GDP Growth
average growth rate by decade
The UK Index of
Systemic Trends
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Preface
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Note on data
Note on brexit
Authors section will go after Preface section
Joe Guinan
President
The Democracy Collaborative
Thomas M. Hanna
Vice-President of Research and Policy
The Democracy Collaborative
Neil Mclnroy
Global Lead for Community Wealth Building
The Democracy Collaborative
Howard Reed
Senior Fellow
The Democracy Collaborative
Section 1: A Decaying Economy
Britain is in deep long-term economic difficulties.
We can see this when we look at the standard indicators used to measure economic health. The overall picture is one of stagnation, inequality, stark and growing regional disparities, and widespread social decay.
“The British people have been widely let down by the economic model that was installed in the 1980s, and by the political leadership that continues to hold in place and maintain a failing model through persistence with outdated and damaging public policies.”
The British people have been widely let down by the economic model that was installed in the 1980s, and by the political leadership that continues to hold in place and maintain a failing model through persistence with outdated and damaging public policies – something that has been true no matter what the party composition of the government of the day.
It is important to emphasize that this is true not only when viewed through the lens of alternative progressive frames of reference such as Wellbeing or the Human Development Index but also when the performance of Britain’s economy is looked at through the orthodox measurements by which the system prefers to measure itself.
GDP and Beyond
The health of an economy is usually evaluated using a set of conventional measures of economic performance that include growth, employment, productivity, wages and incomes, inflation, and poverty.
A degree of caution is required in the use of such measures.
As the gap widens between headline economic numbers and how ordinary people are experiencing the economy in their everyday lives, conventional indicators are increasingly recognized as inadequate and insufficient, leaving out many important measures of societal health and wellbeing. Many of them were in fact never intended for the widespread policy uses to which they have continually been put.
In National Income 1929-32, the first calculation of what became gross domestic product (GDP), the authors (including Simon Kuznets) cautioned that “the welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.”[19]
Among the famous limitations of the calculation of GDP are that only products or services transacted in the market are included, whereas factors such as household production, volunteer work, income from barter, and subsistence work are excluded.
Moreover, market prices determine the contribution of a product or service to the total, regardless of any consideration of social value. Every pound spent on tobacco and alcohol, bombs, or oil spill clean-ups provides the same contribution to GDP as a pound spent on education, food, or housing, when there is clearly a vast difference in their social value.
The value of natural and man-made assets available to an economy and society are also not considered in GDP. When a country clear-cuts a forest, the value of the resulting timber is counted as a positive contribution, while the loss of the forest itself (and all the ecosystem services it provides) is absent from the accounting.
Nor does GDP include any information on social equity: it is silent on income distribution, poverty, and much else besides. GDP also does not include any information on non-economic factors that affect collective and individual quality of life, such as health, freedom, physical and financial security, and political empowerment.[20]
There is also a deep academic and policy literature on both the ecological and social limits to growth, dating back to the 1970s.[21]
“In particular, they demonstrate that the economic model that has remained dominant in Britain (as elsewhere) over the past several decades is comprehensively failing – even when looked at on its own terms and using its own preferred measurements.”
For all these reasons, we should be sceptical of the value of the conventional set of purely economic measures as a definitive gauge of societal health and wellbeing. That said, these measures remain useful as indicators of some of the long-run trends as to how well an economy is functioning overall (and for whom), and thus remain important to consider.
In particular, they demonstrate that the economic model that has remained dominant in Britain (as elsewhere) over the past several decades is comprehensively failing – even when looked at on its own terms and using its own preferred measurements.
When looked at using these common economic indicators, Britain’s economy is mired in serious long-term difficulties.
1.1 Growth
Chief among conventional economic indicators is growth – and specifically growth in GDP.
In Britain, as in many countries, GDP growth has become both a catchall indicator of how the economy is performing, and the holy grail of economic policymaking for governments of all party political stripes to pursue.
Prior to winning the July 2024 UK general election, the Labour Party under Keir Starmer set out a target of 2.5% annual GDP growth, aiming to produce the highest per capita growth in the G7.
There is little reason, based on the long-run growth data on the British economy and the limitations of the kinds of measures contemplated in current UK policy frameworks, to think that such a target is anywhere near realistic or achievable.
In fact, the data suggest the opposite – that, absent major structural interventions or a radical change in the direction of economic policymaking, the UK’s elusive quest for growth is likely to prove the continuing unsuccessful pursuit of a chimera.
Britain has experienced a clear and significant decline in economic growth since the 1970s. During that decade, as well as the 1980s, average annualized GDP growth per capita was around 2.5%. In the 1990s it fell to around 1.8% and in the 2000s it was just 1.1%. The 2010s saw a slight uptick to 1.3%, primarily due to the recovery from the 2007-2009 Great Financial Crisis in the early years of that decade, but still well below averages from the 1950s through the 1980s. From 2015 to 2024, average growth was just 0.8% per capita.
Relying upon increased economic growth for improved economic and social outcomes, on Britain’s current trajectory, is a policy illusion – a persistence of the fallacy of “trickle-down” neoliberal economics, for all the disclaimers from politicians to the contrary. Half a century of experience points in the other direction. With the exception of the 2010s, Britain’s economic growth has been lower than the preceding decade for every decade since the 1970s.
Chart 1: GDP Growth
Source:
Office for National Statistics. Gross Domestic Product: Chained Volume Measures, Seasonally Adjusted (£m). Series ID: ABMI. Accessed 26 December 2025. Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/ukea.
Office for National Statistics. Estimates of the population for the UK, England, Wales, Scotland and Northern Ireland. Published 26 September 2025. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/datasets/populationestimatesforukenglandandwalesscotlandandnorthernireland.
1.2 Income and Productivity
In 1973, mean real weekly household income BHC (before housing costs) was around ₤591.[22] By 2023, this had risen to around ₤818 – a 38% rise in 50 years (and an average of 0.4% a year). At the same time, real output per worker before housing costs (i.e. productivity) increased 92% over this period, an average of 1.6% per year.
In other words, over the last 50 years incomes have not kept pace with worker productivity. Even as the productivity of workers and the economy increases, workers no longer receive an equivalent increase in their pay packets. As is also the case in the United States, most of the gains from increased productivity are not passed on to workers in Britain but instead accrue to the top, to asset holders and the owners of capital.
Furthermore, incomes have stagnated since the dawn of the twenty-first century. In 2000, mean real weekly household income (before housing costs) was ₤849. In 2023, it was down to ₤817 (a drop of 3.7%). Real wages have not improved over where they were at the turn of the millennium – in other words, most workers have not received a real-terms pay increase in a quarter of a century, the longest period of wage stagnation since the Napoleonic Wars.
At the same time, productivity has continued to increase, rising by 17.25%. This suggests an accelerated decoupling of income and productivity in recent decades. Under any continuation of current economic arrangements, future increases in productivity in the UK economy will most likely not for the most part accrue to wages.
Chart 2: Income (Before Housing Costs)
Source:
UK Data Service. Family Expenditure Survey (1961–1993) and Family Resources Survey (1994/95–2023/24). Analysis by Howard Reed.
