Independence in the modern world. Wealthier, happier, fairer: why not Scotland?

Footnotes

1. 2020 was an unusual year due to the impacts of the COVID-19 pandemic. However, for this and other indicators where 2020 statistics are used (because full datasets for 2021 were not available at the time of writing), the pattern from recent years has not changed. The analysis, and the conclusions drawn from it, would not change by using data from earlier years.

2. Ireland is included here as it is one of the comparator countries, but the problems of using GDP as a measure of the Irish economy have been set out by Byrne S, Conefrey T and O'Grady M (2021) The Disconnection of GDP from Economic Activity Carried out in Ireland (Central Bank of Ireland). The specific issues with GDP related measures for Ireland do not, however, affect the overall proposition in this paper that the comparator countries outperform the UK on a wide range of measures.

3. The Organisation for Economic Co-operation and Development (OECD) is an intergovernmental economic organisation with 38 member countries founded in 1961 to stimulate economic progress and world trade. It is one of the world's largest and most trusted sources of comparative socio-economic data and analysis.

4. OECD (2022) GDP per capita and productivity levels, OECD Productivity Statistics (database), https://doi.org/10.1787/data-00686-en (accessed March 2022)(2020 data most recent complete data for comparator countries). (USD, constant prices, 2015, PPPs). See OECD explanation of Purchasing Power Parities (PPPs).

5. OECD (2022) GDP per capita and productivity levels, OECD Productivity Statistics (database), https://doi.org/10.1787/data-00686-en (accessed March 2022). As noted previously, Ireland's relative performance on GDP-related measures should be treated with caution. It is also worth noting the impact of oil production on Norway's GDP per capita from the 1980s onwards.

6. OECD (2022) Income inequality (indicator). doi: 10.1787/459aa7f1-en (Accessed March 2022). A full definition of the Gini coefficient can be found on this page together with other measurements such as the Palma ratio. The UK's performance does not change when using the Palma ratio.

7. OECD (2022) Poverty rate (indicator). doi: 10.1787/0fe1315d-en (Accessed March 2022)

8. OECD (2022) Poverty rate (indicator). doi: 10.1787/0fe1315d-en (Accessed March 2022)

9. World Economic Forum (2020) The Global Social Mobility Report 2020 – Equality, Opportunity and a New Economic Imperative. The World Economic Forum states "Social mobility can be understood as the movement in personal circumstances either 'upwards' or 'downwards' of an individual in relation to their parents. In absolute terms, it is the ability of a child to experience a better life than their parents". Its Global Social Mobility Index focuses on the drivers of relative social mobility (health, education, technology access, work opportunities, working conditions and fair wages, and social protection and inclusive institutions). Higher scoring countries on the index have more of the right conditions in place to foster social mobility than lower scoring countries.

10. Eurostat (2022) Gender pay gap in unadjusted form statistics (europa.eu) (accessed March 2022). 2018 data is used as it is the latest year in the dataset for which complete comparable data is available for the UK and comparator countries at the time of writing. The indicator measures the difference between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees.

11. As noted previously, Ireland's relative performance on GDP-related measures should be treated with caution.

12. OECD (2022) GDP per capita and productivity levels, OECD Productivity Statistics (database), https://doi.org/10.1787/data-00686-en (accessed March 2022)

13. OECD (2022) Gross domestic spending on R&D (indicator). doi: 10.1787/d8b068b4-en (Accessed March 2022)

14. OECD (2022) Investment by sector (indicator). doi: 10.1787/abd72f11-en (Accessed March 2022), and Gross fixed capital formation (% of GDP) | Data (worldbank.org). Corporate investment as a share of total investment (as measured by Gross Fixed Capital Formation) in Ireland has increased from 52% to 90% between 1998 and 2020, reflecting a shift in activity of multinationals over this period. Ireland is an outlier with respect to this indicator and has been excluded from the chart for presentational reasons. Comparable data are not available for Iceland for this indicator.

15. The EU-UK Trade and Cooperation Agreement includes a number of non-tariff barriers to trade as explained here: Sanders, F (2021) Post-Brexit trade (KPMG).

