The UK is the fifth richest country in the world.
In terms of total GDP, it is the sixth- or ninth-richest, depending on which measure you use. In terms of GDP per capita, it is the 20th- or 27th-richest.
14 million people are living in poverty.
Correct for the UK in 2017/18, according to the main measure of relative poverty used in the UK.
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“14 million people are living in poverty in ours, the fifth richest country in the world”
Jeremy Corbyn, 24 September 2019
In his speech to the Labour Party conference, Jeremy Corbyn made the point that 14 million people are living in poverty in the UK despite it being the fifth-richest country in the world.
The UK is either the sixth- or ninth-richest country in the world based on the total size of GDP (depending on which of two main measures you use), although it was until recently the fifth-richest on one of those measures.
However, the size of the UK’s GDP is not the most relevant to the point Mr Corbyn seems to be making. His point effectively seems to be about inequality and the potential to redistribute the UK’s significant wealth more evenly.
But to talk about potential wealth redistribution within the UK, we need to know how wealthy the average person is, not the size of the UK’s GDP in total.
The more relevant measure is average GDP per person. This still has drawbacks which we’ve discussed before, but it gives a clearer indication of how wealthy people are. On this measure, the UK is the 20th-or 27th-wealthiest country in the world.
How many people are in poverty in the UK?
An estimated 14.3 million people were living in poverty in the UK in 2017/18, according to the Social Metrics Commission (SMC), based on government data.
The SMC is an organisation which has been working to improve the way we understand and measure poverty in the UK. It has been publishing estimates since 2018. You can read more about how they define poverty here.
Another main measure is “absolute low income”, published by the government, which estimates 12.5 million people in poverty (once housing costs are accounted for) in 2017/18.
No single number gives a “definitive” figure for poverty, as a lot depends on how you define it, but these are among the best available options.
The UK is either the sixth or ninth biggest economy in the world
When Jeremy Corbyn says the UK is the fifth richest country in the world, he’s presumably referring to the size of the UK’s GDP.
GDP is the total value of everything that happens within a country’s economy—the goods and service made and the money earned—and is a common measure of the size of a country’s economy.
To make a comparison between countries, you need to convert each country’s GDP into a common currency.
This is most commonly done by converting local currencies into US dollars, using market exchange rates.
One problem with converting currencies using market exchange rates is that different countries have different prices levels—for example, $100 can buy you more goods and services in Kenya than in the USA.
A measure known as “purchasing power parity” (PPP) aims to account for this. On the PPP measure, the UK is the ninth-richest country in the world.
We’ve written more about how PPP is calculated here.
Jeremy Corbyn’s comparison is not the best
Jeremy Corbyn is making the point that there are 14 million people in poverty despite the UK’s significant wealth. This effectively seems to be a point about inequality—the UK’s significant wealth could be more evenly distributed across the population to reduce poverty.
But if we want to talk about the poverty and wealth redistribution, the total size of a country’s GDP isn’t the best figure to use.
That’s because it overlooks how big the population is and, as a result, how much wealth the average person has.
For example, consider the fact that China has a far bigger GDP than the UK ($14.2 trillion to the UK’s $2.8 trillion—based on market exchange rates).
So despite China being a much bigger economy, the average person is much wealthier in the UK.
That still makes the UK one of the world’s wealthier countries. But fifth-richest is an overstatement in this context.
Correction 10 October 2019
A previous version of this article reported China and the UK's GDP in billions rather than trillions.