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Brexit, NEWSLETTER

BREXIT, UK INCOME INEQUALITY (NOT EUROPE) THE REAL ISSUE

Click here to download your FREE COPY of the July 2016 issue of the ABC Economics Magazine “The Brexit Delusion”

Stefano Francesco Fugazzi reports.

The unthinkable has happened. Britain has voted to leave the European Union (EU), triggering both local and global astonishment.

But who’s to blame for Britain’s historic decision? Is it the EU responsible for failing to tackle immigration or is David Cameron to be held responsible for staging a referendum in the first place?

This column argues that the outcome of the referendum on the United Kingdom’s EU membership uncovers a gloomy picture of a country divided and getting increasingly frustrated with its government’s social and economic policies.

The truth is that, for some absurd reason, no one is willing to admit that the EU has been used as an excuse to mask more serious problems inherent in British politics and society.

If you look at the referendum results, you will notice that most London boroughs – and Scotland – voted to remain in the EU whilst rural areas backed the Leave camp.

Both Eurosceptic and pro-EU enthusiasts recognise the fact that Europe needs sustained reforms. However, should the issues have been with and within the EU, then we would have seen both the Capital and rural areas recording similar voting patterns.

By contrast, the referendum results show a disproportionate discrepancy between London and the rest of the country, as if the Brexit backers could not wait to take revenge on the financial élite of the City and the government for failing to distribute wealth equally across the United Kingdom.

According to the Organisation for Economic Co-operation and Development (OECD), in the United Kingdom the average income of the richest 10% is almost 10 times as large as for the poorest 10%. The OECD average is 9.5, in France and Germany it is around 7 and in the United States 16.

Between 2005 and 2011 the average income of the poorest 10% in the United Kingdom fell 2% in real terms. While the average household income in the UK is slightly lower than in Germany and France, the average income of the bottom 10% in the UK is much lower.

Income is also spread unequally across the UK’s regions and nations. The average household income in London is considerably higher than in the North East.

The EU cannot be held responsible for increasing income inequality in the UK.

The onus will now be on the Leave camp to demonstrate that they have what it takes to reunite a divided nation.

They will also face the difficult task of making a U-turn on the social and economic policies pursued over the past two decades by New Labour and the Conservative Party under leaders Tony Blair and David Cameron, respectively.

But establishing a fairer economy is going to be a tall order in the aftermath of a Brexit, as future governments will no longer qualify for EU regional funding programmes.

 

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acquista ABC ITALIA, edizione 2016

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