Social Framework: 12.1 Introduction

Although there have been periods of recession, as well as times when activity has stalled, the steady growth of GDP has been the most obvious feature of the UK since 1945.

Even after allowing for inflation, there has been a consistent and impressive increase in output over 60 years. This long-term growth has, moreover, been faster than the rise in population and so the piece of the cake available to each individual, income per head, has been rising as the size of the cake gets bigger. (See 12.2 Income Growth.)

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Improvements in living standards since 1945

There are various ways of showing how living standards have improved over time.

Clearly, incomes, the most basic measure, are higher and the fact that people are better off is reflected in the increased number of households with a range of durable goods, such as cars, telephones, televisions/videos/DVDs, mobiles and personal computers.

Similarly, raising the school leaving age and encouraging more school leavers to go into higher education are other indicators of higher real living standards, as are lengthening holidays and increased overseas travel.

Improvements in wealth since 1945

Perhaps the huge jump in home ownership (now at 70% of households) and the rapid increase in share ownership (today, approaching 12 million people own shares in their own name) are the clearest signs of the social and economic changes that took place in the last 20 years of the 20th century.

If there was a watershed in the UK's post-1945 economic and social history, it was probably 1979. The full effects of a wide range of changes made in the 1980s (in taxation, the sale of council houses, trade union laws, privatisation, etc.) took time to work their way through the system but they created a new social order.

Has everyone shared in the benefits?

There are two aspects of the social impact of economic growth that need to be taken into account:

  • The straightforward improvements in living standards that come with regularly rising GDP.
  • The way the benefits of growth are distributed.

Issues such as whether the rich are getting richer and whether the gap between the high- and low-income groups is getting narrower or wider reflect deliberate government policy, and such politically-induced social changes are likely to have long-term economic implications. (See 12.3 Income Distribution.)