Income inequality is only one of the several problems that the UK plans to be alleviated from.
European policy-makers are greatly concerned with the widening gap between the poorest and richest regions in Europe since the 2008 economic crisis. The income disparity between citizens in richest and poorest regions has broadened in half of the 34 OECD states since 2008. Among the G7 group of thriving economies, UK is the only country suffering from inequality. The UK’s London-centric nature is overwhelmingly uneven. In the Northern Europe, London is the richest region. However, nine out of ten poorest regions reside in the UK. Further, the number of people threatened by exclusion and/or poverty is more pronounced in UK than in any other European country, saving for Spain, Greece, and Italy.
Predictions by the IMF project that the UK economy is growing faster than any developed country, absolutely surpassing its pre-recession peak. However, the question remains as to who are the beneficiaries of such economic recovery. Is it the London dwellers and the super-rich individuals harnessing the profits, or is it every person across the UK regions? Wealth distribution within and between the UK regions set a stage for economic inequality. However, such inequality is much less significant than inequality looked at from UK as a whole. In short, the disparity between the rich and the poor between and within regions is less than the gap between the poor and the rich looked at from whole-UK’s perspective. This calls for inequality reduction policy-making mechanism focussed at UK as a whole. It is noteworthy that UK does not suffer from income inequality alone. Inequality that is separating the UK’s rich and poor is evident in education, employment opportunities, and healthcare services.
The efforts towards developing mechanisms for reducing inequalities are being published now and again. The Department for Business, Energy and Industrial Strategy (BEIS) issued a paper on the formulation of the Industrial Strategy, and the Centre for Macroeconomics (CFM) and CEPR survey points out that a large majority of experts are in favour for a new regional strategy to tackle the regional inequality in the UK. However, speculations exist for poor policy implementation.
The UK’s Industrial Strategy was designed to stimulate economic growth. Particularly, the strategic plans outlined in the Industrial Strategy have boosted start-up businesses and support the growth of new firms in the industry. The proposals build in the Strategy have stimulated economic growth across the UK by encouraging inward investment and trade, upgrade of the public infrastructure, and provision of affordable and clean energy to the UK citizens in all regions. In light of the Industrial Strategy, the Director General of the Confederation of British Industry (CBI), Carolyn Fairbairn posed that “A modern Industrial Strategy will be a landmark opportunity to build a successful, modern economy as the foundation for a prosperous, fairer and more inclusive society”.
The economic crisis has been the prime suspect of disparity across the UK regions. People’s well-being is influenced by factors emanating from local issues such as pollution, access to healthcare services, security, and distribution of employment opportunities. Therefore, mitigation policies responding to such uneven distribution of resources should be locally targeted. Also, the policies should consider regional needs and problems to be better positioned at improving the people’s well-being for the country as a whole. This could involve resolving the issues directly from the source of inequalities. For effective policy formulation and implementation, the government require appropriate tools and strategies to sufficiently understand the expectations of its citizens and local conditions at regional level.