Brian Monteith: Time to reflect on Britain’s lot

Such is this banal and celebrity-focused age that our monarch is expected to conform to – but fortunately manages to rise above. A far more interesting commentary about the Jubilee arrived on my desk this week; published by that rather august and dusty dry body, the Institute for Fiscal Studies, it compared the state of Britain back in 1977 at the time of the Silver Jubilee with the state of Britain now, 35 years later. In particular, with the IFS being concerned with taxes, earnings and living standards, it looked at how well off we are now compared with back then – which given both jubilees were in the middle of economic recessions made for interesting reading. Well, more interesting than Harry Webb. For a start, it explains how we are in worse economic straits now than we were in 1977. “National income has fallen further and is recovering more slowly than it did during the recession at the end of the 1970s” and “our expectation is that by 2015–16 incomes will still be no higher than in 2002–3. Not even the 1970s had that long a period without any growth in real incomes”. Ouch! Back then there was also the IMF bailing out the nation – but even though that has been averted our predicament is more challenging: “The deficit in 2009–10 was, relative to national income, more than 50 per cent higher than its 1975–76 peak and public spending is being cut much more severely” with cuts to public services of 16 per cent over the seven years from 2010 compared with a cut of “only” nine per cent over seven years in the late 70s and early 80s. So, in case you doubted it, this recession is truly grim. It is therefore all the more astonishing that the report reveals just how much better off we generally are – and will remain – despite the recession. For all our economic woes our household incomes have more than doubled in the 35 years between the jubilees. For those of us that remember 1977, including Virginia Wade winning Wimbledon, it is maybe hard to fathom just how much our incomes and spending power, even after inflation, have increased – and for all groups. For instance, pensioner couples have seen their average net weekly incomes rise by 119 percent from £239 in 1977 to £522 in 2009 (at 2009 prices). For couples with two children the increase has been 115 percent. Even lone parents with one child have enjoyed a real-terms increase of 34 per cent. The fact that people are generally better off is confirmed by analysing what people spend their earnings on, with the share going on food falling and the amount going on property and luxuries increasing. More people have cars now (and more than one car) go on foreign holidays, have two properties and yet, it may surprise you, are spending less on alcohol. The biggest social change has been the number of women now going to work, bringing in additional household income and establishing their own pension too – and this has been helped by a large shift from manufacturing to service sector employment in finance, education and health. We now have a larger, better-qualified workforce, with more people with degrees, again especially for women. Another social change is the large number of homeowners – doubling in Scotland from 33 percent to 67 percent in the period. This was prompted by Thatcher’s belief in creating a property-owning democracy, as evidenced by the discounted council house sales that marked the largest ever transfer of wealth in British history. The one other statistic that also shouts out is that while we have been getting wealthier we have also become less equal – in other words some people have been getting wealthier faster. The report says up to 1977, income inequality had been on a long-term downward trend but: “The 1980s saw a historically unprecedented increase in inequality . . . which has not been unwound since, despite the very substantial growth in the benefit and tax credit budget in the 2000s.” It would seem that equality and income growth (or at least large income growth) are mutually exclusive in our post-industrial society even when governments seek to transfer wealth from the rich to the poor. This is most marked in the disparities between some cities (Edinburgh and Glasgow) or within them (Glasgow’s West End with its East End). We know success can breed success; but do some welfare benefits trap people into a dependency from which they can’t escape – or have no wish to? When the Queen looks back on those past 35 years she will remember that there was at times great social disruption but she cannot but notice that the lot of the British has generally improved. The stability she has provided in those times of strife have been part of that recipe – far more than the circuses we witnessed this week. If only Andy Murray could win Wimbledon.