Heart of the “industrial revolution” and, therefore, the real engine of the modern economy, Great Britain laid the foundations for its decisive affirmation already at the end of the eighteenth century, being able to consider, in the middle of the following century, as the “workshop” of the world. The presence of very conspicuous mineral resources (especially coal) and a dynamic entrepreneurial class, enriched by the capital accumulated over the centuries by a skilful mercantile policy, were the extraordinary starting point for an economic expansion which, also making use of a wise organization of work and technology for the time of absolute avant-garde, perhaps reached unrepeatable heights of prosperity. Nor should we forget the very important role played by the immense colonial empire, created by Great Britain relatively quickly thanks to its navy, its armies and its currency; it constituted an enormous reservoir for the British economy from which to draw raw materials at very low costs and into which to pour all sorts of industrial products, in a regime, therefore, of almost absolute lack of competition. The great advantages offered by imperial politics (even after the empire dissolved, Britain strove to maintain close trade ties with most of the countries already under its rule) made it less evident that in reality, with the emergence of the United States as the highest expression of the capitalist economy, Britain had lost many of its primates since the years following the First World War. It remained, however, a powerful inheritance to be used conveniently (infrastructures in general, mines, ports, railways, production facilities, a dense urbanized fabric and highly strengthened by industrial installations, etc.), but which had the disadvantage of being directly connected to the presence of coalfields, which both the entire economic geography of the country and the prevailing industrial typology were linked.

According to themotorcyclers, the progressive decline of coal as a driving force of the productive sectors, which occurred since the 1930s, generally represented a factor of serious crisis for the most ancient industrialized regions, especially the central-northern ones, which had based their economy on heavy industries, such as shipbuilding and mining; on the other hand there was a growing development of South-east England, which could enjoy the advantages of a vast consumer market such as London as well as geographical proximity to the heart of Europe. These contrasts gradually worsened, so much so that, due to the increase in the phenomenon of unemployment in depressed areas and at the same time due to the non-competitiveness of many industries, Great Britain found itself having to face, starting from the second post-war period, the problem of radical reconversion of its production facilities. This meant first and foremost the implementation of a radically new regional policy aimed at curbing further congestion in the more prosperous areas, especially London, and encouraging the localization of modern industries in stagnant economic regions through financing and tax relief. to create new cities to revitalize depressed areas, to create a network of communication routes adapted to the changed geo-economic reality, etc. The serious crisis of the seventies of the twentieth century arose mainly from this unfinished restructuring, from the difficulties, however global, in which the iron and steel industry, the metallurgy of aluminum, traditional mechanical production, textile production etc., from a certain inability of the country. to keep up with the times despite the creation of development areas (Enterprises Zones), by the insufficient renewal of the production systems. The employment consequences of the deterioration of the economy of areas with marked productive specialization in these sectors (for example the Midlands and Merseyside) were also responsible for worrying phenomena of social disintegration and urban decay. To cope with these complex problems, the weight of the public sector in the economy had grown enormously, especially through the consolidation of the welfare state., which, despite knowing one of its earliest and most accomplished achievements in Great Britain, ended up resulting in poor efficiency of the overall system. At the end of the seventies, the coming to power of the conservatives started the so-called “Thatcherian revolution”, which, pursuing rigorous neoliberal objectives, brought about drastic cuts in public spending and, in particular, reduced the weight of the state industry, with interventions in every sector, from steel and oil to automotive, as well as in transport and telecommunications. After all, industry was the “great sick man” of the British economy, still excessively linked to the coal sector, whose restructuring led to moments of dramatic social conflict, and now devoid of competitiveness due to global aging both technological and localization; yet, under the pressure of the world energy crises, there had been the discovery and enhancement of huge oil resources offshore, which placed Great Britain in conditions of substantial self-sufficiency. In the second half of the Eighties, despite the radical restructuring carried out and the incentives for foreign capital investments (with a significant entry of Japanese capital), the difficulties of the manufacturing sectors and deindustrialisation continued: also to counter this trend, in 1984 there were Six free zones have been identified in as many ports and airports, where goods from outside the European Community can be processed while enjoying customs extraterritoriality.

The recovery was therefore supported by the growth of the service sector and above all of its higher-ranking activities, which benefited from deregulation financial and restructuring of the London stock exchange (Big Bang of 1986). Inflation, which had reached peaks of 24% (1975), precisely as a consequence of the imbalances generated by social policy, was already back to 5% in the 1980s, and then continued its decline to 1.6% (1999); and unemployment, which had exceeded 3 million units (equal to over 13% of the total workforce) at the beginning of 1983, also decreased somewhat, although it remained at around 6% in 1999. These latest figures still put strong contrasts are in evidence: having emerged from an economic crisis (1990-92) which had seen the gross domestic product decrease by 1.3% per year, Great Britain gained a competitive advantage from the devaluation of the pound, which relaunched exports, making rebound the GDP growth rate; but neither internal consumption nor trend positive, also because the greater flexibility on the labor market resulted, for the most part, in part-time or temporary employment. When, in 1997, Labor returned to the government, they found a profoundly restructured economy, also under the pressure of European integration: basic agricultural production, such as that of wheat, even doubled; strong increase in oil extraction, to sanction the definitive demise of coal; significant recovery of the automotive industry, even if it passed under the control of foreign capital; great development of high-tech manufacturing branches (electronics); advanced privatization of services (energy distribution, telecommunications, transport).

Regional gaps remain significant: the areas (London metropolis and South-East) which in the Eighties recorded broadly positive production, employment and income differentials, compared to the average for the entire country, keep this advantageous situation almost unchanged, if anything extended by decentralization processes towards East Anglia and the East Midlands; On the other hand, Northern England, Wales and Scotland, as well as Northern Ireland, remain lagging behind. However, it is precisely towards these weaker areas that foreign investments have mainly been directed, while local development policies have aimed at encouraging endogenous entrepreneurship in new productive sectors, both of consumer goods and high tech, abandoning the strategies of support to pre-existing industries: thus, about twenty Enterprises Zones were closed (especially in central-northern England), where the offer of services to businesses by public bodies had not achieved the expected results, having failed to promote either the reconversion of traditional industries in crisis or the creation of an appreciable induced activity around the new locations. GDP growth resumed at a fast pace (US $ 2,674,085 million in 2008, corresponding to US $ 43,785 million per capita), causing interest rates to rise well above the European average and, with this, an appreciation of the pound which has once again slowed down exports. But, apart from the difficulties of export-oriented companies (the only negative factor together with the record deficit of the trade balance), Great Britain has experienced, since the mid-nineties, a continuous growth, in contrast with a very international economic situation. more critical. Signs of economic and financial stability are derived not only from GDP growth data, but also from the estimate of the cost of money, inflation rates (3.6% in 2008) and unemployment (5.4% in 2008), which remain at historic lows.

United Kingdom Economy Overview

United Kingdom Economy Overview
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