16. Many reports from a wide range of respected economic researchers confirm the negative economic impacts of Brexit. For instance, the Office for Budget Responsibility's Brexit Analysis (2022) assumes that Brexit "will reduce long-run productivity growth by 4% relative to remaining in the EU". The Centre for European Reform found that 'In October 2021, UK goods trade was 15.7% or £12.6 billion lower than it would have been if the UK had stayed in the EU's single market and customs union' (Springford J (2021) The Cost of Brexit (Centre for European Reform))

17. The UK Government's The Benefits of Brexit report (2022) set out a range of ways in which the UK will seek to diverge from EU regulatory standards.

18. For instance, International Monetary Fund Staff Statement on the Economic Impact of War in Ukraine, March 5 2022

19. For instance, Montgomery S (2022), War in Ukraine is changing energy geopolitics (The Conversation)

20. OECD (2022) Wage levels (indicator). doi: 10.1787/0a1c27bc-en. Measuring security of employment is a contentious area (see: O'Connor, S. We're still in the dark about insecure work, Financial Times, 20 April 2021) and there is no simple, agreed measure as for other aspects of the labour market such as employment and unemployment rates. However, there is compelling evidence that volatility of earnings including as a result of irregular payments and hours are significant issues in the UK labour market (e.g. Tomlinson D (2018) Irregular Payments: Assessing the breadth and depth of month to month earnings volatility (Resolution Foundation) and Living Wage Foundation (2021) Almost two-fifths of working adults are given less than a week's notice of working hours).

21. In launching its UK 2030 Inquiry, the Resolution Foundation argued that "It is also not clear that the UK state has the capacity to respond adequately to this scale of [demographic, technological and environmental] change. Assessments of the UK's economy have repeatedly highlighted weaknesses in the state's institutional capacity, or wish, to shape industrial outcomes, with no long-term frameworks to govern industrial change" (Bell T et al. (2021) The UK's Decisive Decade: The launch report for The Economy 2030 Inquiry (Resolution Foundation). See also the World Economic Forum's assessment of 'readiness for economic transformation' discussed in the Economic dynamism section of this paper.

22. The Scottish Government is a founding member of the Wellbeing Economy Governments (WEGo) group, an initiative where member countries are working together to understand key priorities for a wellbeing economy.

23. For instance, the OECD's UK Economic Snapshot (December 2021) noted that the UK has 'one of the highest shares of under-qualified workers among OECD countries'; that 'after decades of public under-investment, there is a considerable need to invest in infrastructure, including digital'; and that 'high child-care costs continue to pose a problem for working mothers'.

24. Scottish Government (2022) National Strategy for Economic Transformation, p11

25. In the Act, the UK Government also took back spending powers in devolved policy areas that had been removed from it on the establishment of devolution in 1999. That has enabled it to exercise unilateral control over the UK replacement to EU Structural Funds ESF (the Shared Prosperity Fund, or SPF), bypassing the Scottish Parliament and Government and undermining devolved decision-making. The UK Government has also ceased participation in the European student mobility programme Erasmus+ and replaced it with the UK Turing scheme. The replacement scheme is likely to see Scotland worse off financially, leaving us unable to capitalise on our historic excellent performance under Erasmus and with reduced opportunities for students, teachers and young people (Scottish Government (2021) After Brexit: The UK Internal Market Act and devolution).

26. Office of the United States Trade Representative (2019) United States-United Kingdom Negotiations – Summary of Specific Negotiating Objectives

27. Scottish Government (2020) UK internal market: initial assessment of UK Government proposals

28. See Scottish Government (2021) The Brexit vote 5 years on what do we know so far? and Scottish Government (2019)
Scotland's Place in Europe: assessment of the revised withdrawal agreement and political declaration

29. UK Government (2022) Levelling Up the United Kingdom, Executive summary, p1

30. Cameron, D. Transforming the British Economy: Coalition plan for economic growth (UK Government speech, 28 May 2010)

31. See for instance: Sandbu, M. Brexit and the Future of UK Capitalism and Weldon, D. 'The British Model and the Brexit Shock: Plus ca Change?', The Political Quarterly, Vol 90, Issue S2, 2019.

32. The Office for Budget Responsibility's Brexit Analysis (2022) assumes that Brexit "will reduce long-run productivity growth by 4% relative to remaining in the EU".

33. O' Rourke, K (2019) A Short History of Brexit (Pelican), p143. Ireland's comparative performance through this period is also discussed in detail in O Grada, C and O'Rourke, K (2021) The Irish economy during the century after partition (The Economic History Review).

