worth living. On many of these scores, there are plenty of Inner Londoners who would dispute any notion that they were “prosperous”.

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This recognition that average financial wealth doesn’t necessarily translate into prosperity has led the European Commission to publish a new online map showing levels of holistic prosperity in the 272 sub-national regions of the EU. It’s based on a scorecard system developed by the Social Progress Imperative and looks at everything from the cost of housing to water cleanliness, economic sustainability and social inclusion.

On these measures, Inner London looks remarkably less rosy – coming in at 63rd on the list. Meanwhile, ostensibly impoverished areas like Cornwall and West Wales fare much better in this overall measure of prosperity than their post-Soviet levels of comparative GDP would suggest.

One reason levels of prosperity in some of our regions aren’t as bad as could be assumed is the significant role EU structural funds have played over the last 40 years in helping the forgotten areas that have suffered most from our headlong rush towards a turbo-capitalist, financial services-dominated economy.

These funds have seen billions in transfers from richer regions to poorer ones, in an attempt to level the playing field. Even in the 2014-2020 period, long after the accession of many poor, ex-Soviet Eastern European nations, the UK will still receive €10.3bn in structural funding.

Over the years, these funds have gone into areas like Merseyside, West Yorkshire, Wales and the Highlands of Scotland to fund transport and telecoms infrastructure, improved education and training and even – in the case of Northern Ireland – the peace process.

“But we receive less than we put in!” pro-Brexit campaigners will doubtless say. While on the face of it that may be correct, the point here is that without the European framework supporting this redistributive policy, it’s highly unlikely that regional development would have received the same kind of long-term, consistent and meaningful support it has done. Allocations have been based on strictly economic criteria, rather than political whims.

Left to their own devices, politicians in successive UK governments have often seemed happier to lavish money on pet projects, more often than not in London (step forward Crossrail, or the Olympics). Regional parity always seems like something that can wait – witness the recent closure of the Department for Business’ office in Sheffield, despite Osborne’s mantra of a ‘Northern Powerhouse’.

Progressives are rightly suspicious of pro-Brexit campaigners’ emphasis on buzzwords like “competitiveness” – seen as a thinly-veiled code for having the power to dismantle EU labour protection and human rights laws.

Coupled with the removal of EU structural funds, the poorest people and the poorest regions would instead be entirely at the mercy of Westminster governments handing out scraps from the table. Given our elite’s predilection to revert to its myopic focus on the centre and key voting demographics, those who don’t fall into these categories should be wary of the Brexiteers’ siren song.

Professor Henrietta Moore is director of UCL’s Institute for Global Prosperity. She is a member of Defra’s Science Advisory Council but writes in a personal capacity.