Britain is actually in pretty good shape

The UK may have its problems, but not nearly as many as people seem to think, says Merryn Somerset Webb.

Corbyn and Johnson © JEFF OVERS/BBC/HANDOUT/EPA-EFE/Shutterstock

Whichever of these two has won, the message is: don't mess it up
(Image credit: Corbyn and Johnson © JEFF OVERS/BBC/HANDOUT/EPA-EFE/Shutterstock)

This has been a more than usually bad-tempered election campaign. We are going to press just as it ends, so as I write, I'm afraid I still don't know what the outcome is. However, here's what we do know: regardless of who has how many seats in Parliament this morning, they are starting in a pretty good place. Yes, we still have a budget deficit, and yes, all the party promises of more, more and then a little more spending during the campaign were uncomfortable. But nonetheless, the work done over the last decade has seen the budget deficit as a percentage of GDP fall to a mere 1.2% by last March. Practically balanced.

The employment rate is 76%. The unemployment rate is 3.8%. Real (after-inflation) wages are rising. Our economy isn't booming, but it is still growing (despite the hideous investment-deterring parliamentary indecision of the last three years). The UK is climbing the global educational ranks even with spending on education more tightly controlled than many would like, we are now 14th in science and reading and 18th in maths (out of 79 countries). The NHS, despite Labour telling us every couple of years that we have 24 hours to save it, trundles on. Not perfect. Very far from being the best system in the world. But still there, offering free-at-point-of-use healthcare to 67 million people.

New statistics out this week from the Office for National Statistics tell us that between 2001 and 2019 there was a "statistically significant decrease" in the mortality rate for the under 75s. That's good. And while high house prices and an ageing population are making the wealth inequality statistics pop up (it's happening in the US too), we are well on the way to making the UK a shareholder democracy and sorting out our pension problems at the same time (unlike, say, France). Thanks in large part to auto-enrolment, 42% of total UK wealth is held in pensions (from 34% in 2006-2008) and most working people now have stakes in the equity market. They can also hold those stakes increasingly cheaply (we talk about the new Vanguard Sipp in this week' smagazine). It's also worth noting that amid all the talk of inequality, when it comes to opportunity, the UK is, as Peter Saunders puts it in his new book on the subject (see my book reviews here), "remarkably fluid and open".

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There's bad news of course. Gross government debt is still around 80% of GDP. Our housing woes are still with us. Too many working people are caught up in the welfare state. The low interest-rate environment is causing no end of trouble and could be with us for some time (even Australia is about to start quantitative easing). Productivity growth is horrible and it's easy to be anxious about the future of work in a world of robots. But the core point is that the UK is in pretty good shape. Let's hope that whoever is about to be prime minister, at the very least keeps it like that.

If you can't bring yourself to think about the future of the UK today, James McKeigue looks at how best to invest in the Pacific Alliance nations. Chile Colombia, Mexico and Peru might have their problems, but (rather like the UK) they don't have nearly as many as investors seem to think. If even that doesn't do it for you, forget politics. Think about Christmas wine instead.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.