Chart 3: Productivity
Source:
Office for National Statistics. Labour productivity time series. Published 13 November 2025. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/datasets/labourproductivity.
Chart 4: Before Housing Costs, Household Incomes at Percentile Points
Source:
UK Data Service. Family Expenditure Survey (1961–1993) and Family Resources Survey (1994/95–2023/24). Analysis by Howard Reed.
Chart 5: After Housing Costs, Household Income at Percentile Points
Source:
UK Data Service. Family Expenditure Survey (1961–1993) and Family Resources Survey (1994/95–2023/24). Analysis by Howard Reed.
1.3 Poverty
Poverty in Britain fell considerably after the Second World War – due, at least in part, to transfer policies and a major governmental focus on improving economic and social welfare through the creation of the postwar welfare state.[23]
For a time, significant progress was made in tackling the “Five Giants” of the famous Beveridge Report: want, ignorance, disease, idleness, and squalor. Absolute destitution was significantly reduced in this period.
By 1970, for instance, the percentage of all Britons living in poverty (after housing costs) was down to 13.8%.[24] For children it was 13.7%, and for working-age adults it was 7.6%.
Starting in the late 1970s, poverty rates began to spike considerably and have remained at elevated levels ever since. In 2023, 21.1% of all Britons lived in poverty (a 52.9% increase from 1970). For children, the rate was 30.5% (a 122.6% increase) and for working-age adults it was 19.3% (a 153.9% increase).
One area that has seen some improvement since the 1970s concerns the number of pensioners living in poverty (a drop of 58.4%). However, this may be at least partially attributable to a large increase in the number of pensioners having (or choosing) to work past the official retirement age.
Chart 6: Poverty Rate
Source:
Institute for Fiscal Studies. Living standards, poverty and inequality in the UK. Available at: https://ifs.org.uk/living-standards-poverty-and-inequality-uk.
Chart 7: Child Poverty
Source:
Institute for Fiscal Studies. Living standards, poverty and inequality in the UK. Available at: https://ifs.org.uk/living-standards-poverty-and-inequality-uk.
Chart 8: Working-Age Poverty
Source:
Institute for Fiscal Studies. Living standards, poverty and inequality in the UK. Available at: https://ifs.org.uk/living-standards-poverty-and-inequality-uk.
Chart 9: Pensioner Employment
Source:
Office for National Statistics. Labour Market Statistics: Current Dataset. Office for National Statistics, 2025. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/labourmarketstatistics/current.
1.4 Public Debt
Like growth, public debt is often taken as a significant barometer of national economic health in Britain – especially by international institutions and investors. It also guides economic and social decision-making, and the current Labour government has committed to a series of fiscal “rules,” including a lowering of public debt.[25]
“We should be cautious in adopting public debt as a true indicator of economic health. In our view, public spending and public debt are not inherently problematic.”
We should be cautious in adopting public debt as a true indicator of economic health.
In our view, public spending and public debt are not inherently problematic – although this is fiercely contested across the political spectrum, and is certainly not the view that pertains at the centre of the present economic orthodoxy in HM Treasury and the City of London.
Other considerations are often conflated with the issue of public debt, such as the effects of the tax burden and of whether there is value for money in public services.
There is a genuine political issue around the question of the – accurate – perception that Britons are not recipients of the benefits of high-quality public services commensurate with their present tax burden – a political struggle that goes back to the origins of the modern state and accompanying efforts to limit the tax-raising powers of absolutist monarchs by merchant classes via fiscally sovereign parliaments. This was the context in which the Bank of England was originally created under William III in 1694, and there has been a continuous public debt in the modern sense ever since.[26]
Public debt, as Barry Eichengreen and his co-authors point out in their book In Defense of Public Debt, has historically had vitally important uses, including the ability of governments to finance emergency responses to wars and pandemics or to lay the foundations of essential public goods and services such as health, education, and transport.[27]
But there is also the matter of the servicing of that debt. In a low-growth environment such as Britain has experienced for the last several decades, debt repayments are understood as constraining other spending and investment not just politically (i.e. the fiscal rules) but also economically.
As a feature of current institutional arrangements, and in the absence of widespread public comprehension of the existence of alternative monetary arrangements such as direct monetary financing, the public debt is widely perceived to be an insupportable burden.
Alternative approaches to macroeconomic management are precluded politically by the persistence of orthodox economic doctrine and media recourse to the “household analogy” in public finances – the mistaken belief that taxes “pay for” public spending, and that “the books must balance” for the economy as a whole as for any given household or business within it. [28]
In fact, it has been clearly established in a step-by-step walk-through of everyday UK monetary operations that the government first spends into the economy and only later taxes back or issues debt: “public expenditure is always financed through money creation rather than taxation or debt issuance.”[29]
That said, we are unlikely to see a revolution in public understanding of macroeconomic management in the near term, and therefore the public debt currently operates as a continuing political constraint on UK economic policy options, including social spending.
Currently, Britain is projected to spend ₤111.2 billion in interest payments on its public debt in 2025-26 (8.3% of total public spending and over 3.7% of GDP).[30]
Public sector net debt (as a percentage of GDP) fell dramatically in the postwar period, and stood at 54.7% in 1970-71. It subsequently fell even lower, hitting 21.6% in 1990-91, before increasing dramatically in the past two decades to its current level of around 94%. This increase has been fueled by a combination of increased borrowing, low growth, and – more recently – the return of high interest rates in the period since the COVID-19 pandemic and Ukraine War energy price shock.
Although UK national debt has been much higher (as a share of national product) in earlier periods, such as the Napoleonic Wars and the periods following the two World Wars, at present levels it is high by peacetime historical standards.
Chart 10: Public Debt
Source:
Office for Budget Responsibility. Public finances databank 2025–26. Published 21 August 2025. Available at: https://obr.uk/public-finances-databank-2025-26/.
Chart 11: Tax Receipts and Public Spending
Source:
Office for Budget Responsibility. Public finances databank 2025–26. Published 21 August 2025. Available at: https://obr.uk/public-finances-databank-2025-26/.
1.5 Housing costs
“A major component of the present cost-of-living crisis is also a steady increase in the cost of housing over the past 50 years.”
As will be further discussed in Appendix A below, Britain is often described as being in the midst of a severe “cost-of-living crisis.”[31] While this is at least partially attributable to recent increases in product and commodity inflation, a major component of the present cost-of-living crisis is also a steady increase in the cost of housing over the past 50 years.
Housing is a major element in the story of Britain’s descent into systemic crisis.
As the Common Sense Policy Group argue in their recent manifesto Act Now: A Vision for a Better Future and a New Social Contract, the housing sector in Britain features “gross regional inequalities in housing costs, falling levels of ownership and high levels of homelessness,” and that this is at least in part due to an extractive and financialised house-building industry “failing to meet the need for sustainability and affordability.”[32]
“Sooner or later,” as Josh Ryan-Collins, Toby Lloyd, and Laurie Macfarlane warn in their book Rethinking the Economics of Land and Housing, “either a crash in property values will reset the market or housing market failure will weigh down ever more heavily on the economy, until the growing frustration of those paying ever larger proportions of their wages in rents triggers a political crisis, with unpredictable consequences.”[33]
The rise in unaffordability of housing is clear in the time series data.
