British life-style: Leaving parts of the UK worse off than the poorest parts of nations including Slovenia and Lithuania

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Parts of the UK are now worse off than the poorest regions of Slovenia and Lithuania, stresses ‘The Telegraph’.

Britain is no longer a rich country after 15 years of stagnation “caused UK living standards to plummet”, according to economists, leaving parts of the UK worse off than the poorest parts of nations including Slovenia and Lithuania.

Economic growth and productivity have lagged behind a host of other nations since the financial crisis, the National Institute of Economic and Social Research (NIESR) said, as it called on the Government to raise the threshold at which workers start to pay income tax in an attempt to boost performance.

The typical British worker would be £4,000 per year better off if productivity growth and wages in the UK had matched those of the US, said Max Mosley, economist at the Institute.

“Economic stagnation over the past decade is now threatening the UK’s position as a place for a high standard of living. A combination of weak productivity growth driving near zero growth in real wages and cuts to welfare has resulted in a situation where we are neither delivering prosperity through high wages nor security through welfare,” he said.

“That the poorest in our country now fare worse than those in nations once considered less affluent is a stark indictment of the UK’s economic social model.”

Mr Mosley asked whether Britain is still a rich country, declaring that “this question – which was easy to answer for centuries – is now less straightforward”.

Parts of Birmingham and the North East of England are worse off than even the poorest parts of Slovenia and Lithuania, Niesr found, as nations that once made up the Eastern Bloc become increasingly prosperous.

The average Slovenian’s living standards are now almost on a par with the typical Briton’s, the think tank said, in a stark indication of the UK’s relative economic decline.

Britons’ average real earnings have risen by less than 3pc since 2019 after taking inflation into account. They are up just 6.6pc since 2007 at the start of the financial crisis, NIESR found. By contrast, real earnings rose by almost 20pc between 2000 and 2007.

Adrian Pabst, deputy director at Niesr, said the situation is even worse for those in the least affluent areas, with a “dramatic collapse in the living standards of the poorest 40pc in society”.

All of this comes when the public finances are under pressure from higher borrowing costs and weak economic growth as well as demands for more defence spending, all of which may force the Chancellor to make cuts to other parts of the public sector in her Spring Statement later this month.

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