England cricketer Stuart Broad was lambasted last year when he tweeted: “I’ve heard if you earn minimum wage in England you’re in the top 10 per cent earners in the world.”
What was no doubt intended to be an innocuous observation prompted a wave of outrage on social media from people furious that a wealthy sporting star would tell low-paid staff to “stay humble”.
Broad’s judgement, and rhetoric, were significantly less accurate than his often-devastating fast-bowling. However, the thrust of his point was perfectly correct. Using so-called “purchasing power parity” calculations, which iron out exchange rates and the varying cost of goods and services, a minimum wage worker in the UK would comfortably fall within the top 10 per cent in global terms. Hundreds of millions of people throughout the world have escaped poverty in recent years, but a huge majority remain far behind western living standards.
Our fortune in the west may be indisputable, but is often little comfort to the many Brits who – by western European standards – are stuck in an economic rut. Stark figures were published this week from the Centre for European Reform. London and the south east are the only UK regions with a higher-than-average GDP per capita, compared to 15 major EU countries. All other parts of the UK (accounting for three quarters of the population) have GDP-per-head below 90 per cent of the EU-15 average.
Large sections of the country are suffering from stagnant local economies and extremely weak productivity. Star students may flee to university, and then on to the bright lights and higher wages of our more successful cities, but many are left behind. Theresa May presumably had this in mind when she spoke this month of people “feeling left behind” by the pace of globalisation.
At a time when rapid change is so evident, people expect to reap their share of any rewards. The best way to achieve this is through economic growth, and the best way to achieve that is through liberalisation and trade. To combat economic sclerosis, taxes must be cut and regulations slashed – perhaps through large enterprise zones, of the kind touted by May’s predecessor in Number 10. In areas of the country where stagnation is breeding discontent, the answer lies in more globalisation, not less.