Saturday 13 October 2012

On the North-South divide and the secession of South Britain

There is a North-South divide in Britain, such that the southern half of the country on average is wealthier than the northern half. This was not always so. At the peak of the industrial revolution, the North more than matched the South for prosperity as can be seen by the fine, and expensive architecture everywhere in the north of Britain. But as heavy industry went into decline, so much of that prosperity was lost, so that now there is a definite dividing line between North and South Britain. Quite where to draw the boundary is not absolutely clear, but if a line were drawn from the Bristol channel to the Wash, that would be a fair approximation of where to place the divide. What would be the consequences if South Britain decided to turn this imaginary divide into a real one? What if South Britain were to vote for independence, choosing to secede from North Britain?

The South Britons are on average wealthier than the North Britons. They commonly vote Conservative and they pay more in taxation while receiving less in public spending. What if they were to reason in this way? We continually vote Conservative, but frequently contrary to our wishes have to endure the oppression of a Labour government, which we did not vote for. Such a government steals our wealth through ever higher taxes and gives it to the North Britons. It redistributes our money by subsidising the Labour voters of North Briton. We’d be much more prosperous if we had our own country called South Britain. Why should we help the post-industrial cities of northern England, Scotland, Wales and Northern Ireland? Let them help themselves. 

What would be the result of such a South Britain independence movement? Looked at by itself Scotland would come out fairly well. Scotland receives in public spending only a little more than it raises in taxation. The result for the rest of North Britain however, would be very poor. At present Northern Ireland gives out about £4000 in public spending per person, per year more than it raises in taxation, while Wales gives out about £3000 more than it raises. The north of England fares somewhat better. Although each region of England above the boundary line is in deficit with regard to the per capita gap between public spending and taxation, this deficit is small in the Midlands. However, the gap between public spending and taxation in the north of England progressively becomes greater as we move northward until it reaches around £3000 in the North-East.

What would be the economic result for these deficit regions if South Britain chose to secede? The result would be a large gap between public spending and revenue. The government for these regions would face a choice. They could either cut public spending drastically, raise taxes drastically or attempt to issue debt. With the sort of deficits faced by these regions it is unlikely that the bond markets would look favourably on their attempts to issue debt. Raising taxes still higher than they are at present would likewise be problematic, as this would certainly damage the growth prospects of these regions, especially if there was a taxation differential between North and South Britain. The only option would be to cut public spending so that it closely matched revenue raised. For Northern Ireland, Wales and the far north of England, the required austerity would mean cuts of between £3000 and £4000 pounds per person, per year, which would severely affect living standards in those regions. The relatively wealthy parts of North Britain could of course subsidise to some extent the poorer parts, but given that all regions of North Britain are in deficit, there would be a limit to how much they could do so without damaging the living standards in their own region. 

On the other hand, the economic result for South Britain would be much more favourable. They would be able to retain much of the income, which they at present share with the North. Much of South Britain would receive an immediate £2000 pound credit per person. The average gap in living standards between someone from Southampton and someone from either Cardiff, Belfast or Newcastle would therefore immediately see an increase of between £5000 and £6000. Politically South Britain would be much more likely to have the sort of government, which it voted for. It would be able to introduce the business oriented policies, which South Britain wanted. It would be much easier for such a government to achieve further economic success, as it would inherit a country, which already had lower unemployment, lower public spending and a smaller public sector. A Conservative government in South Britain could establish a free market economy. Unhindered by the Labour party anchor, this economy would become more like Switzerland or the USA. With policies of low taxation, low public spending, inevitably the economic growth and prosperity of South Britain would increase as that of North Britain declined still further. 

Why shouldn’t South Britain secede from the rest of the UK? Wouldn’t North Britain be happier being able to continually elect the left wing type of government it favours? Wouldn’t secession end the inequality of the North-South divide?

But can we not appeal to the conscience of South Britain? If leaving the UK would impoverish great chunks of North Britain, if it would furthermore make the constitutional future of Northern Ireland uncertain, are these not reasons enough why South Britain should stay? Of course South Britain could say we don’t care what happens to North Britain, let them live in poverty, so long as we have more. But if they did say this, would the North Britons not have the right to say you’re being selfish, you’re acting like the stereotypical view of a bunch of selfish, wicked Tories? Just so that you always get what you want, always get the government that reflect your wishes, you’re willing to cast North Britain adrift, you’re willing to forget that we have stood together through thick and thin just so that you can be a bit richer. Could we in North Britain not appeal to the conscience of the South Britons in this way? Could we not point out that we need them and hope that they would have the fellow feeling to reciprocate this sense of need? After all, there are family bonds between us that are far more important than what party rules us or how much money we have in our wallets. When secession equals selfishness good people should have no part of it.