34. See references in footnote 16.

35. For instance, the introduction of a Fair Pay Agreements Bill to the New Zealand Parliament.

36. Though Luxembourg has a population of around 630,000, it attracts as much foreign direct investment (FDI) as the United States. The International Monetary Fund describes these inflows and outflows as "phantom investment." Damgaard J, Elkjaer T and Johannesen N. (2019) The Rise of Phantom Investments (International Monetary Fund)

37. There are almost 220,000 cross-border workers in Luxembourg which has a working population of only 499,100 (as at the end of March 2022) Luxembourg Government – Labour market and active population information page.

38. As noted previously, in terms of the statistical analysis included in this paper, Ireland is a special case. The consensus view is that GDP, as conventionally measured across nations, overstates Ireland's national wealth and therefore affects other measures in which GDP is the denominator e.g. debt and deficit. However, although these statistical issues may affect Ireland's standing on some specific indicators, they do not undermine the overall proposition of this paper: that the UK generally under-performs against the comparator nations.

39. See Skilling D (2018) Policy insights for Scotland from small advanced economies (Reform Scotland in association with the Scottish Policy Foundation), and analysis by David Skilling, Landfall Strategy Group, for the Sustainable Growth Commission (2018).

40. For instance, Knight Frank recently identified Edinburgh and Glasgow as the two most innovative UK cities outside London (Knight Frank (2022) UK Cities: Themes for 2022) citing strengths in university research, patent generation, spin off company formation and high research income from industry. The life sciences sector in Scotland contributes £2.4bn gross value added to the Scottish economy and has grown 7% each year since 2010 (Scottish Development International (n.d.) Health and life sciences industries).

41. Further information on the strengths of Scotland's industrial sectors can be found on the Scottish Enterprise website.

42. Scottish natural capital assets that can currently be valued were estimated by ONS to be £206 billion in 2018 (the latest year for which complete figures are available). Scottish Government (2022) Scottish Natural Capital Accounts 2022

43. Scottish Government analysis of the Times Higher Education (2022) World University Rankings 2022

44. The Scottish diaspora has been estimated at between 28-40m people with around 6m in the US alone (Scottish Government (2009) The Scottish Diaspora and Diaspora Strategy). The GlobalScot network continues to support investment in and internationalisation of the Scottish economy and recently celebrated its 20th anniversary.

45. The EY Scotland Attractiveness Survey 2021 found that 'Scotland is outpacing the UK and the rest of Europe in attracting and securing FDI, reaching its highest attractiveness level ever'

46. The Scottish Government's commitment to Net Zero and developing a wellbeing economy is outlined in the National Strategy for Economic Transformation (2022).

47. See for instance, the following recent Scottish Government publications: Programme for Government 2021-22; Steadfastly European: Scotland's past, present and future (March 2021); The European Union's Strategic Agenda 2020-24: Scotland's Perspective (2021); Arctic Connections: Scotland's Arctic policy framework (2019).

48. The Scottish Government plan Scotland: A Trading Nation (2019) explains the importance of provenance and Scottish branding for food and drink exports. Food and drink is Scotland's top international export sector.

49. Scottish Government (2022) Tackling Child Poverty Delivery Plan 2022-26

50. OECD (2022) GDP per capita and productivity levels, OECD Productivity Statistics (database), https://doi.org/10.1787/data-00686-en (accessed March 2022). As noted previously, Ireland's relative performance on GDP-related measures should be treated with caution.

51. OECD (2022) GDP per capita and productivity levels, OECD Productivity Statistics (database), https://doi.org/10.1787/data-00686-en (accessed March 2022)

52. OECD (2022) Employment rate (indicator). doi: 10.1787/1de68a9b-en (Accessed March 2022)

53. OECD (2022) General government debt (indicator). doi: 10.1787/a0528cc2-en (Accessed March 2022)

54. OECD (2022) General government deficit (indicator). doi: 10.1787/77079edb-en (Accessed March 2022). Please note that a high deficit equates to a low position on this chart given that a negative number denotes government borrowing i.e. the country with the highest deficit will have the lowest position in the chart.

