The Sunday Times has an intriguing story today on a study which could add fire to the debate about the future of the UK:
PARTS of the UK are as dependent on the state as some Soviet bloc countries were at the time communism collapsed, a new analysis based on official figures shows.
It paints a picture of large areas of the country whose prosperity in recent years owes everything to Gordon Brown’s largesse with taxpayers’ money, and which will struggle when spending slows down to more normal levels.
The study was carried out by an outfit called the Centre for Economic and Business Research.
It shows that in the northeast of England, Wales, Scotland and Northern Ireland, government spending exceeds 50% of their gross domestic product (GDP). In the northeast and Wales it accounts for almost 60% of the economy. In Northern Ireland it accounts for more than two-thirds of its GDP at 67%. In London and the southeast, in contrast, government spending accounts for just one-third of the economy.
Interestingly, the ST article goes on to compare the South East to the Republic of Ireland.
The state’s share of the economy in London and the southeast, widely regarded as the most dynamic region of the country, is similar to that of America, Ireland and Australia — countries that have generally grown more quickly than Britain. By contrast, the state’s share in many other regions is higher than in slow-growing European Union economies.
I think the Soviet comparison is a significant, if exaggerated one, as the USSR subsidised Eastern Europe to buy off political dissent. Something similar is arguably happening in relation to Scotland and Northern Ireland.
They are in a highly vulnerable position, because while they may be benefitting from higher public spending now, they have no real means of ensuring that will continue.
They are essentially in a dependency situation, which is an all probability where the Republic would still be if it hadn’t broken away and become an independent democracy.