In 1970, social renters paid around 8.7% of their income on housing; private renters paid around 9.4%; and homeowners paid around 5.9%. These percentages slowly climbed through the 1970s before exploding in the 1980s and early 1990s and then somewhat stabilizing at higher levels. In 2023, social renters paid around 23.6% of their income on housing (a 171.2% rise since 1970); private renters paid around 28.1% (a 198.9% rise); and homeowners paid around 9.9% (a 67.8% rise).
In housing, as with the economy as a whole, these patterns are unlikely to shift significantly without major structural change in the housing market – in this instance through interventions capable of “wrest[ing] our cities back from the hands of the rentier, landlord and speculator.”[34]
Chart 12: Housing Costs
Source:
UK Data Service. Family Expenditure Survey (1961–1993) and Family Resources Survey (1994/95–2023/24). Analysis by Howard Reed
1.6 Union Membership
Research shows that union membership is associated with higher wages and reduced income, racial, and gender inequality.[35]
Trade unions are a principal means by which labour exercises its bargaining power with capital owners, and stronger unions are better positioned to extract greater compensation and other concessions from employers.
Higher trade union density also has a demonstrably positive effect on a range of social and civic outcomes, which can be transmitted through political and policy and even cultural as well as through economic and employment channels.[36]
Conversely, falling trade union density means weaker bargaining power, and therefore corresponds to deteriorating wages and conditions. The reduction in the power of the “countervailing force” that trade unions allow labour to exert in a system otherwise dominated by capital is likely one of the core explanations for the deteriorating conditions affecting a majority of Britons in recent decades.
In Britain, union membership reached a peak of around 13 million workers in the late 1970s. In subsequent decades, union membership rapidly declined, hitting a current low of around 6.1 million workers in 2024. As a percentage of the labor force, union membership has fallen from 38.6% in 1989 (the first year comparable records are available) to just 21.5% in 2024, a reduction of 17.1 percentage points.
Chart 13: Union Membership
Source:
Department for Business and Trade. Trade union statistics 2024. Published 22 May 2025. Available at: https://www.gov.uk/government/statistics/trade-union-statistics-2024.
Chart 14: Trade Union Density
Source:
Department for Business and Trade. Trade union statistics 2024. Published 22 May 2025. Available at: https://www.gov.uk/government/statistics/trade-union-statistics-2024.
1.7 Public and Private Investment
Long-term underinvestment is a chronic feature of Britain’s ailing economy, deteriorating outcomes, and poor prospective outlook.
The high growth rates of the postwar period in Britain were at least in part driven by sustained public investment in the economy, housing, and public and social services. In the 1950s and 1960s, gross public investment was never less than around 7% of GDP, peaking at 11.4% in 1967/68. After 1975/76, gross public investment declined rapidly, reaching 2.7% of GDP in 1996/97. There was a limited recovery in the 2000s, but gross investment has not passed the 6% mark since the mid-1980s. In 2024-25, gross public investment stood at just 4.9%.
Private sector investment has not made up for this decline.
Overall, total public and private sector investment in Britain (measured by Gross Fixed Capital Formation) has declined since the 1970s. After hitting a peak of 26.4% of GDP in 1976, it subsequently fell and then rebounded during the 1980s, before dropping precipitously in the 1990s and then stabilizing. In 2024, total public and private investment amounted to around 17.4% of GDP, a 34.1% decline from 1976.
Chart 15: Investment
Source:
Office for Budget Responsibility. Public finances databank 2025–26. Published 21 August 2025. Available at: https://obr.uk/public-finances-databank-2025-26/.
1.8 Financial Extraction and Trade
Many of Britain’s economic challenges, including around investment, are at least partially connected to the international exposure of the UK economy through globalization and “free trade” – both of which are prominent features of the neoliberal economic model installed at home and abroad in the 1980s and 1990s.
As the birthplace of industrialisation, Britain had a first-mover advantage, and “free trade” has often been described as akin to the national religion, typified by the outlook of The Economist magazine and dating back to the Enlightenment thinking of classical economists such as Adam Smith and David Ricardo.
Whilst there is great debate about both the extent and effects of globalisation and free trade on the British economy, it is increasingly accepted that these have not been as universally positive as their supporters often contend.
The UK is usually considered to be relatively successful in attracting foreign direct investment (FDI), often appearing in the top twenty largest recipients of inward FDI globally. A lot of this, however, has not been greenfield investment but Merger & Acquisition activity (the vast majority) and intra-company loans, the latter including activity related to transfer pricing and other tax shenanigans, rather than bona fide productive investment.
Moreover, the UK has consistently become a net outward investor overall.
One key indicator is the imbalance of financial flows that amount to growing financial extraction by overseas owners of the British economy, which is itself connected to the country’s balance of trade with the rest of the world.
In the 1950s and 60s, Gross National Income (GNI) was generally greater than Gross Domestic Product (GDP), meaning that income was flowing into the country from overseas. However, in the mid-1970s this direction reversed and the volume of financial outflows has been volatile, but growing, ever since. In other words, an increasing amount of income is flowing out of Britain, rather than into it.
This corresponds with Britain’s trade balance, which has been mostly negative (more imports than exports) since the mid-1980s. Overall, Britain’s balance of payments for goods and services has been in deficit since 1984. Prior to that, it fluctuated but was often positive. Between 1946 and 1983, the average balance was 0.3% of GDP. From 1984 to 2024, the average balance was -2.2%.
Chart 16: Financial Extraction
Source:
Office for National Statistics. United Kingdom National Accounts: The Blue Book 2024. Published 31 October 2024. Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp/compendium/unitedkingdomnationalaccountsthebluebook/2024.
Chart 17: Composition of Balance of Current Accounts
Source:
Office for National Statistics. United Kingdom Balance of Payments: The Pink Book 2024. Published 31 October 2024. Available at: https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/unitedkingdombalanceofpaymentsthepinkbook/2024.
1.9 Financialisation
The reversal of Britain’s trade balance reflects a larger shift in its economic orientation from manufacturing to services – and, in particular, financial services.
In 1960, manufacturing accounted for 36% of Gross Value Added (GVA), with total production and construction accounting for 47.3%; Services accounted for 48.8%, with the FIRE sector (finance, insurance and real estate) accounting for 12.2%.
Since then, the British economy has basically flipped. In 2022, manufacturing was just 8.8% of GVA (down 27.2 percentage points from 1960), with total production and construction accounting for 18.7% (down 28.6 percentage points). Services accounted for fully 80.6% (up 31.8 percentage points), with the FIRE sector accounting for 39% (up 26.8 percentage points).
Importantly, the growth of the FIRE sector in terms of GVA has not been matched with a corresponding growth in employment. In 1978, the FIRE sector accounted for just under 4% of the workforce. By 2025 this had barely grown to 5.1%. By contrast, production sector employment fell dramatically from 28% to just 8%.