55. OECD (2022) Inflation (CPI) (indicator). doi: 10.1787/eee82e6e-en (Accessed March 2022)

56. International Monetary Fund (2015) IMF Survey: Iceland Makes Strong Recovery from 2008 Financial Crisis (IMF Country Focus); Fitzgerald, J (2016) The Irish Crisis: Origins and resolution (The New Palgrave Dictionary of Economics)

57. OECD (2022) GDP per capita and productivity levels, OECD Productivity Statistics (database), https://doi.org/10.1787/data-00686-en (accessed March 2022)

58. OECD (2022) Gross domestic spending on R&D (indicator). doi: 10.1787/d8b068b4-en (accessed March 2022)

59. Scottish Government (2020) Gross expenditure on research and development Scotland 2019

60. OECD (2022) Investment by sector (indicator). doi: 10.1787/abd72f11-en (Accessed March 2022), and Gross fixed capital formation (% of GDP) | Data (worldbank.org)

61. WIPO (2020) World Intellectual Property Indicators 2020 (World Intellectual Property Organization). See resident patent applications per million population for the top 20 origins, 2019, page 46. Ireland and Iceland are outside the top 20 countries considered in this analysis.

62. IMD (2021) The World Competitiveness Yearbook 2021

63. World Intellectual Property Organization. (2021) Global Innovation Index 2021 World Intellectual Property Organization)

64. Schwab K, Zahidi S and World Economic Forum (2020) The Global Competitiveness Report: Special Edition 2020 – How Countries are Performing on the Road to Recovery (World Economic Forum, p51 (Norway and Iceland not included in the analysis)

65. Bloomberg Innovation Index 2021 (paywall). Also see this summary of results from the European Commission (2021) Bloomberg Innovation Index

66. Schwab K, Zahidi S and World Economic Forum (2020) The Global Competitiveness Report: Special Edition 2020 – How Countries are Performing on the Road to Recovery (World Economic Forum), p18

67. Overall, relative to other advanced nations, the UK has high inequality of income, extreme regional inequality and lower social mobility. See Key Fact 3 and Key Fact 6 above and section on regional equality below.

68. OECD (2022), Income inequality (indicator). doi: 10.1787/459aa7f1-en (Accessed March 2022). A full definition of the Gini coefficient can be found on this page together with other measurements such as the Palma ratio. The UK's performance does not change when using the Palma ratio.

69. OECD (2022), Household disposable income (indicator). doi: 10.1787/dd50eddd-en (Accessed March 2022)

70. OECD (2022) Poverty rate (indicator). doi: 10.1787/0fe1315d-en (Accessed March 2022) (including full explanations of how the rates are calculated)

71. OECD (2022) Poverty rate (indicator). doi: 10.1787/0fe1315d-en (Accessed March 2022)

72. Eurostat Child specific material deprivation by age statistics. Most recent available Eurostat data is for 2014, (children aged 1 to 15 years) (Accessed March 2022)

73. World Economic Forum (2020) Global Social Mobility Index 2020

74. OECD (2018), A Broken Social Elevator? How to Promote Social Mobility

75. OECD (2022), Life expectancy at birth (indicator). doi: 10.1787/27e0fc9d-en (Accessed March 2022)

76. UN Human Development Index Rankings 2020 (reporting 2019 HDI values) (Accessed March 2022)

77. OECD Better Life Index. (OECD Statistics page for Better Life Index Data) (Accessed March 2022)

78. Helliwell J et al. (2022) World Happiness Report 2021 (World Happiness Report) p18

79. Ortiz-Ospina E and Roser M (2022) Happiness and Life Satisfaction (Our World in Data)

80. Global Wellbeing Indicators 2020

81. Clarke S. (2019) Mapping Gaps: geographic inequality in productivity and living standards (Resolution Foundation)

82. Professor McCann, co-director of the Productivity Insights Network, was recently appointed Chair of Urban and Regional Economics at Alliance Manchester Business School, University of Manchester

83. Productivity Insights Network (2019) Perceptions of Regional Inequality and the Geography of Discontent: Insights from the UK (University of Manchester) p14

84. UK Government (2022) Levelling Up the United Kingdom, p1

85. OECD Indicators of Employment Protection Legislation (latest year 2019) Among OECD nations, only the US has fewer legal employment protections than the UK.

