Written by Akshay Kotibhaskar as the winning entry to the D block Geography Prize

In  his book ‘Shattered Nation’, Danny Dorling presents a detailed picture of a nation incrisis. He claims that the United Kingdom has been so damaged by forty years of inequality in a variety of forms that it could soon evolve into a dystopia.[1] While Dorling’s narrative is rather extreme, inequality is in fact a multifaceted issue that has significant implications for the development of the United Kingdom. While the UK is considered one of the world’s major economies, with a high standard of living for many of its citizens, it also faces deeply entrenched inequalities  across a variety of factors, including income, wealth, education, and more, which have profound impacts on social, economic, and QOL (quality of life) developments.

One of the most prevalent forms of inequality in the UK is income and wealth disparity. The UK has one of the highest levels of income inequality in the developed world, with a significant proportion of national income concentrated among the wealthiest. Income inequality in the UK, as measured by the Gini coefficient, increased by 1.3 percentage points to 35.7% when comparing the financial year ending (FYE) of 2021 to those in 2022[2], which reveals the presence of a stark divide between the richest and poorest in the country in comparison to the rest of the world. This disparity is at its highest level for 30 years. Today, the richest 10 per cent of the population in the UK area earn 9.5 times the income of the poorest 10 per cent; in the 1980s this ratio stood at 7:1 and has been rising continuously ever since.[3] This inequality can firstly have severe detrimental effects on social cohesion, as it contributes to a sense of injustice and fosters division within society. This can result in an ineffective and inefficient workforce, as well as a country  that feels frustrated and repressed, a major barrier to development.

On the other hand, some argue that because inequality puts more resources into the hands of capitalists as opposed to workers, it promotes saving and catalyses growth. It could also be said that some degree of inequality can create the right incentives for investments and productive risk taking.

However, according to a study in an OECD published article, econometric analysis suggests that income inequality has a negative and statistically significant impact on subsequent growth.[4] In addition to this effect, data from the Adult Skills Survey identifies increased income disparities as a key factor that depresses skills development among individuals.[5] This inhibits a countries workforce, as skilled tertiary workers are extremely important to increasing GDP and expanding the economy.

For most of the 20th century, inequality in GDP per capita between UK regions – while not insignificant – was relatively low by European standards. However, by the 2010s the UK became one of the most regionally unequal of the world’s industrialised economies in terms of GDP per capita, productivity, and disposable income.[6] It just so happened that this shift directly correlated with the slowing down of the countries development, with rate of development in the form of GDP annual growth rate currently at an all-time low of 3.4%, a fall of 20.8% form 1975’s 24.2%, a point after which the UK’s rate of growth has more or less been steadily decreasing.[7]This is coupled with the large and ever-growing national productivity problem; with a fall in productivity growth post-2007 larger than any other G7 country except Italy.[8]

Furthermore, with an increase from 17.2% of the population earning less than or equal to the absolute low income in 2021/22, to 18.3% in 2023/24, an additional 800,000 people lose their ability to invest in education and skills development.[9]As a result, the workforce may not be as productive, innovative, or adaptable as it could be. This, in turn, can constrain the country’s ability to compete globally, adapt to increasingly rapid technological changes, and foster entrepreneurship, all of which prevent the UK from developing in the future.

Another impact of such economic inequality in the UK is that it can exacerbate poverty, with the aforementioned socioeconomic divides making it difficult for many individuals and families to access basic necessities such as housing, healthcare, and education, as well as essential standards of quality of life. This can lead to a cycle of intergenerational poverty; if children born to parents with lower income, education or other disadvantageous circumstances have fewer opportunities, poverty and inequality are likely to be perpetuated across generations, and economic progress is hampered because of wasted human potential, caused by limited opportunities and a lack of accessibility to higher paying jobs. This inevitably compromises growth in the UK, acting as a barrier to overall development. Moreover, it can undermine social stability and trust in the government, as people may perceive the system as favouring the rich at the expense of the rest of the population.

In addition, the social inequalities in the UK have disastrous consequences for not only economic development, but social and political advancements as well. One effect of social inequalities is the lack of social mobility, or the ability of individuals to move up the social and economic ladder, so to speak. This means that the circumstances of one’s birth, such as their family’s income and social class, have a strong influence on their life outcomes, which can create a rigid class system and limit the country’s potential. In a society with low social mobility, individuals from disadvantaged backgrounds may not have the opportunity to develop their skills and contribute fully to the economy, which tends to stifle innovation and entrepreneurialism, as people may be excluded from the opportunity to pursue their ambitions, thus inhibiting development of society and social environments, as well as economic success.

Furthermore, social inequalities can impact education as well, a vital aspect of any country’s success. Children from disadvantaged backgrounds often face multiple challenges, including limited access to high-quality schools, resources, and extracurricular activities. The proportion of students that progressed to a high degree of education was 68.3% in 2022.[10] Considering that a fundamental step to advancing a countries development is the progress towards a highly skilled and intelligent workforce, the longer this inequality remains, a barrier to development will continue to remain entrenched in the UK’s society.

An additional social inequality is the issue of healthcare. Disparities in medical access result in individuals in lower income brackets often experiencing worse health outcomes and shorter life expectancies. Firstly, a less healthy population can place a greater burden on the healthcare system and leads to higher healthcare costs which strain the public health systems and therefore make it challenging to provide adequate healthcare to all citizens. Secondly, health inequality also contributes to the lack of social cohesion. When a significant portion of the population has limited access to healthcare services, it fosters feelings of injustice and discontent, which leads to social unrest and, in extreme cases, political instability, which are inherently detrimental to the country’s development.

