“The sick man of Europe” is a phrase reportedly used to describe the Ottoman Empire by Tsar Nicholas II in the middle of the 19th Century. It has been used since then periodically to describe whichever nation of Europe is lagging substantially behind the others.
Throughout the immediate post war period it was a title regularly and increasingly attributed to the UK. As the other economies of Europe surged ahead on a heady cocktail of Marshall Aid and increasing economic co-operation from within the Common Market, the UK lagged behind. The desperately sick economy reached a nadir in the rough years from the devaluation of the pound in 1967 to the catastrophic recession caused in in the early 1980s through OPEC oil price rises of 1981 and Margaret Thatcher’s brief and doomed flirtation with monetarism. In between these two events the country stagnated under lowering productivity, significant losses through strike action, periods of high inflation and interest rates, high tax rates and unemployment. It was at this period that UK water quality was at its lowest, its rivers and coastal areas polluted by uncontrolled sewage and industrial effluent.
As Margaret Thatcher’s administrations fought a vicious and ultimately victorious civil war with the Trades Unions, she encouraged the Common Market and the EEC to expand into the Single Market and the EU respectively. This gave British industry and services an ideal platform to grow and as Germany took an economic hit from the costs of re-unification, the UK passed the baton on to Germany, at last.
London became the clear financial capital of Europe. Japanese car and electronics companies invested heavily in the United Kingdom, as a stepping stone into the Single Market.
The Conservatives under John Major encouraged EU expansion eastwards into the former Communist satelite states of the Soviet Union, generating a greater market within which the UK could trade easily.
Under the Prime Ministerships of John Major and Tony Blair, the UK economy grew apace, making itself rich on the opportunities of the Single Market. During Gordon Brown’s short sojourn in Downing Street, the entire global economy suffered a meltdown as a consequence of the misselling or mortgages and bad debt in the US. The UK’s position as the economy containing the major financial centre of Europe made it singularly susceptible to effects of the crisis and it suffered accordingly. But it bounced back equally quickly and under the coalition Government of David Cameron was once again able to turn growth that outstripped its European partners. This was in part due to the dire state that the Greek Government had allowed its finances to reach, and it was bailed out by the other Eurozone members, in turn hindering their economies.
But the UK economy had a point of weakness. It lay in a small group of discontented right wing politicians in the Conservative Party. The Conservative Party regularly formed Governments, and each Conservative Prime Minister without fail came a cropper at the hands of the Party’s Eurosceptic members. Eventually David Cameron decided to “lance the boil” once and forever by promising an in/out referendum in his election manifesto of 2015. Far from lancing the boil, he simply spread the infection far and wide.
Whilst most of the electorate probably gave the European Union little thought, a pernicious campaign highlighting all the perceived ills in Britain and laying the blame at the door of the EU encouraged a massive protest vote. Cameron in his arrogance had assumed that he would either not have needed to carry out his manifesto pledge, or if he did, he would win comfortably and made no plans for what the nation would do in event that the unspeakable happened.
The unspeakable duly happened and the Leave Vote won a small majority. A Civil War in the Conservative Party and a series of thoughtless or self serving Tory politicians has taken the UK out of the most successful economic international partnership of all time, that has maintained peace and prosperity for nearly a century on a continent that previously tore itself apart with major internecine wars every twenty years.
Every rational explanation as to the consequences of leaving the EU were met with howls of derision from those Leave supporting politicians. “Project Fear” was simply a way of describing anything which didn’t coincide with the imaginative view of an all powerful UK out of the EU.
But the truth is somewhat different.
Using data collected by the International Monetary Fund, it is clear that since that fateful vote on 23rd June 2016, the United Kingdom has not become just a metaphorical laughing stock in international circles, but significantly poorer too.
The politicians who claim all the adverse predictions were simply “Project Fear” and have not come to fruition as predicted are simply wrong.
The IMF data shows that of the 39 most advanced economies in the world, in the period from 2015, immediately prior to the referendum and to date, only two economies have failed to grow. One of those economies is Puerto Rico, a small island in the Caribbean that in the middle of the period under consideration suffered from the worst hurricane in recent times.
However Puerto Rico’s, despite the consequences of Hurricane Irma out performed the economy of the UK.
The 37 other most advanced nations had economies that grew at an average rate of 15%. Over the same period Puerto Rican GDP fell by 3.3% and UK GDP by 5.3%.
In the period from the mid 1980s to 2015, the UK generally had higher growth than the rest of the EU. It took a much greater hit from the effects of the global crisis of 2008 to 2010, but recovered much more quickly than the other EU states.
The damage that Brexit has done to the UK economy can be seen in the following tables. These show the UK GDP growth as a comparison to the other EU nations and the G7 nations. Each of which had a significant growth, with only the UK suffering a decrease.
The UK economy has been substantially outperformed by every major group that you can imagine, the major economies, the EU, the G7 economies, the Eurozone and the non-Eurozone economies. The loss to our economy has been about 20% and we haven’t even started to see the effects of leaving the Customs Union and Single Market which will not happen until the start of next year.
Did those voting Leave really vote to be 20% poorer?
The Mumbler doubts it.
A mumbler's musings 