86. For instance, the Employment Acts of 1980 and 1982, and the abolition of the National Economic Development Council in 1992. A pertinent recent example would be the decision to abolish the UK Commission for Employment and Skills (an advisory body on skills and employment policy involving trade unions, employers and government) in 2017.

87. OECD Indicators of Employment Protection Legislation (latest year 2019)

88. OECD (2022) Average wages (indicator). doi: 10.1787/cc3e1387-en (Accessed March 2022)

89. OECD (2022) Wage levels (indicator). doi: 10.1787/0a1c27bc-en (Accessed March 2022). Norway and Switzerland are not included in this dataset. The incidence of low pay refers to the share of workers earning less than two-thirds of median earnings.

90. United Nations Development Programme (2020) Human Development Reports – Income share held by richest 1% of population (UNDP). Definition: share of pre-tax national income held by the richest 1% of the population. Pre-tax national income is the sum of all pre-tax national income flows accruing to the owners of the production factors, labour and capital, before taking into account the tax/transfer system and after taking into account the pension system.

91. Eurostat (2022) Gender pay gap in unadjusted form statistics (europa.eu) (accessed March 2022). The indicator measures the difference between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees.

92. Eurostat (2022) In-work at risk of poverty rate by age and sex statistics 2018, the latest year for which data for all countries are available

93. OECD Better Life Index 'Employees working very long hours indicator' which measures the proportion of employees whose usual hours of work per week are 50 hours or more.

94. OECD Report (2020) Paid sick leave to protect income health and jobs through the Covid crisis, July 2020, p9, Figure 3. See also OECD (2020) Supporting people and companies to deal with the Covid-19 virus March 2020

95. Esping Anderson, G. The Three Worlds of Welfare Capitalism. Princeton University Press 1990

96. European Commission (2022) Indicator data- Net Replacement Rate including UB (Accessed 14 March 2022). This source provides data back to 2001 which shows that although there has been some movement – both up and down – in national replacement rates, the differentials between countries are long-standing. The situation described in Table 1 is not an artefact of temporary support measures introduced in response to the Covid-19 pandemic.

97. See for instance the current UK Government's 'Way to Work' initiative (January 2022) and this response – Wilson T (2022) Way to Work – A first step, but we can and must do better (Institute for Employment Studies) – which discusses the problems with a 'jobs-first' approach.

98. There is evidence that high replacement rates coupled with well-funded and effective labour market policies are particularly successful in creating better job matches in Denmark and Sweden. See, for instance, Bjorsted E, Bova E and Dahl S. Lessons from the Nordics: How to Fight Long-term Unemployment, Review of European Economic Policy, Vol 51, No 3, 2016, pp. 172-178

99. The slowdown in US wage growth post financial crisis has been attributed to a decrease in job-to-job moves, see Danninger, S (2016) What's Up With U.S. Wage Growth and Job Mobility? (IMF Working Paper). For a broad discussion on job mobility and wages, see Cominetti N et al. (2022) Changing Jobs? Change in the UK labour market and the role of worker mobility (Resolution Foundation).

100. OECD (2022) General government spending (indicator). doi: 10.1787/a31cbf4d-en (Accessed March 2022)

101. OECD (2022) General government revenue (indicator). doi: 10.1787/b68b04ae-en (Accessed March 2022)

102. Besley, T. State Capacity, Reciprocity and the Social Contract, Econometrica, Vol 88, Issue 4, July 2020, pp1307-1335

103. OECD (2022) Trust in government (indicator). doi: 10.1787/1de9675e-en (Accessed March 2022)

104. Reid, S, Montagu I, and Scholes A (2019) Scottish Social Attitudes Survey 2019: attitudes to government and political engagement (Scottish Government). Data are available for all years between 1999-2019, apart from 2008, 2014 and 2018. Data from the most recent Scottish Social Attitudes survey are due to be published in autumn 2022.

