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The Gulag beyond the Watford Gap


Tags Global EconomyTaxes and Spending


A recent post lauded the UK as a homeland of free enterprise, based on some broad statistics about immigration. The World Bank study alluded to here throws a rather different light on the numbers.

Meanwhile, the article here paints an even more depressing picture of the creeping Stalinisation of RobespiBlaire's police state and explains why this despotic charlatan has proven to be so hard to prise from the levers of power, despite the evident distaste with which so many - all across the political spectrum - view him.

"Today, the country remains starkly divided into two nations... there is the Britain of the South and East, which includes London and its Home Counties' hinterland as well as the East of England — a wealthy market economy which is individualist, cosmopolitan, internationalist and incredibly open and diverse — which we shall call Wealth-Creating Britain; then there is the rest of the country — a big-government collectivist society rather than a market economy... which we shall call Dependency Britain. Let us look a little closer at both.

"Wealth-Creating Britain, which takes up only 16% of the British landmass, nevertheless generates 42% of Britain's economic annual output with 35% of the population... 

"Total government spending in Wealth-Creating Britain comes to only 32% of GDP, below even low tax-and-spend countries such as Ireland (34%), America (36%), Switzerland (36%) and Australia (35.5%)... Indeed... if it were an independent country, the South-East of England would boast the second-lowest public expenditure burden in the OECD (after South Korea, where government spending is a mere 27.7% of GDP), while Dependency Britain Wales approaches Swedish levels of state spending (57% of GDP), as does the North-East of England (56%), which means these parts of Britain are essentially socialist economies.

"But über-Dependency Britain Northern Ireland exceeds them all: public spending has now reached a fantastical 64% of GDP in Northern Ireland, the kind of number associated with a miserable People's Republic of the 1970s. By contrast the  size of the state in Scotland (50% of GDP) and the North-West of England (47%) is more in the European social democratic mainstream — though there are pockets in both where the size of the state approaches Soviet proportions, such as Ayrshire, where government accounts for over 70% of GDP.

"Scotland is a pretty good case study in how not to run a country, which probably explains why the rest of the world ignores the socialist excesses of its recently devolved parliament in Edinburgh. Last year the state employed 28.4% of the Scottish workforce, according to unpublished ONS Labour Force Survey data; on top of that 17% of Scots were either unemployed or claiming incapacity benefit — in other words almost 50% of the potential Scottish labour force depends on the state for its income. Glasgow, Scotland's largest city and once such an industrial powerhouse it was known as "Second City of the Empire", is now the undisputed capital of Dependency Britain. More than 50% of Glaswegian households have no earned income, the highest ratio in Britain and a new high watermark for the dependency culture. According to some estimates, state-financed health spending per head in Glasgow is now higher than any other city in the world. Sadly the avalanche of money is not generating healthy lifestyles: the latest available figures from the World Health Organisation and Britain's Office for National Statistics show that Glasgow's average male life expectancy (68.7) is lower than Bulgaria and Bosnia (both 69 years), China (70 years) and Libya (71 years). Parts of the east-end of Glasgow have a lower life expectancy than Iran or Iraq."

Sean Corrigan is the author of 'Money, Macro & Markets' newsletter & Consultant to Hinde Capital.

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