John Gillam

I think that there is an even more fundamental reason: the entire economy is set up to benefit the service industry that concentrates around the south east, with the City of London at its epicentre. Monetary policy, for instance, is not set to make exports competitive, but to keep the pound stable enough to attract financial flows into the city and keep bond holders reasonably happy -- or, thinking of it the other war around, the government has happily infected the country with Dutch Disease by inviting City-based capital flows. Meanwhile, trade policy, employment policy, and even immigration was set up to benefit the services sector and consumers rather than manufacturers and workers. If anybody reads the work of the economists who advocated for opening trade up -- like Benny Kleinman and Paul Krugman -- they all argued at the time that while it would create aggregate gains, it would also create winners and losers. Unless there was serious redistribution from the former to the latter to allow the latter to find a productive place in the new world, you would get a great wealth pump from bottom to top that would create an hourglass economy, they argued. Well, guess what? There was no serious redistribution. The former industrial regions were sacrificed on the alter of efficient markets and marginal gains in GDP. But what did that do? Oh, it created a country in which there were gargantuan amounts of redistribution, and of the very worst kind. Congratulations, neoliberals.