Lastly, inequality in the UK is not limited to income and social factors. There is also a significant geographic dimension to inequality. London and the Southeast often benefit from greater economic opportunities, higher wages, and better infrastructure, while regions in the North, Wales, and Scotland tend to lag behind.

This can be evinced by the fact that there are very substantial regional differences in economic performance in the UK. At the extremes, London’s output is 2.5 times that of the Northeast of England, and at extremities it reaches up to 50%. To illustrate the extent of these differences, the output per capita of the Southeast during the first lockdown of the pandemic is similar to that of Wales in normal times – a 35% difference.[11] The ability of different parts of the country to create or attract high-value jobs and firms and drive productivity, varies dramatically between urban and rural areas. For example, urban areas such as cities in the Southeast are extremely well placed to attract qualified workers through London’s role as a hub of finance and trade.

Put simply, with the current regional inequalities, expecting the predominantly rural regions to perform in the same way as the Greater London urban area does is utterly unrealistic.

Infrastructure also has an important role to play; the UK’s non-London cities have more congested roads and smaller road networks and are less accessible by public transport. High levels of road and rail congestion at peak commuting times in several non-London cities suggest that there is a major requirement for more and better transportation infrastructure to access city centres.[12] This lack of transportation infrastructure reduces firms’ access to larger labour markets, as well as workers’ access to high productivity jobs. The UK’s large non-London cities’ effective size is therefore substantially limited by their poor transport infrastructure, thereby helping to sustain the mass differences in regional productivity.

It is evident that this geographic inequality can hinder the balanced development of the country. It can lead to a concentration of economic activity in certain areas, creating overcrowding, rising property prices, and overburdened infrastructure. Meanwhile, other regions may struggle with unemployment, underinvestment, and a declining population. If productivity can be optimised across the UK, this creates possibilities for gains in both equity and efficiency; in fact, if the country’s underperforming cities closed their output gap, the UK’s economy would be approximately £69.9 billion larger.[13] Therefore, the regional disparity in the UK is likely one of the biggest barriers to the UK’s development in all aspects.

It is clear that inequality poses significant barriers to the UK’s future development. I have discussed income, education, health, and regional disparities – all of which have serious effects on a country’s economic growth, social cohesion, and long-term stability: crucial barriers to development in the UK. In my opinion, the existence of these inequalities is without a doubt a major contributing factor to perpetuating a lack of development, and there are no substantial contradictory arguments which hold up against the overwhelming weight of the evidence supporting this claim. As Danny Dorling believes; the UK will indeed become a “shattered nation” if these inequalities are not resolved as soon as possible.

 

Bibliography

 

Centre For Cities, 2021. Levelling up the UK’s regional economies. [Online]
Available at: https://www.centreforcities.org/reader/levelling-up-the-uks-regional-economies/introduction/
[Accessed 7 November 2023].

Harvard Kennedy School, 2023. Tackling the UK’s regional economic inequality: Binding constraints and avenues for policy intervention. [Online]
Available at: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/files/198_AWP_final.pdf
[Accessed 10 November 2023].

House of Commons Library, UK Parliament, 2023. Poverty in the UK: statistics. [Online]
Available at: https://commonslibrary.parliament.uk/research-briefings/sn07096/#:~:text=The%20Resolution%20Foundation%2C%20an%20independent,people%20in%20absolute%20low%20income.
[Accessed 9 November 2023].

OECD Data, 2023. Gross domestic product (GDP). [Online]
Available at: https://data.oecd.org/gdp/gross-domestic-product-gdp.htm
[Accessed 8 November 2023].

OECD, 2014. Trends in Income Inequality and its Impact on Economic Growth. [Online]
Available at: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.oecd.org/els/soc/trends-in-income-inequality-and-its-impact-on-economic-growth-SEM-WP163.pdf
[Accessed 9 November 2023].

Office for National Statistics, 2022. Household income inequality, UK: financial year ending 2022. [Online]
Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householdincomeinequalityfinancial/financialyearending2022#:~:text=3.-,Analysis%20of%20income%20inequality,as%20seen%20in%20Figure%201).
[Accessed 10 November 2023].

Patriquin, L., 2023. Shattered Nation: Inequality and the Geography of A Failing State. [Online]
Available at: https://blogs.lse.ac.uk/lsereviewofbooks/2023/09/07/book-review-shattered-nation-inequality-and-the-geography-of-a-failing-state-review-danny-dorling/
[Accessed 9 November 2023].

UK GOVT, 2022. Progression to higher education or training. [Online]
Available at: https://explore-education-statistics.service.gov.uk/find-statistics/progression-to-higher-education-or-training
[Accessed 10 November 2023].

World Bank, 2012. Inequality: A Threat to Economic and Social Development?. [Online]
Available at: https://www.worldbank.org/en/news/speech/2012/04/19/inequality-a-threat-to-economic-and-social-development
[Accessed 7 November 2023].

 

 

 

 

---

[1] (Patriquin, 2023)

[2] (Office for National Statistics, 2022)

[3] (OECD, 2014)

 

[4] (OECD, 2014)

[5] (OECD, 2014)

[6] (Harvard Kennedy School, 2023)

[7] (OECD Data, 2023)

[8] (Harvard Kennedy School, 2023)

[9] (House of Commons Library, UK Parliament, 2023)

 

[10] (UK GOVT, 2022)

 

[11] (Centre For Cities, 2021)

[12] (Harvard Kennedy School, 2023)

[13] (Centre For Cities, 2021)