In other words, as will be discussed further in section 2 of this Index, the seismic shifts in the orientation of the British economy over the past several decades have primarily benefited capital rather than labour.
Since 1995, growth in the value of financial assets and real estate has far outpaced both GDP and weekly earnings, indicating continued decoupling of the “productive” and “speculative” economies.
“Far from boosting productivity and increasing efficiency in the non-financial economy, the growth of the financial sector functions as a subtraction from the real economy, as financial flows are diverted to unproductive uses and the resulting revenue flows benefit a minority.”
There is a growing gap between the headline performance of the economy as seen in the London Stock Exchange and what more and more people report as their own economic position and the financial stresses and worries which they carry.
The vast wealth of the UK economy is not being experienced as such by most people. GDP may increase, the stock market may rise, but for many there is only the growing squeeze on incomes and the accumulating debt burden.
Part of the explanation for this gap is the hidden economic process of financialisation, by which financial flows are diverted away from production and consumption toward asset markets in the pursuit of capital gains.
Financialisation is not yet widely enough understood, even as it becomes the increasingly damaging force behind the extractive economy and its consequences for workers, society, and the natural world.
Financialisation is a complex phenomenon, but has enormous explanatory power as to the causes of Britain’s highly unequal and dysfunctional economy of growing poverty in the midst of plenty.
Far from boosting productivity and increasing efficiency in the non-financial economy, the growth of the financial sector functions as a subtraction from the real economy, as financial flows are diverted to unproductive uses and the resulting revenue flows benefit a minority.
As financialisation gathers pace, rising wealth and debt detract from income for the majority.[37] In such an economy, what is counted as growth matters a great deal. Every financial asset is at one and the same time someone else’s financial liability – and as the holdings of the financial sector have increased, so too has the debt held by households and businesses in the non-financial economy.
This dynamic goes by the name of assetisation, which is “the creation of assets and liabilities out of future economic activity.”
As Dirk Bezemer, Michael Hudson and Howard Reed describe assetisation in a paper produced for The Democracy Collaborative:
“Students’ future incomes are capitalised into student loans, households’ into mortgages. Future mobility is capitalised into car loans, future pensions into pension assets, future profits into equity. Each of these assets is held as a liability by the issuer, who must service it out of their incomes, both wages and profit, by paying interest, dividends, contributions to pensions and social security. This extraction constitutes ‘savings’ in the sense of non-consumed income. But… these ‘savings’ are not necessarily supporting production. They are payments for debts and to gain access to utilities, education, infrastructure and other necessities that have been turned into assets requiring a return. Basic necessities are redefined as assets, whose price is inflated by the liquidity poured into asset markets. This is the new ‘circular flow’ logic of the capital gains economy.”[38]
The result, our economists point out, is “lower disposable incomes, even before taxes. For instance, rents increase when house prices rise. Water utilities are turned into privately traded assets; then the fees are increased to pay for the increased asset costs. Firms are acquired on debt; then disposable wages fall, after servicing the new debt liabilities. As income growth declines to generate capital gains to asset owners, this adds to the attractions of holding assets. Increasingly, income inequality comes to be defined by the dichotomy between the haves in asset markets, who reap capital income and capital gains, and the have nots, who service the liabilities that make capital income and capital gains possible.” [39]
This process of financialisation in pursuit of capital gains helps explain the squeeze-play of recent years, whereby nominal economic growth has in reality been experienced as reduced income through increased extraction and indebtedness.
The data show the powerful development of financialisation in the UK.
Between 1995 and 2020, nominal wages doubled, nominal UK GDP rose two and a half times, while average house prices quintupled and the valuation of financial assets rose four and a half times.
The benefits of Britain’s “capital gains economy” are revealed as flowing primarily to asset-owners and the already wealthy, while for the rest of us there are lower earnings from work, lower income growth in the non-financial sector, lower productivity, and less innovation – all alongside sizable increases in debt and (conversely – as every debtor has a creditor) in financial and real estate wealth.
The financial sector is extractive from the real economy.
Given that all income groups are paying ever more into the finance sector in fees and interest charges and for underlying assets while the payouts from the sector are even more concentrated than those of the economy as a whole, the finance sector has also become the locus of the production of increased inequality in the UK economy.
Chart 18: Manufacturing and Services (GVA Share)
Source:
Bank of England. A Millennium of Macroeconomic Data for the UK. Version 3.1, updated to 2016. Available at: https://www.bankofengland.co.uk/-/media/boe/files/statistics/research-datasets/a-millennium-of-macroeconomic-data-for-the-uk.xlsx
Office for National Statistics. United Kingdom National Accounts: The Blue Book 2024. Published 31 October 2024. Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp/compendium/unitedkingdomnationalaccountsthebluebook/2024.
Chart 19: Sectoral Composition of GVA
Source:
Bank of England. A Millennium of Macroeconomic Data for the UK. Version 3.1, updated to 2016. Available at: https://www.bankofengland.co.uk/-/media/boe/files/statistics/research-datasets/a-millennium-of-macroeconomic-data-for-the-uk.xlsx
Office for National Statistics. United Kingdom National Accounts: The Blue Book 2024. Published 31 October 2024. Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp/compendium/unitedkingdomnationalaccountsthebluebook/2024.
Chart 20: Sectoral Composition of the Workforce
Source:
Office for National Statistics. JOBS02: Workforce jobs by industry, 16 December 2025.
Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/workforcejobsbyindustryjobs02.
Chart 21: Financialization Overview (Since 1995)
Financialization Overview (Since 1995)
index 1995 = 100
Source:
Office for National Statistics. Earnings time series of median gross weekly earnings from 1968 to 2022. Published 2025. 2025. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/earningstimeseriesofmediangrossweeklyearningsfrom1968to2022; Office for Budget Responsibility. Public finances databank 2025–26. Published 2025. https://obr.uk/public-finances-databank-2025-26/; HM Land Registry. UK House Price Index (Browse Tool). Available at: https://landregistry.data.gov.uk/app/ukhpi/browse.
Section 2. For the Few, Not the Many
The longevity of the neoliberal economic model over the past several decades, as well as continued support for it, can be partially explained by the existence of a veneer of prosperity that obscures some of the weaker or deteriorating underlying trends.
In other words, the model often works for a small subset of the population who are able to grow their wealth and power. Then, through cultural and political reinforcement, these examples are offered as “proof” that the economy is delivering positive economic results.
However, investigating trends in inequality over time exposes this myth and demonstrates that the British economy is increasingly working only for an increasingly small fraction of the population. As financial extraction grows and the capital gains economy becomes the basis of accumulation, the squeeze on wages and living standards intensifies. Politicians insist that not much can be done about this in the short term because – in the constant refrain of austerity economics on both front benches – “the money isn’t there.”[40]
This is a political fiction.
The United Kingdom is the sixth largest economy in the world. By any measure, it is one of the richest societies in human history. But nowhere does it appear this way except in the precincts of the very wealthiest, for whom the system is delivering vast material gains and great financial prosperity.
