Britain enjoys 'second-highest standard of living in EU'
Figures from official statistics body Eurostat shows Britain ahead of several major European countries, but it falls back under the GDP measure
Tuesday 13 December 2011
Revealing: Eurostat's 'actual individual consumption measure' strips out services paid for by governments, such as the NHS in the UK.
Photograph: Monty Rakusen/Getty Images/Cultura RF
Britain has a standard of living 21% higher than the average in the 27 countries in the EU, and second only to Luxembourg, according to figures released by Eurostat
Analysis by the official statistics body for the EU found that although the UK is ranked only 10th in the EU on the traditional measure of GDP per capita (ahead of France but behind Germany), it shoots towards the top of the table once the figures are adjusted for free, publicly supplied goods such as the NHS.
Eurostat said "actual individual consumption" (AIC) in the UK rated 121 on its index, where 100 is equal to the average in the union. The British figure is significantly higher than many countries normally regarded as having a higher standard of living than the UK, including Sweden (114), Denmark (114) and the Netherlands (116).
Eurostat said its AIC figure is a better reflection of real household living standards than GDP per head.
"AIC consists of goods and services actually consumed by individuals, irrespective of whether these goods and services are purchased and paid for by households, by government, or by non-profit organisations," it said. In contrast, GDP measures how much households spend rather than how much they consume.
"In international volume comparisons of consumption, AIC is often seen as the preferable measure since it is not influenced by the fact the organisation of certain important services consumed by households, like health and education services, differs a lot across countries. For example, if dental services are paid for by the government in one country, and by households in another, an international comparison would not compare like with like," it said.
Bulgaria is Europe
's poorest country on both GDP and AIC measures, while outside the EU27, Norway and Switzerland are the richest.
The data underlines how far some countries have risen and fallen in the tables during the financial crisis. Ireland registered a GDP per head that was 48% above the EU average in 2007 – and higher even than Switzerland – but has since dropped to 28% above the average. Its AIC score has also fallen heavily from 109 in 2008 to 102 in 2010. Britain's relative GDP per head peaked in 2004 and has since eased back.
Eurostat figures also reveal that prices in the UK were 2% above the EU average in 2010. Denmark was the most expensive EU country (47% above the EU average) while Bulgaria was the least expensive (55% below).
Actual individual consumption per capita (top 10)
Based on average for the EU 27 countries = 100
United Kingdom 121
Britain enjoys 'second-highest standard of living in EU' | Money | theguardian.com