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25 March 2023

Why don’t we realise how screwed up the UK really is?

Wherever you look in the data, it feels like Britons are working more and paying more and getting less than our peers.

By Jonn Elledge

I’ve always been suspicious of the notion of “false consciousness”. The idea that people vote the way they do because they simply don’t know any better has always struck me as patronising in the extreme. More than that, it’s unhelpful, denying as it does the possibility that the left needs to do better – or that there is anything on offer from the right that, however off-putting we might find it, nonetheless rather appeals to people.

Recently, though, I’ve found there’s another sort of false consciousness which I do buy into. There have been growing signs, these last few years, that – compared to our peer countries – the standard of living in this country just isn’t very good. And it feels like we haven’t noticed.

We all realise that we’re paid less than counterparts in the US, I’m sure. The internet is awash with posts from people across the Atlantic doing uninspiring mid-level jobs and worrying that their six-figure salary isn’t enough to get them a decent quality of life; but we also know that Americans get terrible holiday entitlement and massive medical bills, and anyway the US is an economic superpower. If there’s anyone we expect to simply be richer than us, it’s surely the Americans.

Much more worrying is how we compare to other countries we might assume to be peers. Canada, Australia, Germany, France: a recent report from the Resolution Foundation and the Centre for Economic Performance at the London School of Economics found that the UK’s recent economic performance has left us both poorer and more unequal than every one of them. The upside of these figures is that they go a long way to disproving the pernicious Truss-ite thesis that higher inequality is the price you pay for vibrant growth. The downside is we all have to live in this country. The same report found that a typical household in Britain today is 10 per cent poorer than their French counterparts; the poorest fifth are 20 per cent poorer. This is a big reason the cost-of-living crisis is hitting so hard – we just don’t have the reserves to absorb the hit.

[See also: The twilight of the British Union]

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Things get worse the more you look into them. There’s the fact that Britons are working almost as many hours as Americans or Australians, despite our wages being lower than those of the more laid-back Europeans. We have more people in extreme poverty than comparable European countries, too (though not, to be fair, as many as several others in the anglosphere). Maps from Eurostat have long shown that, outside the rich south-east, our productivity is on a par with that of southern or eastern Europe, not the rich north-west Europe we instinctively compare ourselves to. Similar data from the Centre for Cities has shown our cities are underperforming, with much of the Midlands and the North having gross value added on a par with the former East Germany.

And now, after 13 years of the Tories, surprise surprise, public services are crumbling, too. (We also have fewer hospital beds than comparable countries.) The shocking thing about headlines like the Evening Standard’s “UK’s tax burden on course to hit highest level since Second World War” is not that we’re going back to the sort of punitive tax rates that inspired George Harrison to write Taxman (we’re really not): it’s that we’re paying so much to get so little. The same is true, whether you’re renting or buying, in our joke of a housing market. Wherever you look in the data, it feels like Britons are working more and paying more and getting less – and doing so in a country that looks and feels increasingly shabby, to boot.

Why aren’t we angrier about this? Is it that the media has done a terrible job of informing people how things are going? Is it the same sort of parochialism that stops us from learning languages, protecting us too from noticing how life here compares to that elsewhere? (We watch a lot of American television, sure, but as already noted that doesn’t count.) Are we just in denial? What?

A piece of economic history I’ve always found haunting, ever since I read John Kay’s The Truth About Markets nearly 20 years ago, is that Argentina used to be one of the richest countries in the world. On the eve of the First World War its living standards were ahead of southern or eastern Europe, on a par with Germany or France. Over the course of the following century, though, bad government, stagnation and repeated crises caused it to tumble down the league tables. Today it barely scrapes into the top third, and on some measures its GDP per capita is lower than that of Kazakhstan.

The point is not to compare Britain to Argentina, whose history includes many horrors for which even this government provides no parallel; it’s simply to point out that you can’t assume that rich countries will always remain so. Relative decline can happen. So why aren’t we taking steps to stop it? I can’t help but think one reason is we simply haven’t noticed.

[See also: Fifty years after joining the European Communities, Britain still doesn’t know what it is or wants]

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