“Despite the dire state of the country, the problem is not a shortage of resources, but rather that plentiful resources are hoarded at the top.”
That Britain does not feel affluent is a result of the extremes of growing inequality and the diversion of wealth and productive capacity away from public goods and services to elite private accumulation and consumption. The story is one of concentrated private affluence amidst widespread and growing public squalor.
Despite the dire state of the country, the problem is not a shortage of resources, but rather that plentiful resources are hoarded at the top.
By way of comparison, in 1945 the postwar Labour government inherited a war-shattered economy laden with debt and had to literally rebuild amidst the ruins. But they managed to create the NHS, nationalised a fifth of the economy, and established the welfare state and the postwar settlement – a truly transformative programme that reshaped the political economy for decades to come.[41] In real terms, Britain’s GDP in 1945 was £383 billion, compared to around £2.3 trillion today; we are more than five times richer in real terms than Attlee’s Britain.
But it’s even better than that. Britain today is not only richer than Attlee’s Britain, but is also richer in real terms than Harry Truman’s United States – the colossus that bestrode the globe and helped reconstruct war-torn Europe and Japan through the Marshall Plan. America’s GDP in 1945 was equivalent to £1.95 trillion today.
The story that Britain lacks the resources to tackle child poverty or to invest in public services or to drive the green transition or rebuild the depleted public realm is exactly that – a story. There is greater wealth in Britain today than was available to the U.S. superpower constructing the postwar international order.
There is just a political unwillingness to shift the resources of a rich system from private accumulation to public need.
2.1 Income Inequality
Historically, Britain had high levels of income and wealth inequality due at least in part to the existence of a monarchy and landed aristocracy and the continual passing down of inherited fortunes.
From around 1914 onwards, income inequality began to fall – a process accelerated by the Depression era, the Second World War, and the post-war social democratic period which saw the construction of the modern welfare state. In 1978, income inequality hit its lowest point before rising considerably in the 1980s. Since then, there have been further (uneven) increases in income inequality. In 2023, the Gini coefficient (after housing costs) was 0.387, up more than 56% from 1978.
Furthermore, the rise in income inequality since the 1980s has been driven mostly by the top 1% of earners. In 1978, the ratio of the 99th percentile (top 1% of earners) of net income (after housing) to the 10th percentile (bottom 10% of earners) was 5.6; by 2023 it had risen to 15.56 (a 177.8% increase). By comparison, for the 90th percentile (top 10% of earners) the rise was 71.7%; and for the 50th percentile (top 50% of earners) the rise was 42.4%.
Chart 22: Income Inequality
Source:
Institute for Fiscal Studies. Living standards, poverty and inequality in the UK. Available at: https://ifs.org.uk/living-standards-poverty-and-inequality-uk.
Income Inequality
Gini coefficient
Chart 23: Income Ratios (After Housing)
Source:
Institute for Fiscal Studies. Living standards, poverty and inequality in the UK. Available at: https://ifs.org.uk/living-standards-poverty-and-inequality-uk.
Chart 24: Income Ratios (Before Housing)
Source:
Institute for Fiscal Studies. Living standards, poverty and inequality in the UK. Available at: https://ifs.org.uk/living-standards-poverty-and-inequality-uk.
Chart 25: Income Inequality (Cross Country Comparison)
Source:
OECD. Income distribution database. Available at: https://data-explorer.oecd.org/. Data for Denmark, Colombia, and Iceland from: World Bank. Indicators: Gini Index. Available at: https://data.worldbank.org/indicator/SI.POV.GINI.
2.2 Wealth Inequality
As with income, Britain began the twentieth century with high levels of wealth inequality.
In tandem with income inequality, this fell consistently until the mid-to-late 1980s, before dramatically reversing. Also as with incomes, the increase in wealth inequality is being disproportionately driven by the richest segment of society. In 1984, the top 1% of adults owned 15.2% of total net personal wealth; by 2022 this had increased to 21.1% (a 38.8% increase). Similarly, in 1984 the top 10% of adults owned 46.7% of total net personal wealth; by 2022 this had increased to 57% (a 22% increase).
Further evidence of this can be discerned by analyzing the changes in household wealth for various wealth groups since 2008.
There is an extraordinary acceleration of the increase of the net worth of the ultra-wealthy at the very top of the distribution, the richest 20 families in Britain, who are pulling away even from the rest of the financial elite, an oligarchic pattern of accumulation and wealth-holding similar to that observed in the United States. Between 2009 and 2024, the total wealth of the richest 20 families in Britain grew from £66.5bn to £303.0 bn – an increase of 355%. Whereas at the median, real household wealth only grew by around 7% and at the top 10% it grew by 20%. At the bottom 10% of households, real wealth growth was zero; at the bottom 25% it was minus 10%.
In other words, a handful of the wealthiest families are not only pulling away from the average household but also outpacing those who are otherwise at the very top of the general distribution at an accelerating rate.
Chart 26: Wealth Inequality
Source:
World Inequality Database. United Kingdom. Available at: https://wid.world/country/united-kingdom/.
Chart 27: Wealth Inequality Since 2008
Source:
Office for National Statistics. Wealth and Assets Survey QMI. Last revised 24 January 2025. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/debt/methodologies/wealthandassetssurveyqmi; The Sunday Times. Rich list (20 wealthiest households), 2009, 2014, 2019, 2024 and 2025. Available at: https://www.thetimes.com/sunday-times-rich-list.
Chart 28: Wealth Inequality 1895-2022
Source:
World Inequality Database. United Kingdom. Available at: https://wid.world/country/united-kingdom/.
2.3 Shares of Labour and Capital
Since the 1970s, Britain has undergone a profound shift in who benefits from economic growth and productivity.
In the post-Second World War period, the labour share of national income – the portion going to wages and salaries – was usually around 55-60%, while the capital share – profits, rents, and returns to wealth – was in the 20-25% range.
After 1975, however, the labour share fell, while the capital share rose sharply. In 2023, the Labour share of national income was around 48%, while the capital share was 35%.
In other words, in the British economy of today, significantly more of the “national pie” goes to the small minority who are owners and holders of wealth than to the vast majority who perform the work.
The shift to a capital gains economy is part of the explanation for why the vast wealth of the economy is not being experienced as such by many if not most Britons. GDP may increase, the stock market may rise, but for many there is only the growing squeeze on incomes and the accumulating debt burden.
Chart 29: Factor Shares (Labour and Capital)
Source:
Office for National Statistics. United Kingdom National Accounts: The Blue Book 2024. Published 31 October 2024. Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp/compendium/unitedkingdomnationalaccountsthebluebook/2024.
2.4 Housing Inequality
Homeownership in Britain is something of an economic paradox.
