Most of Britain is poorer than the European average, and other things we learned from this map

Mmmmm. Statistic-y. Image: Eurostat.

So there’s a map of Europe doing the rounds on the Twitters this morning, one which never ceases to fascinate me. There’s an extract of it above; the whole thing is shown below. It's from Eurostat, the European statistical agency, and it shows, basically, which bits of Europe are the richest.

The map breaks most of the continent into regions known as “NUTS 2 statistical units” (or, “Nomenclature of Territorial Units for Statistics 2 statistical units” for long), and colour codes them by a measure of economic activity, using data for 2014. In this case it’s GDP per capita (how much wealth is produced), expressed in purchasing power standards, or PPS (basically, how much that wealth will buy you in that bit of the world).

All of which is a long way of saying that the blue-ish bits of the map are generating enough money to be richer than the EU-28 average, while the red-ish bits of the map are poorer than it.

Some caveats, before we look at the map. Firstly, in some ways, NUTS 2 regions are bloody stupid. London is split into five of the things, while the whole of the Republic of Ireland gets just two.

This isn’t as silly as it first sounds – the former has nearly twice the population of the latter – but it’s probably a bit misleading to imagine that the British capital can be broken down into five discrete economic units, or that the Republic of Ireland contains just two. So we should be wary about how literally we take this colour-scheme.

The other thing to remember is: GDP per capita doesn’t tell us everything. Transfer payments exist. Rich regions can and do support poorer ones – through the EU structural funds (we’re going to miss those), and through things like welfare systems within countries. What’s more, a region composed entirely of loaded retired people would, I suspect, look pretty bad on this map, while actually having fairly good living standards.

But that’s enough caveats spoiling our fun, what can we learn from the map?

Let’s start with the “well, duh” stuff. Firstly, there’s a definite east/west divide: the ex-communist countries of eastern Europe are by-and-large poorer than the capitalist ones of the west.

There’s possibly a north/south divide too, but this is less pronounced than you’d expect: parts of northern Spain and Italy are doing alright, while parts of the Nordic region, and – especially – large chunks of the British Isles, are not.

Some of this can be explained by the second predictable element: cities are, mostly, richer. In those southern countries, it’s the regions around Madrid, Barcelona and Rome that are doing best. In France it’s Paris, in Finland it’s Helsinki, in east Germany it’s Berlin. That blue island in the red sea of Romania is Bucharest.


So far, so predictable. But other things are more surprising.

For one thing, there’s a sort of arc of prosperity reading from Italy northwards. At first this looks like the blue banana megalopolis we’ve banged on about before – except it isn’t, because the reason it’s called a banana is it curves past the low countries into Britain. Which this doesn’t.

In fact, Britain doesn’t come out that well on this map. South central England, East Anglia, Cheshire and the north East of Scotland (Aberdeen, basically) are the only bits of the UK above the EU average. Even Essex and Kent – places not short of rich London commuters – come in more at than 10 per cent poorer.

The UK is not alone in division. Italy’s north-south divide is as well known as ours (only upside down), but we talk rather less about the fact France and Spain also have radically different economies depending on which bits of them you go to.

Oh, and it’s very sweet the way they’ve boxed out Liechtenstein just so they can tell us they don’t have any data.

As I said at the top, we should be wary of over-interpreting this, for all sorts of reasons. But is clear is that, for all the government’s talk of booming Britain and sclerotic Europe, the UK is substantially poorer than large chunks of the continent: western Germany, northern Italy, Scandinavia and the low countries.

But it’s fine because Brexit means Brexit and we’re apparently going to make a success of it.

So anyway, to sum up, I think you ought to know I’m feeling very depressed.

You can see the whole map, with commentary from Eurostat, here.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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“Without rent control we can’t hope to solve London’s housing crisis”

You BET! Oh GOD. Image: Getty.

Today, the mayor of London called for new powers to introduce rent controls in London. With ever increasing rents swallowing more of people’s income and driving poverty, the free market has clearly failed to provide affordable homes for Londoners. 

Created in 1988, the modern private rented sector was designed primarily to attract investment, with the balance of power weighted almost entirely in landlords’ favour. As social housing stock has been eroded, with more than 1 million fewer social rented homes today compared to 1980, and as the financialisation of homes has driven up house prices, more and more people are getting trapped private renting. In 1990 just 11 per cent of households in London rented privately, but by 2017 this figure had grown to 27 per cent; it is also home to an increasing number of families and older people. 

When I first moved to London, I spent years spending well over 50 per cent of my income on rent. Even without any dependent to support, after essentials my disposable income was vanishingly small. London has the highest rent to income ratio of any region, and the highest proportion of households spending over a third of their income on rent. High rents limit people’s lives, and in London this has become a major driver of poverty and inequality. In the three years leading up to 2015-16, 960,000 private renters were living in poverty, and over half of children growing up in private rented housing are living in poverty.

So carefully designed rent controls therefore have the potential to reduce poverty and may also contribute over time to the reduction of the housing benefit bill (although any housing bill reductions have to come after an expansion of the system, which has been subject to brutal cuts over the last decade). Rent controls may also support London’s employers, two-thirds of whom are struggling to recruit entry-level staff because of the shortage of affordable homes. 

It’s obvious that London rents are far too high, and now an increasing number of voices are calling for rent controls as part of the solution: 68 per cent of Londoners are in favour, and a growing renters’ movement has emerged. Groups like the London Renters Union have already secured a massive victory in the outlawing of section 21 ‘no fault’ evictions. But without rent control, landlords can still unfairly get rid of tenants by jacking up rents.


At the New Economics Foundation we’ve been working with the Mayor of London and the Greater London Authority to research what kind of rent control would work in London. Rent controls are often polarising in the UK but are commonplace elsewhere. New York controls rents on many properties, and Berlin has just introduced a five year “rental lid”, with the mayor citing a desire to not become “like London” as a motivation for the policy. 

A rent control that helps to solve London’s housing crisis would need to meet several criteria. Since rents have risen three times faster than average wages since 2010, rent control should initially brings rents down. Our research found that a 1 per cent reduction in rents for four years could lead to 20 per cent cheaper rents compared to where they would be otherwise. London also needs a rent control both within and between tenancies because otherwise landlords can just reset rents when tenancies end.

Without rent control we can’t hope to solve London’s housing crisis – but it’s not without risk. Decreases in landlord profits could encourage current landlords to exit the sector and discourage new ones from entering it. And a sharp reduction in the supply of privately rented homes would severely reduce housing options for Londoners, whilst reducing incentives for landlords to maintain and improve their properties.

Rent controls should be introduced in a stepped way to minimise risks for tenants. And we need more information on landlords, rents, and their business models in order to design a rent control which avoids unintended consequences.

Rent controls are also not a silver bullet. They need to be part of a package of solutions to London’s housing affordability crisis, including a large scale increase in social housebuilding and an improvement in housing benefit. However, private renting will be part of London’s housing system for some time to come, and the scale of the affordability crisis in London means that the question of rent controls is no longer “if”, but increasingly “how”. 

Joe Beswick is head of housing & land at the New Economics Foundation.