105. Besley T and Dann C (2022) How might an independent Scotland build fiscal capacity? (Economics Observatory)

106. For background, see European Commission – What is flexicurity?

107. For example, the Sustainable Growth Commission (2018) Scotland – The New Case For Optimism: A strategy for inter-generational economic renaissance

108. Brewer M et al. (2022) Social Insecurity: Assessing trends in social security to prepare for the decade of change ahead (Resolution Foundation) p74, Figure 27

109. OECD (2022) Public spending on labour markets (indicator). doi: 10.1787/911b8753-en (Accessed March 2022)(latest data 2019)

110. OECD (2022) Public spending on labour markets (indicator). doi: 10.1787/911b8753-en (Accessed March 2022) 'Total Spend' indicator, latest data 2019

111. OECD (2022) Public spending on labour markets (indicator). doi: 10.1787/911b8753-en (Accessed March 2022) 'Sheltered and supported employment and rehabilitation' indicator, latest data 2019

112. The argument that more open economies tend to have higher state spending (on LMP and other programmes) is made in classic texts by Rodrik, D (1998) Why Do More Open Economies Have Bigger Governments? (Journal of Political Economy) and Cameron D (1978) The Expansion of the Public Economy: A Comparative Analysis (The American Political Science Review)

113. Background on JSCs can be found at European Monitoring Centre on Change (2021) Job Security Councils (Eurofound); Trade Union Advisory Committee (2018) The Swedish Job Security Council – a case study on social partners' led transitions (TUAC); Nance, M and Daly, J (2018) The Nordic Model and Structural Change: Lessons from the Collapse of Saab Automobile AB (Intereconomics)

114. European Monitoring Centre on Change (2021) Job Security Councils (Eurofound)

115. Koo J, Choi Y and Park I (2019) Innovation and Welfare: the marriage of an unlikely couple (Policy and Society). Other recent research highlights the positive impact of greater equality on productivity (for instance, Hseih, C-T et al. (2019) The Allocation of Talent and US Economic Growth (Econometrica) and the negative impact of persistent inequality on innovation – for instance, Bell, A et al. Who Becomes an Inventor in America? The Importance of Exposure to Innovation, Quarterly Journal of Economics, Vol 134, Issue 2 May 2019, pp647-713.

116. State of European Tech 2020

117. The combined national and sub-national tax rate on profits for the majority of comparator nations ranges between 20-25%. Ireland is an outlier at 12.5% and the UK rate is currently 19%. OECD Statutory Corporate Income Tax Rate data (combined central and sub-national government rates) 2021.

118. OECD Indicators of Employment Protection Legislation and Indicators of Product Market Regulation

119. Coulter, S (2018) Social Partnership in the Europe in the face of the future (LSE)

120. The Sustainable Growth Commission emphasised the importance of consensus-driven approaches to economic development as a key characteristic of successful, smaller nations.

121. The Nordics have the highest rates of trade union density in the OECD. Although the Netherlands and Switzerland have lower rates of trade union membership than the UK, more workers in these nations benefit from being part of a collective agreement. See OECD Trade Union Dataset

122. Cazes S, Garnero A and Martin S (2017) The state of trade unions, employer organisations, and collective bargaining in OECD countries (VoxEU)

123. Danish Government (2019) Follow-up on the Danish Disruption Council, p6

124. Thorman K (2018) The Disruption Council: a partnership for the future of Denmark (Danish Ministry of Employment), slide 6

125. Danish Government (2019) Follow-up on the Danish Disruption Council, p11

126. European Commission Digital Economy and Society Index 2021

127. For definition of and legal background to codetermination see Eurofound (2020) Co-determination

128. For a summary of national arrangements and legal status see: Conchon A (2015) Workers voice in corporate governance: a European perspective (Trades Union Congress)

129. Jaeger, S, Noy, S and Schoefer, B (2021) What Does Codetermination Do? (Harvard Law School)

130. Holmberg S. (2017) Fighting Short Termism with Worker Power (Roosevelt Institute)

131. Jaeger, S, Schoefer, B and Heining, J (2020) Labour in the Boardroom (The Quarterly Journal of Economics)

132. Hayden, G and Bodie M (2021) Codetermination in Theory and Practice (Saint Louis University School of Law)

133. Institute for Codetermination and Corporate Governance (2019) Why Codetermination?

134. Euricse Research Team (2021) World Cooperative Monitor 2021 (International Cooperative Alliance)

135. European Commission (n.d.) Cooperatives

136. Kruse, D (2016) Does employee ownership improve firm performance? (IZA World of Labor); Perotin V (2020) What do we really know about worker co-operatives? (Co-operatives UK); Logue, J and Yates, J (2006) Cooperatives, Worker-Owned Enterprises, Productivity and the International Labor Organization (Economic and Industrial Democracy)