House-building was a major component of the postwar welfare state, with the widespread construction of more than 800,000 council homes as part of a new era of public housing inaugurated under the 1945-51 Labour government.[42]
Similarly, but in reverse, ‘Right to Buy’ – the Thatcher-era policy that allowed council tenants to buy their houses at a steep discount of up to 50% – was the largest of all the Tory privatisations, amounting to a vast one-time transfer of wealth to a single cohort of renters: some 2.5 million council homes were sold after 1980, for a total value of £86 billion, more than all the other public sell-offs combined, thereby helping generate the UK housing boom and feeding the property credit bubble.[43]
On the one hand, rising house prices over the past several decades have made homeownership an important vehicle for family wealth building and accumulation for those able to participate, with the ‘wealth effect’ of home equity offsetting some of the ongoing stagnation of incomes.
On the other, these same rising house prices have made this wealth building vehicle inaccessible for a growing number of families, thus exacerbating and entrenching economic inequality.
In 1970, the real average home price in Britain was ₤77,986 (in 2024 pounds); In 2024, it was ₤261,403 – an increase of 235.2%. This massive rise in prices has put homeownership out of the reach of many families, especially given the income stagnation that has occurred over the same period. In 1970, the average home cost a little under 2.5 times the average annual male earnings. By 2024, this had increased to just under 5.5 times the average annual male earnings, a doubling of relative cost.
When looking at housing costs in general (both ownership and renting), a similar picture emerges. In 1970, housing costs as a percentage of income for the bottom 10% of earners was 16.6%. For the top 25% of earners, it was 5.9% (a difference of 10.7 percentage points) and for the top 10% of earners, it was 4.7% (a difference of 11.9 percentage points). By 2023, it had risen to 29.4% for the bottom 10%; 9.8% for the top 25% (a difference of 19.6 percentage points); and 7.7% for the top 10% (a difference of 21.7 percentage points).
Chart 30: Average House Prices
Source:
HM Land Registry. UK House Price Index (Browse Tool). Available at: https://landregistry.data.gov.uk/app/ukhpi/browse.
Chart 31: Average House Prices Compared to Average Male Earnings
Source:
HM Land Registry. UK House Price Index (Browse Tool). Available at: https://landregistry.data.gov.uk/app/ukhpi/browse. Earnings: Office for National Statistics. Earnings time series of mean gross weekly earnings from 1938 to 2025. Published 23 October 2025. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/earningstimeseriesofmeangrossweeklyearningsfrom1938to2022. Extended to 2024 by using: Office for National Statistics. Annual Survey of Hours and Earnings time series of selected estimates. Published 23 October 2025. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/ashe1997to2015selectedestimates
Chart 32: Housing Costs at Income Percentiles
Source:
UK Data Service. Family Expenditure Survey (1961–1993) and Family Resources Survey (1994/95–2023/24). Analysis by Howard Reed.
2.5 Racial & Ethnic Inequality
Racial and ethnic inequality and inequity are deeply engrained in UK society.
In a 2020 report investigating more than 30 years of papers, commissions, and recommendations, the Stuart Hall Foundation (SHF) noted that “for more than fifty years, successive British governments have tried to tackle the enduring nature of racism and the consequences of structural racial inequality through legislative interventions. However, in 2020, racism and racial inequality persist.”[44]
In some areas, racial and ethnic inequality has improved in recent decades. But in others, there has been little progress. Moreover, in areas where there has been improvement, the trend has been one of shifting from extreme inequality to just moderate inequality.
For instance, in the summer of 2001 the employment gap between the white ethnic group and the Pakistani ethnic group was 29.9 percentage points; by 2025, the gap had dramatically shrunk, but there remained a large 15.8 percentage point difference.
Homeownership is one area where there has been little improvement in racial and ethnic inequality. In the early 1990s, whites and Asians had roughly the same levels of homeownership, while Blacks trailed significantly behind. While the rate for whites remained relatively consistent between 1994 and 2023 (rising 1.6 percentage points), for Asians it fell by 21.7 percentage points; and for Blacks it fell 4.7 percentage points. In 1994, the homeownership gap between whites and Blacks was 32.4 percentage points; by 2023 this had increased to 38.7 percentage points.
Chart 33: Employment Rate by Race and Ethnicity
Source:
Office for National Statistics. A09: Labour market status by ethnic group. Published 11 November 2025. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/labourmarketstatusbyethnicgroupa09
Chart 34: Homeownership Rate by Race and Ethnicity
Source:
UK Data Service. Family Resources Survey (1994/95–2023/24). Analysis by Howard Reed.
2.6 Gender Inequality
As with racial inequality, there have been certain improvements in gender inequality over the past several decades.
However, there remain stark differences in economic and social outcomes between men and women.[45] For instance, the mean gender wage gap – which measures the difference in average male earnings versus female earnings – was 35% in the late 1990s. It has subsequently fallen, but still remains at 15%.
Similarly, intimate partner violence (a.k.a. domestic violence) – which disproportionately affects women – has fallen over the past two decades.
However, Britain still has one of the highest rates of intimate partner violence in the Global North, ranking above both the OECD and European Union average.
Chart 35: Gender Wage Gap
Source:
Office for National Statistics. Annual Survey of Hours and Earnings: time series of selected estimates, 1997–2015. Published 23 October 2025. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/ashe1997to2015selectedestimates.
Chart 36: Intimate Partner Violence
Source:
Office for National Statistics. Crime in England and Wales: year ending March 2025. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/bulletins/crimeinenglandandwales/yearendingmarch2025#domestic-abuse.
Chart 37: Intimate Partner Violence (Cross Country Comparison)
Source:
OECD Data Explorer. Gender, institutions and development database (GID-DB) 2023. Available at: https://data-explorer.oecd.org/.
insert 2.7
Chart 38: Real Household Incomes by Region and Country
Source:
Family Expenditure Survey (1961-1993), Family Resources Survey (1994/95 to 2023/24). Author's own analysis
Chart 39: Regional Inequality (UK vs. USA)
Source:
Organisation for Economic Cooperation and Development (OECD). OECD Data Explorer: Gross Domestic Product - Regions. OECD, n.d. Available at: https://data-explorer.oecd.org/.
Chart 40: Regional Inequality (UK vs. Germany, Netherlands, and Sweden)
Regional GDP Per Capita (UK vs. Germany, Netherlands, and Sweden)
Source:
Organisation for Economic Cooperation and Development (OECD). OECD Data Explorer: Gross Domestic Product - Regions. OECD, n.d. Available at: https://data-explorer.oecd.org/.
Section 3: Health and Welfare
Following the Second World War, Britain created a relatively strong social safety net, comprised of health care, housing, National Insurance (including pensions and unemployment insurance), child benefits, and other social programs. The jewel in the crown of this system was the National Health Service (NHS), which provided universal, free health care at the point of need and site of care.
As a result of these programs, health and wellness outcomes – including life expectancy – improved considerably throughout the second half of the twentieth century.
For a time, the NHS demonstrated among the best health outcomes of any health system anywhere in the world. However, creeping privatisation, underinvestment, and chronic neglect of the NHS, and of other welfare systems, in recent decades is threatening to undermine many of these gains and further erode social outcomes, especially compared with other advanced countries.
The current UK economy creates ill health. Life expectancy and maternal mortality rates are deteriorating whilst overall health outcomes are worsening and infant mortality remains stubbornly high. Even in economically prosperous countries with advanced healthcare systems, health problems remain persistent because the conditions for health and wellbeing are not available to all.
