De-industrialisation in Scotland

(Continuing Sam's piece on Health in Scotland.)

"Two important bits of research into the effects of de-industrialisation appeared recently. One is:  "Health and its determinants in Scotland and other parts of post-industrial Europe: the "Aftershock of de-industrialisation" study-phase two" . The findings can be found in Briefing Paper 31, February 2012 from Glasgow Centre for Population Health.

Twelve regions where there had been de-industrialisation were examined. In the vast majority of these regions de-industrialisation caused economic and social upheaval and affected the health of populations.

However, the poor health status of West Central Scotland (WCS), compared with the other regions could not be explained in terms of current levels of poverty and deprivation.  Nor did it seem that historical poverty was responsible for the current poor health outcomes in WCS.

Post-industrial WOS

Compared with other post-industrial regions in mainland Europe, income inequalities in WCS and in other UK de industrialised regions are greater.

Health inequalities appear to be wider in WCS than in other regions.

WCS stands out in terms of a number of social factors. For example, proportionally higher numbers of its population live alone or as lone parents. Similar differences are seen in relation to aspects of child and maternal health (e.g. higher rates of teenage pregnancy).

Some of these distinguishing features - higher income inequalities, more lone parent households, more teenage mothers- are true also of the other UK post-industrial regions. In addition, these regions share a recent economic history different to that seen elsewhere in Europe.

The results suggest that poor health in WCS can be attributed to three layers of causation. First, de-industrialisation is a fundamental driver of poor health. WCS, alongside other parts of Europe, has suffered from this experience.

Second, WCS is different from the rest of the European regions studied. WCS has had different economic  and social trends. In particular WCS has been exposed to the neo-liberal policies of the UK. It has also experienced higher levels of economic inequality and higher proportions of potentially vulnerable households.

The third level has to do with factors  which causes WCS to experience worse health outcomes than similar regions within the UK. Merseyside is an example. It has a similar history and economic profile to WCS but has lower mortality.

Further research into the health effects of de-industrialisation was done by Gordon Daniels as his Ph.D thesis, "Underlying influences on health trends in post-industrial regions of Europe", under the supervision of Professor Hanlon. This research helps to explain why population health in WCS has fallen behind comparably de industrialised mainland Europe regions.

Economic models 1945-80.

A key conclusion is that, post 1945-80,  France and Germany managed better the course of de-industrialisation compared with those in the UK. 

Post Industrial Germany

France and Germany are countries with "co-ordinated economies" while the UK has a "free market" economy. In the UK this means that businesses, being primarily small businesses of fewer than 20 employees, are barely able themselves to do vocational training, basic research and development or create the conditions for long term financing. 

Some UK businesses recapitalise on the stock market. They prioritise profitability rather than growth and employment. Employee participation is weak and there is low trade union density. Generally, qualifications are low-level. Wages are low. the company organisation is hierarchical.

In Germany, in contrast, 90% of  companies are organised in federations of enterprises and it is compulsory for all companies to belong to Chambers of Commerce and industry. 

Banks are "stakeholders" in German companies and company policy is directed at long-term goals. Workers are represented on Works Councils and participate on company supervisory boards. 

Training is a matter of investment in the company. Skill and wage levels are relatively high and the wage spread is relatively low.

Thus, when de-industrialisation occurred in France and Germany, there was, in advance, concern about the potential social cost. This had a beneficial impact on life expectancy.

WCS lost its competitiveness earlier than other selected regions because the large industrial enterprises found themselves "locked-in" to an increasingly outmoded model. The state was reluctant to invest in modernisation or accept the social costs of closures.

The timing and speed of de-industrialisation also had an effect. From the 1970s onwards de-industrialisation was quick and severe in the UK, particularly in WCS, compared with elsewhere in Europe. At the same time, the government response (in terms of softening or slowing the impact of de-industrialisation) was less effective than it was in other countries.

Social protection offered during the period of de-industrialisation was also different. Typically, the income replacement rates in the UK did not match those of Germany or France and the proportion of the workforce likely to receive redundancy payments was comparatively low. Many workers, particularly men from the manufacturing industrial sector, entered into long periods of unemployment and inactivity.

Post industrial Strasbourg

The degree of autonomy/decentralisation experienced by WCS relative to all the other selected regions was limited. Although local government was a relatively strong player in the post-war era, reforms by the UK Conservative government in the early 1980s weakened local government and arguably disadvantaged the region. More protective economic policies were implemented in other regions such as the Ruhr and Nord-Pas-de-Calais. Furthermore, these same regions more successfully restructured their economies in the aftermath of de-industrialisation.

Current economic models.

The UK's liberal market economy contrasts with the co-ordinated market economies of Germany and France and the dependent market economies of Poland and the Czech Republic. Since 1980 the neo-liberal policies in place have resulted in much wider income inequalities across the UK. 

Also, compared with other economic models, liberal market economies tend to place less emphasis on vocational training within institutions and less mutual co-operation within and between organisations and firms. The research argues that as a consequence of this, local institutions and aspects of civil society played more positive roles in the other regions which were subject  to different economic models.

 Current levels of social protection are lower in WCS and the rest of the UK than in other regions and countries. That places WCS at a comparative disadvantage given the importance of social protection for population health. Policy-makers can affect health outcomes. The key is to focus on the creation of a successful society with a strong diverse economy. UK governments  for the past 50 years have failed to do that.  An improvement in health outcomes for Scotland depends on control of our own economic and welfare policies.