137. Thomsen, J (2017) 'The Danish Industrial Foundations' (DJOF Publishing); Hansmann, H and Thomsen, J (2021) The Governance of Foundation-Owned Firms (Journal of Legal Analysis)

138. Comparative political economy has tended to categorise the UK as a 'liberal market economy' (LME) along with the US, Australia, Canada and Ireland. The distinguishing characteristics of an LME are usually defined as uncoordinated and adversarial industrial relations; weak systems of vocational skills development; competitive and arms-length inter-firm relations; systems of corporate governance that exclude non-shareholder interests; and a reliance on short-term rather than patient capital. In comparison, 'co-ordinated market economies' (CMEs) such as Germany, Sweden and Austria tend to have more co-ordinated industrial relations; more developed systems of skill specific vocational education; more access to patient capital and more collaborative inter-firm relations. See, for instance, Hall, A and Soskice, D (2001) Varieties of Capitalism (Oxford Scholarship Online).

139. The Purposeful Company (2017) The Purposeful Company – Policy Report (Big Innovation Centre), p64

140. "The one country that stands out in this regard is the UK. It has far fewer family owners than most countries around the world, and even those that are family controlled display a high level of attrition through takeovers, financial failure or transitioning into some other form of ownership" Mayer, C. 'Prosperity' (Oxford University Press, 2019), page 90.

141. Haldane, A. Who Owns A Company? (Bank of England speech, May 2015)

142. Kay J (2012) Kay Review of UK Equity Markets and Long-Term Decision Making (UK Department for Business, Innovation and Skills)

143. Cunliffe, J. Are Firms Under-investing – and if so why? (Bank of England Speech, February 2017)

144. See for instance Professor Colin Mayer's recent books, 'Firm Commitment: Why the corporation is failing us and how to restore trust in it' (Oxford University Press, 2013) and 'Prosperity: Better Business Makes the Greater Good' (Oxford University Press, 2018).

145. See for instance Andrew Smithers' book 'The Road to Recovery: How and Why Economic Policy Must Change' (Wylie, 2013) and related 2015 Financial Times article Executive pay holds the key to the productivity puzzle.

146. Coyle, D and Muhtar, A (2021) UK's Industrial Policy: Learning from the past? (Bennett Institute for Public Policy, University of Cambridge)

147. OECD Indicators of Employment Protection Legislation, 2019 and Product Market Regulation 2018 (both latest available data)(Accessed March 2022)

148. Michie, J and Sheehan, M (2003) Labour Market Deregulation, 'Flexibility' and Innovation (Cambridge Journal of Economics); Pannini, E) (2018) The Hidden Damages of Labour Market Deregulation and the Underrated Merits of Trade Unions (PhD Thesis, London School of Economics and Political Science)

149. Scottish Government (2021) After Brexit: The UK Internal Market Act and devolution (Scottish Government)

150. Rees-Mogg, J. 'I want Sun readers to write to me and tell me of any petty old EU regulation that should be abolished', The Sun, 10 February 2022

151. See references in labour market section, above.

152. Howell, D and Kalleberg, AL (2022) Labour market inequality: a comparative political economy perspective (IFS Deaton Review of Inequalities)

153. A recent report for Policy Exchange argued that "The British Economy in the course of the 1980s and 1990s was both de-industrialised and de-institutionalised; the legacy of both lies heavily on the contemporary British economy. The absence of these mediations between individuals, markets and the state are now holding the economy back" Bickerton C (Brexit and the British Growth Model: Towards a new social settlement page 38-39 (2018).

154. These components of the UK model are discussed in the previous section. For additional analysis and commentary linking them to low productivity and high inequality, see for instance: Mayer, C (2022) Inequality, firms, ownership and governance (IFS Deaton Review of Inequalities); Smithers, A (2019) Productivity and the Bonus Culture (Oxford University Press); Hutton W. 'How Good We Can Be' London: Little, Brown, 2015; De Loecker J, Obermeier T and Reenen J (2022) Firms and Inequality (IFS Deaton Review of Inequalities)

155. Sandbu, M. Brexit and the Future of UK Capitalism, Political Quarterly, Vol 90, Issue S2, pp187-199

156. O'Rourke, KH (2017) Independent Ireland in Comparative Perspective, Irish Economic and Social History, Vol 44, No 1, pp 19-45