To address this, it is shortsighted and expensive to focus solely on treatment of the effects of ill health, when instead we can and must dig deeper into the social and economic determinants that cause poor health in the first place, and pursue an agenda of ‘upstream’ preventative considerations of health as opposed to purely ‘downstream’ cures – when problems of ill health are likely to be more acute, critical, and expensive for both individuals and the state.[48]
The economy is a key determinant in our lives, our health, the type of life we live and how long we can enjoy it. To live long and healthy lives, we must create an economic system that promotes wellness rather than illness, and thus address the key factors that cause ill health in the first place – especially inequalities in wealth and income and lack of control.
Societies can, to a large degree, be judged by how they treat their most vulnerable populations – especially children. Similarly, the value given to social labour and to the work of social reproduction is also telling as to the priorities of any system.
Women and children do not fare particularly well, to say the least, under the current system of political economy in the UK.
Climate change remains one of the most pressing planetary challenges, representing an increasingly existential threat to human civilisation and to the future of an organised global community. Without rapid climate mitigation and adaptation, future generations will inhabit a planet that is far different and far less hospitable than we do – with dire consequences for societal health and wellbeing.
3.1 NHS Performance
Once the envy of much of the advanced world, the NHS is in crisis.
The waiting list for service has ballooned from 2.5 million in 2010 to nearly 8 million by late 2023. After modest improvements in the late 2000s, the 2010s ushered in a decade of austerity-driven stagnation during which waiting lists surged. Then came the COVID-19 shock, which pushed the system to its limits, triggering an unprecedented backlog. This was exacerbated by crumbling infrastructure that has been weakened by decades of inattention.
The result is a health service where the physical environment itself is becoming a barrier to care – unsafe, unsustainable, and unfit for purpose.
Chart 41: Size of NHS Elective Waiting List
Source:
Warner, M. and Zaranko, B., The past and future of NHS waiting lists in England.
London: Institute for Fiscal Studies, February 2024. ISBN 9781801031691.
Available at: https://ifs.org.uk/sites/default/files/2024-02/The-past-and-future-of-NHS-waiting-lists-in-England-IFS-report-R302.pdf.
3.2 Maternal Mortality
There are early signs that health outcomes in Britain may be starting to decline after decades of steady progress.
For instance, maternal mortality in England and Wales fell from a rate of 13.9 (per 100,000 maternity episodes) to 8.5 between 2003 and 2014.
However, since then it has risen again, reaching 12.6 in 2023. Moreover, Britain’s maternal mortality rate is relatively high among advanced economies, ranking 11th out of the 38 OECD member states.[49]
Chart 42: Maternal Mortality Rate (England and Wales)
Source:
MBRRACEUK (Mothers and Babies: Reducing Risk through Audits and Confidential Enquiries across the UK). Maternal mortality 2021–2023: Data Brief. National Perinatal Epidemiology Unit, September 2025. Available at: https://www.npeu.ox.ac.uk/mbrrace-uk/data-brief/maternal-mortality-2021-2023.
Chart 43: Maternal Mortality (Cross Country Comparison)
Source:
OECD Data Explorer. Maternal and infant mortality. Available at: https://data-explorer.oecd.org/.
3.3 Infant Mortality
Like the maternal mortality rate, the infant mortality rate fell between 2003 and 2014, continuing a long-term declining trend. Subsequently, the rate has been relatively stable at around 4 deaths per 100,000 live births.
However, this lack of improvement cannot be considered a positive outcome since Britain still has a relatively high infant mortality rate when compared with other OECD countries, ranking 10th out of 38.[50]
Chart 44: Infant Mortality Rate (England and Wales)
Source:
Office for National Statistics. Child and infant mortality in England and Wales: 2023. Published 22 April 2025. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/childhoodinfantandperinatalmortalityinenglandandwales/2023.
Chart 45: Infant Mortality (Cross Country Comparison)
Source:
OECD Data Explorer. Maternal and infant mortality. Available at: https://data-explorer.oecd.org/.
insert 3.4
Chart 46: Life Expectancy
Source:
Office for National Statistics. National life tables – life expectancy in the UK: 2022 to 2024. Published 10 December 2025. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2022to2024.
Chart 47: Life Expectancy (Cross Country Comparison)
Source:
OECD Data Explorer. Life expectancy. Available at: https://data-explorer.oecd.org/.
3.5 Suicide
While many factors contribute to suicide, mental health is often a primary component. As such, suicide rates are one way (among many others) to evaluate a country’s mental health outcomes.
Suicide rates for both men and women declined between the early 1980s and mid-2000s. However, the trend subsequently reversed and has been mostly rising for the past two decades. In 2024, England and Wales had a suicide rate of 11.4 per 100,000 people. This is up from a low of 9 in 2007, and equivalent to the rate in 1999.
Chart 48: Suicide Rate (England and Wales)
Source:
Office for National Statistics. Suicides in the United Kingdom: Reference Tables. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/datasets/suicidesintheunitedkingdomreferencetables.
3.6 NHS Spending
Spending on the NHS remained relatively stable for much of the post-war period, at around 3-4% of GDP.
This started to rise dramatically in the late 1990s, and by 2022 it was up to it was up to around 8.2% of GDP. While this recent rise is somewhat exacerbated by Britain’s weak economic growth in this period, real spending shows a 154% increase between 1999 and 2022. In other words, the NHS is spending more than ever but outcomes are not improving or are deteriorating.
This can be attributable to numerous factors, including inflation (especially for medical goods); an aging population; the role of large multinational corporations in the provision of drugs, medical equipment, and technology; the outsourcing of NHS services to private for-profit companies – which has been occurring since the 1980s and 1990s, but which accelerate significantly in 2012; and the use of Private Finance Initiatives (PFIs) to build and repair health care facilities.
However, another key factor is deferred investment, which is a product of the short-termism inherent in the neoliberal economic model.
The low spending rates of the 1970s to 1990s were, at least in part, sustained by putting off needed capital investments. By the early 2010s, the cost of clearing the infrastructure backlog stood at under £6 billion, mostly made up of low- and moderate-risk issues. However, instead of addressing the issue, capital budgets were slashed and ageing hospitals and clinics were left to deteriorate.
Now, the backlog is estimated to have more than doubled to over £12 billion. Crucially, the nature of the problem has shifted: high-risk and significant-risk failures – those that threaten patient safety, service continuity, and basic functionality – now make up more than half of the total. What was once a manageable maintenance challenge has become a systemic emergency, driven by political choices and chronic underinvestment over decades.
Chart 49: NHS Spending
Source:
IFS (2024) for long-run series; Office for National Statistics. Healthcare expenditure, UK Health Accounts: 2023 and 2024. Published 30 April 2025. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/bulletins/ukhealthaccounts/2023and2024.
Chart 50: Cost to Eradicate NHS Infrastructure Backlog
Source:
Stoye, G., Warner, M. and Zaranko, B., The past and future of UK health spending.
