Is the UK falling behind other rich economies?

Andy Beckett

Now, more than ever, complaining about the state of the country is one of the main ways that Britain talks about itself. But in all the endless exchanges about the decay of public services and the cost of living, there is one theme that typically is raised only briefly before the conversation moves on. How does today’s Britain compare with other rich countries? The answer is increasingly unsettling. Despite facing many of the same problems, such as an ageing population, the climate crisis and the diminishing returns for most people from modern capitalism, Britain seems to be struggling more than other western states. From our fragile education and transport infrastructure to our sluggish productivity, our unusually high inflation to our relatively poor public health, it appears to be falling behind traditional peers such as France and Germany, while being steadily caught up by previously much poorer societies such as Slovenia and Poland.
Comparing our quality of life unfavourably with the rest of Europe’s is a traditional post-holiday ritual for some Britons, as another underwhelming British summer peters out. Yet usually this sense of inferiority doesn’t linger, as the parochial nationalism of much of our media discourages such unpatriotic thoughts, and the particularly demanding rhythms of British working life reassert themselves. Differences in customs, social values and the worth of currencies also make precise comparisons with other countries difficult. It’s easier to put envy of other societies down to the sun and long lunches we enjoy in them, and move on. This summer, however, the unease about this country’s performance became more public. “Why has Britain become so poor?” asked the Sunday Times in July. “Even eastern Europe is catching up with our sluggish GDP.” Last month, Tim Harford wrote in the Financial Times after visiting Germany, “This is what prosperity looks like – and the UK doesn’t have it.” In the same paper, another respected data journalist, John Burn-Murdoch, calculated that without London, the UK would be poorer, in terms of GDP per capita, than even the poorest US state, Mississippi. Mississippi is a sometimes beautiful, sparsely populated place with lingering poverty and illiteracy – the latter partly caused, a local journalist told me when I visited in the 90s, by some white residents refusing to send their children to school alongside Black pupils. For a supposedly modern, often self-important European country to be unflatteringly compared to one of the most maligned parts of the deep south comes as quite a shock.
In fact, “the Mississippi Question”, as Burn-Murdoch calls it, was first raised nine years ago, in a Telegraph article by the Tory journalist Fraser Nelson, partly about Britain’s alleged backwardness compared with most of the US. Then, as now, the Conservatives were in power. Unlike the last period in our history when there was widespread talk of national decline – the 1970s – the country’s deep problems can’t be simplistically pinned on Labour administrations, however hard some Tories still try to blame the distant governments of Tony Blair and Gordon Brown, or the modest powers of the London mayor, Sadiq Khan. Instead, today’s declinists make a more subtle, but not necessarily less rightwing argument. They describe Britain’s troubles as primarily economic. And, within those limits, they focus on the classic capitalist concerns of productivity, growth and wealth, rather than the distribution of assets and income, or the extent to which Britons are satisfied by their work. Meanwhile, other aspects of how the country is doing – social, cultural, environmental – barely feature in these gloomy state-of-the-nation assessments. Life for Britons is reduced to playing a part in a never-ending competition between nations, in what the government of David Cameron and George Osborne joylessly called “the global race”, a phrase that, depressingly, Keir Starmer also sometimes uses.
This notion of Britain as an economy rather than a society feels like a backward step. Fourteen years ago, in their acclaimed book The Spirit Level, Richard Wilkinson and Kate Pickett described in convincing detail “the contrast between the material success and social failure of many rich countries”. They explained: “As affluent societies have grown richer, there have been long-term rises in rates of anxiety, depression and numerous other social problems.” The economically resurgent Britain for which the declinists are yearning would almost certainly bring new problems, just as the boom of the 80s created a harsher, more individualistic country after the less dynamic but more egalitarian Britain of the 70s. A country can be seen as a success story by the media, many of its citizens and foreign observers while the lives of some of its people get worse, such as the millions of people made unemployed in the 80s so that Britain could become more “competitive”. Then again, there is an argument that we live in such tough times now – in many ways tougher than the 70s or the 80s – that economic revival has to be the national priority. Without it, there won’t be enough money to repair the damage the Tories have done to public services and to Britons’ individual finances. In essence, this has become Labour’s position under Starmer, as it has gradually given up on the idea that a better Britain can be created partly by increasing taxes on the elites who have exploited our profoundly unequal economy. It will be interesting to see if abstinence from such populist, and potentially highly popular, tax-raising policies remains Labour’s position if it makes it into office.
Even if a Starmer government does return Britain to its accustomed place among leading European economies, the issue of the country’s decline, relative to other countries, will never completely go away. As the first state to have an Industrial Revolution and one of the first global empires, and a place with a modest population and resources, Britain was never going to maintain its pre-eminence once other nations inevitably modernised. Realists have understood this for a very long time. In 1835, after visiting the US, the British entrepreneur and economic reformer Richard Cobden wrote: “Our only chance of national prosperity lies in the timely remodelling of our system, so as to put it as nearly as possible upon an equality with the improved arrangement of the Americans.” Economic decline compared with some other countries has always been our destiny. We need to accept that, and instead worry more about the state of our society.