When I first set out as an economist back in the late 1980s, history started in 1979. During the 2000s, the world began in 1997. Today, the financial crisis marks the beginning of time. What I mean is that those became the default dates against which everything was compared.
Naturally enough during the long period of Conservative rule that started in 1979, the point at which Margaret Thatcher became prime minister became the anchor point. So we traced the rapid growth in earnings and the accompanying rapid growth in inequality from then. The arrival of Tony Blair and new Labour provided another anchor. And now, of course, we compare everything to one of the other great turning points — the financial crisis of 2008 or the election of the coalition government in 2010.
These choices really matter, never more so than today. I’m as guilty as anyone of looking at what’s happened over the past decade and proclaiming a message of doom. It’s not hard. The period since 2008 has been uniquely bad in terms of lack of growth in average earnings, in productivity, in incomes. We’ve not seen anything like it in more than a century. The government embarked on a series of cuts to public spending also on an unprecedented scale. Compare anything from the generosity of welfare benefits to spending on schools with 2010 and all you see is gloom.
Perhaps partly as a result, the willingness of both politicians and voters to contemplate radical political and economic change appears to have grown. We soon could be entering a quite new phase in UK policy.
Before we do that, though, we should raise our eyes from the gloom of the past decade and look a little further back. Use 1997 as the starting point and all those things I mentioned above look quite different. Incomes, earnings, school spending, the generosity of the benefit system are all much higher than they were. Actually, I’m going to choose an anchor even further back: the late 1960s. No particularly good reason, other than that is when I was born; it’s also when the organisation I now direct, the Institute for Fiscal Studies, was founded. Compare the UK now with the UK back then and it starts to put our recent travails into some sort of perspective. I would not begin to claim that the present economic and political settlement is anywhere near perfect, but over the last 50 years it has delivered far more than we ever give it credit for.
Take the most basic thing first, life expectancy. At the end of the 1960s, life expectancy at birth for men was 69 years. It is now 79. A man who reached 65 in the late 1960s could expect another 12 years of life. The same man today can expect to live another 18 years. Yes, there are huge inequalities in life expectancy and, yes, this progress has slowed, but these are remarkable achievements. They reflect a whole host of changes — less smoking, improved living conditions and environment, improvements in medicines and technology and massive increases in spending on healthcare. On this most basic metric, the UK today is not only a far better place to be alive than it was 50 years ago, but also a place where it is far easier to stay alive.
Not only do we stay alive longer, we are healthier for longer. And we tend to have our own teeth. Back in the late 1960s, 38 per cent of adults — that’s 38 per cent of all adults — had none of their own teeth, compared with only 6 per cent today.
We also have more money. Much more money. Incomes are nearly three times higher than they were 50 years ago. And while inequality has grown, this increased prosperity has been widely shared. The poorest 10 per cent are more than twice as well off as they were back then. And that measure of income ignores all the other material ways in which we are better off. I don’t simply mean that most of us now have computers, smartphones and access to other new technologies barely dreamt of in the 1960s, when Harold Wilson was talking of forging a new Britain in the white heat of the scientific revolution. Rather more mundanely, central heating, virtually ubiquitous now, was installed in fewer than a third of homes in 1970. Nor did colour televisions, washing machines and many other everyday items enjoy anything like their present ubiquity.
I could go on and mention the huge reductions in pensioner poverty, the massive expansion of higher education, the extraordinary reductions in greenhouse gas emissions, the great improvements in the position of women in the workplace and much more besides.
Of course, I know as well as anyone that we still face big problems. Pollution, housing, social care and perhaps above all the inequalities in health, wealth, income and life chances that persist and, in some cases, continue to grow. There is much to be deeply dissatisfied about. We absolutely need to strive to make things better. In doing so, though, we should remember two things.
First, the trouble with being in a hole — and there’s no denying we are in a hole right now — is that it’s hard to see out. Yet if we do peer over the edge of the hole, we should see that we are high up on the side of a mountain.
Second, as we strive to get out of the hole, fix the problems that got us there and continue upwards, we need not only to recognise and fix what’s gone wrong but also to recognise what’s gone right and the role of the values, institutions and policies that, faltering step by faltering step, got us this far up the mountain in the first place.