London: Institute for Fiscal Studies, May 2024. ISBN 9781801031806. Available at: https://ifs.org.uk/publications/past-and-future-uk-health-spending.
3.7 Value of Welfare Benefits
Alongside health care, pensions, unemployment insurance, and the child benefit allowance were key components of the post-war social democratic settlement; and all three played a part in the rising health and welfare outcomes of the period.
However, since the 1970s the value of all these welfare benefits has gradually eroded.
Between 1948 and 1972, the value of both the state pension and unemployment benefits rose 88.4% percent (an average of 3.5% a year).[52] After 1972, these two amounts were delinked.
Subsequently the real (after inflation) value of the state pension has largely stagnated, rising just 34.1% between 1973 and 2024 (an average of 0.65% per year); meanwhile the real value of unemployment benefits has fallen by 24.5% (an average of -0.47% per year).[53]
The value of the child benefit has also seen declines over the past several decades. These have been most pronounced for single parents. From 1980 to 2024, the real value of the child benefit for a single parent with two children has declined by 41.1% (an average of -0.91% per year). For couples, the value of the child benefit has also declined, falling 22.5% (an average of -0.5% per year).
Chart 51: Value of State Pension and Unemployment Insurance
Source:
Institute for Fiscal Studies. Fiscal facts.
Available at: https://ifs.org.uk/tools_and_resources/fiscal_facts.
Chart 52: Real Value of Child Benefit Allowance for Family with 2 Children (RPI Deflated)
Source:
Institute for Fiscal Studies. Fiscal facts.
Available at: https://ifs.org.uk/tools_and_resources/fiscal_facts.
insert 3.8
Chart 53: Prison Population
Source:
House of Commons Library. UK Prison Population Statistics. Research Briefing SN04334, 8 July 2024. Available at: https://commonslibrary.parliament.uk/research-briefings/sn04334/.
3.9 Climate Change
Climate change is a global challenge that will affect the health and wellbeing of people around the world, including in Britain.
Over the next decades, Britain is projected to face hotter summers (including more extreme heat events), wetter winters (including more flooding), and rising sea levels, among other effects.[57] These impacts will have significant economic, social, and political impacts.
On the surface, Britain appears to be a global leader in emissions reduction, with territorial greenhouse gas emissions falling by nearly 50% between 1990 and 2001. However, the country’s carbon footprint – which takes into account the goods and services consumed in Britain but produced elsewhere – tells a different story. Here, emissions have only fallen about 24% since 1990. This slower decline in footprint emissions is directly tied to Britain’s economic transformation from a manufacturing centre to a service-based, import-heavy economy.
In essence, Britain is operating a carbon colonialism model by which a significant portion of its pollution is shifted overseas while it takes accolades for its supposed progress in tackling climate change domestically.
Chart 54: Greenhouse Gas Emissions
Source:
Office for National Statistics. Greenhouse gas emissions and trade, UK: 2024. Available at: https://www.ons.gov.uk/economy/environmentalaccounts/articles/greenhousegasemissionsandtradeuk/2024.
Insert Addendum A and 4.1
Chart 55: Inflation (1930s-Present)
Source:
Office for National Statistics. Consumer Price Indices. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceindices.
4.2 Components of Inflation
Headline indicators like the Retail Price Index and Consumer Price Index only tell part of the inflation story. Looking at the components of inflation enables a more comprehensive understanding of the impact on consumers and residents.
For instance, between 2020 and 2025 the cost of housing, water, and fuels rose 39.8%, more than any other category of goods and services. Moreover, over the last 35 years (since 1990), costs in this category increased by 287% (an average of 8.2% a year). However, even this is dwarfed by the rising cost of education, which has increased 909% since 1990 (an average of around 26% a year).
Chart 56: Components of Inflation (2020-2025)
Source:
Office for National Statistics. Consumer Price Indices (current edition). Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceindices/current.
Chart 57: Components of Inflation (1990-2025)
Components of Inflation, 1990–2025 (CPI Index)
Source:
Office for National Statistics. Consumer Price Indices (current edition). Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceindices/current.
Insert Addendum B & 5.1
Chart 58: Attitudes Toward Taxation and Spending
Source:
NatCen Social Research. Key Time Series. NatCen Social Research, 2023. Available at: https://natcen.ac.uk/sites/default/files/2023-08/bsa37_key-time-series.pdf; UK Data Service. Series 200006. UK Data Service, n.d. Available at: https://datacatalogue.ukdataservice.ac.uk/series/series/200006.
Chart 59: Attitudes Toward Social Security (Welfare)
Source:
NatCen Social Research. Key Time Series. NatCen Social Research, 2023. Available at: https://natcen.ac.uk/sites/default/files/2023-08/bsa37_key-time-series.pdf; UK Data Service. Series 200006. UK Data Service, n.d. Available at: https://datacatalogue.ukdataservice.ac.uk/series/series/200006.
5.2 Attitudes Toward Migration
In 2019, 47% of Britons believed migration was good for the economy, while 15% thought it was bad. By 2024, 37% believed it was good (a drop of 10 percentage points), while 32% thought it was bad (a large rise of 17 percentage points).
Similarly, in 2019 46% of Britons believed that migration enriches British cultural life, while 19% felt it undermined it. By 2024, 38% of Britons believed migration enriched cultural life (a drop of 8 percentage points), while 31% felt it undermined it (a rise of 12 percentage points).
Chart 60: Attitudes Toward Migration (Economic)
Source:
NatCen Social Research. Key Time Series. NatCen Social Research, 2023. Available at: https://natcen.ac.uk/sites/default/files/2023-08/bsa37_key-time-series.pdf; UK Data Service. Series 200006. UK Data Service, n.d. Available at: https://datacatalogue.ukdataservice.ac.uk/series/series/200006.
Chart 61: Attitudes Toward Migration (Cultural)
Source:
NatCen Social Research. Key Time Series. NatCen Social Research, 2023. Available at: https://natcen.ac.uk/sites/default/files/2023-08/bsa37_key-time-series.pdf; UK Data Service. Series 200006. UK Data Service, n.d. Available at: https://datacatalogue.ukdataservice.ac.uk/series/series/200006.
5.3 Trust in Government
Over the last several decades, the British people have increasingly lost trust and confidence in the government and in the political system.
In 1986, 40% of people surveyed trusted the government “just about always” or “most of the time”; by the second quarter of 2024, this was down to just 12% (a drop of 28 percentage points). Moreover, trust has halved since 2021, when it was around 24%.
Among OECD countries, Britain currently has one of the lower rates of trust in government, ranking 10th lowest out of 37 countries.[63]
Chart 62: Trust in Government
Source:
National Centre for Social Research (NatCen). Low trust in governments drives growing demand in electoral reform. Published 8 July 2025. Available at: https://natcen.ac.uk/low-trust-governments-drives-growing-demand-electoral-reform.
Chart 63: Trust in Government (Country Comparison)
Source:
Organisation for Economic Cooperation and Development (OECD). Trust in government. Available at: https://www.oecd.org/en/data/indicators/trust-in-government.html.
Insert Conclusion section
Footnotes
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Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.