BACKGROUND INFORMATION

The Political and Economic Profile of

The United Kingdom of Great Britain and Northern Ireland

Political System

The most important fact in understanding the nature of the British political system is the fundamental continuity of that system. There has not been a revolution of the kind experienced by so many other countries and Britain has not been invaded or occupied for almost 1,000 years. This explains why almost uniquely in the world the British have no written constitution. Any change in the political system has been gradual and pragmatic and built on consensus.

To simplify the British political history, it has essentially been a struggle to shift political power and accountability from the all-powerful king to the national parliament that was increasingly representative of ordinary people and accountable to ordinary people. There have been many milestones along this long and troubled road to full democracy.

The key date in this evolution was 1215 when King John was forced to sign the Magna Carta which involved him sharing power with the barons. This is regarded as the first statement of citizen rights in the world.

The so-called Model Parliament was summoned by King Edward I in 1295 and is regarded as the first representative assembly. Unlike the absolute monarchs of other parts of Europe, the King of England required the approval of Parliament to tax his subjects.

The bicameral structure of the British Parliament - Commons and Lords - emerged in 1341 and the two-chamber model of the legislature has served as a model in very many other parliamentary systems.

It was the 19th century when the franchise was seriously extended. The great Reform Act of 1832 extended the vote from 400,000 citizens to 600,000, but this legislation - promoted by the Whigs (forerunners of the Liberals) - was only carried after being opposed three times by the Tories (forerunners of the Conservatives). In 1918 the country achieved a near universal franchise and the last extension of the franchise (to 18-21 year olds) was made in 1970.

Another important feature of the British political history is that three parts of the United Kingdom - Scotland, Wales and Northern Ireland - have a special status and have local administrations with a wide range of responsibilities. However, England - which represents about 84% of the total UK population of around 60 million - does not have a clear and strong sense of regionalism. So the British political system does not have anything equivalent to the federal system of the 50 states in the USA.

Another important characteristic of the British political system is that, since 1973, the UK has been a member of the European Union (EU). Therefore the UK Government and Parliament are limited in some respects because certain areas of policy or decision-making are a matter for the EU which operates through a European Commission appointed by the member governments and a European Parliament elected by the citizens of the member states.

The UK is a constitutional monarchy but the powers of the monarch as a head of state - currently Queen Elizabeth II – are essentially ceremonial. The most important practical power is the choice of the Member of Parliament to form a government, but the monarch invariably follows the convention that this opportunity is granted to the leader of the political party with the most seats in the House of Commons.

The monarch is determined on the hereditary and primogeniture principles, which means that the oldest male child of a monarch is the next in line to the throne. Under the terms of the Act of Settlement of 1701, the monarch and the monarch's spousecannot be Catholics because the UK monarch is also the Head of the Church of England. These archaic arrangements are currently under review.

In the classical political theory, there is a concept of 'separation of powers', a term coined by the French politician and the enlightenment thinker Montesquieu. The three arms of the state are:

- the executive– the Ministers who run the country and propose new laws;

- the legislature– the elected body that passes new laws;

- the judiciary – the judges and the courts who ensure that everyone obeys the laws.

This is not the case in the UK because all Ministers in the government are members of the legislature, some senior judges sit in the upper house of the parliament and the formal head of the judiciary is a senior minister. This is an illustration of how pragmatic and flexible the British political system is.

Economic Overview

The UK is the 6^th largest economy in the world according to nominal GDP (current prices, US dollars). Presently the UK’s economy encompasses those of its home nations - England, Scotland, Wales and Northern Ireland. The Isle of Man and he Channel Isles are also considered to be part of the British Isles but have offshore banking statuses.

As a member of the EU, the UK is part of a single market, which ensures the free movement of people, goods, services, and capital within member states. Nevertheless, the UK still maintains its own economy and has chosen to continue using the Pound Sterling as its national currency rather than converting to the Euro.

During its heyday as the British Empire, the UK was the largest and most influential economy in the world. As the birthplace of the first Industrial Revolution during the 18^th century, the UK ushered in what economic historians agree to be the most significant event in mankind’s history. The UK was also able to be at the forefront of technological advances during this time, which was a strong economic advantage over any other country in the world. However, as other countries began to catch up technologically wise, UK’s economy was greatly affected by the two World Wars and the breaking up of the British Empire. Although the UK economy has since recovered, it is unlikely to reclaim its former position as the top economic power in the world.

Today, the UK economy faces another struggle to recover fromthe 2008 financial crisis. Presently, the recovery effort has been sluggish. In 2011 a report by the Organization for Economic Co-operation and Development (OECD) ranked the UK as the slowest growing economy in the G7, with the exception of Japan.

The UK’s current inflation rate (2.60 percent in July of 2012) is threatening to sabotage the UK’s government austerity plans to keep interest rates under control. However, the IMF predicts that the UK economy will recover sufficiently enough for inflation rates to hit the government’s target of 2 percent by the end of 2012. In addition, the inflation rate is expected to remain consistent until 2015 at least.

In 2010, The UK had the sixth largest current account balance deficit in the world, behind the US, Spain, Italy, France and Brazil. UK’s austerity plan has been designed to reduce the debt. By 2015, UK’s current account balance deficit is expected to decrease by half.

UK’s GDP (PPP) is also expected to improve over the next three years. By the end of 2015, UK’s GDP (PPP) is expected to reach US$2.608 trillion.

Similarly, UK’s GDP (PPP) per capita is likely to experience slow but steady growth annually during the same period. In 2015, UK’s GDP (PPP) per capita will be the 22^nd highest in the world, coming in at US$40,545.95.

The UK’s GDP make-up is comprised of agriculture (1.4 percent), industries (22.1 percent) and services (77.1 percent). Despite only contributing 1.4 percent of the UK’s GDP in 2010, agriculture is still considered an important part of the UK’s economy and society as it produces 60 percent of the UK’s food needs. Agriculture in the UK is highly mechanized and efficient, combining advanced technology with modern farming techniques. Agriculture in the UK is also highly subsidized, both by the UK government and the EU’s Common Agricultural Policy.

Industries and manufacturing on the other hand are extremely important if the UK wishes to reduce its trade deficit. The UK is the sixth-largest manufacturer of goods in the world according to the value of its outputs. Within manufacturing, the production of automotive or aerospace equipment is a major contributor to the UK’s industries.

However, despite the historical importance of agriculture and industries, services remain the dominant component of the UK’s economy. Finance and banking are by far the UK’s most important services with London being one of the three major economic “command centers” alongside New York City and Tokyo. Important financial institutions located within London include the London Stock Exchange, the London International Financial Futures and Options Exchange, the London Metal Exchange, Lloyds of London, and the Bank of England.

Tourism is another extremely important service in the UK. With more than 28 million tourist arrivals in 2009, the tourism industry is worth nearly £80 million annually. The 2012 London Olympics are expected to be a boost to the UK’s economy – providing an additional US$2.457 billion to the economy over ten years.

COMPREHENSION

Date: 2015-12-17; view: 835