UKGDPpercapita UK Gross Domestic Product(GDP) per capita (per person)

I am writing this blog because I think it is relevant to the Brexit debate, the immigration debate and wider issues in UK politics - how we see ourselves as a nation - and what decisions we need to make for a better future.

I am writing this blog in the belief that the relevance and significance of  "GDP per capita" is not widely understood or appreciated by many - and it would be better if it was!

I shall try and explain for the common good - ha!

It is regularly stated (banded about) that "the UK is a wealthy country - the 5th or 6th wealthiest country in the world". (Politically this is used to criticize lack of government (public) spending in social areas.}

We need to establish some basic concepts now in order to evaluate the correctness - the validity of the above statement. It is important to do so because it so profoundly affects how we see ourselves as a nation, the decisions we make for the future and our political cohesion.

Question 1. How do we measure the economic wealth of a nation. Answer - perhaps the main way - we calculate the GROSS DOMESTIC PRODUCT (GDP) of the nation (usually over a given year) and compare against other nations. 

QUESTION 2. How is GROSS DOMESTIC PRODUCT calculated - what is it? Answer -  

Gross domestic product is the total value of everything produced in the country. It doesn't matter if it's produced by our citizens or foreigners. If they are located within the country's boundaries, their production is included in GDP.

GDP is the total value of the goods and services produced by all sectors of the economy; agriculture, manufacturing, energy, construction, the service sector and government. 

To avoid double-counting, it measures the final value of the product, but not the parts that go into it. For example, it measures the value a new car engine only after it's assembled in the vehicle.

QUESTION 3. Is it correct to state the UK is the 5th or 6th wealthiest country in the world? Answer - yes if you use GDP as the measure and compare.

BUT BEWARE - this is misleading! 

Why is it misleading? - ANSWER - it is misleading because it does not take into account how many PEOPLE (average population in the period) it takes to make (create) the GDP figure.

If GDP is the total size of the cake how many people has it taken to make the cake? Put another way how many mouths does the cake have to feed? This is GDP per capita (per person).

QUESTION 4. Using GDP per capita - per person - is the UK one of the wealthiest countries in the world? The answer is NO - nothing like it. On most comparisons we are currently 22 in the world rankings.

Now we have our heads around the more meaningful (practically relevant GDP per capita) we can ask 2 questions?

Question 1 - why is our per capita - per person output relatively poor and Question 2 - how do we increase it?

Here are a list of factors that help determine GDP per capita :-

• Long term planning-a country has to set long term achievable goals to adhere to including blueprints that contain guidelines and expectations.
• Size of population.
• Industrialization.
• Infrastructure-a country that wishes to grow must enhance connectivity for its citizens. This entails upgrading airports, sea ports, railroads, highways, urban areas, electricity, pipelines and drainage systems.
• Education-training of citizens is crucial to an ambitious nations. It is important to endow the working population with quality technical skills most by use of trade schools. Basic education should a right for the younger generation. For higher education, it is best to balance university to trade school population ratio.

If we look at the list it becomes obvious where we have gone wrong - why we are not as wealthy as we think we are.

1. Our long term planning has been poor. One of the reasons - uncontrolled immigration. We have a massive population - heading to be the largest in Europe. In the last 10 years 3 million migrants (at least) have come to this country and none of this was strategically planned. We have coped badly with the numbers.
2. Size of population. True - most of the migrants work - so they increase our GDP. True - migrants help individual business profits because invariably their wages are low and they have as a result kept wages across the piste low.True - business profits have increased because we have imported trained labour rather than UK business (and government) incurring the cost of training and apprenticeships for our own. True - business - the CBI - manufacturers - agriculture - the NHS - the care sector - say we rely on migrants - we need more and more to sustain our businesses - to grow our GDP. But more people does not necessarily make our country wealthier - our citizens better off. GDP grows but millions more people have to share it!
3. Industrialisation - we are an industrialised nation. However many argue and I agree - the abundance of cheap labour has reduced our companies and businesses motivation to increase productivity by working smarter, introducing more advanced technologies and innovating. The UK has been poor in keeping pace with modern technological investment. They have not needed to - because exploiting cheap labour (subsidised by the tax payer) is the easier option to profit. No surprise they want to maintain high levels of migrant flow after Brexit. 
4. Infrastructure. Geographically we are a small country. With our massive and rapidly growing population we are overcrowded. Our urban areas are often gridlocked. Our trains are full. Motorways are rammed. None of this is efficient. Everything is working at over capacity. Our infrastructure and public services cannot cope. So much cost and time is wasted trying to move goods and people around. Relying on an ever increasing population is madness. It is badly damaging our per capita GDP. 
5. Education and training. We have not done enough with our own citizens. It is shortsighted. They have to be subsidised through benefits because they are effectively unemployable - and the double whammy - we import even more people to do what our own should be doing.

So with regard Brexit - the free movement of people - and the need for a migrant workforce etc it is obvious we need a major rethink. We are nowhere near as wealthy as a nation as we think we are. Our priority should be to up productivity per person - not kid ourselves we are wealthy because we have a big cake.

One big factor is the effect of uncontrolled inward migration. We are full. We are inefficient as a result. Our companies and businesses have to be weaned off cheap migrant flows and innovate - and train and educate our own. We need a strategic plan to do so. Brexit should be that. We have the opportunity and the people have seen it - even if some politicians can't and businesses wilfully refuse to do so (unless they are forced). 

This is one of the main reasons I am a staunch advocate of Brexit. We will be wealthier in GDP per capita (real terms)  if we stand on our own two feet and no longer take the lazy migrant option. Our quality of life will be better too because we are full - we are bursting at the seams. We do not need more people - we need to get smarter - we need to think longer term. And I have not even mentioned social cohesion and the British values and way of life!