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Last Updated: Friday, 8 April, 2005, 11:31 GMT 12:31 UK
Election fact check: Economic growth
THE CLAIM

Chancellor Gordon Brown has claimed that Britain has enjoyed the longest period of economic growth in 300 years during the past 12 years.

"Britain is today experiencing the longest period of sustained economic growth since records began in the year 1701," Mr Brown said in his Budget statement in March 2005.

ECONOMIC GROWTH: THE FACTS

It is true that the UK has enjoyed unbroken economic growth since 1992, without falling into negative growth in any quarter (two quarters are generally considered a recession).

The difficulty in assessing the validity of the Chancellor's claim is that there are no quarterly economic growth figures before 1955, so we cannot measure brief recessions before that period.

There are, however, annual figures produced by the international think-tank, the OECD, that go back to 1820, although earlier data are estimates by historians.

These show that during the 20-year post-war economic boom, between 1953 and 1973, Britain grew continually on an annual basis - but that growth was interrupted by several short, quarterly slowdowns.

But, as leading economic historian Nick Crafts points out, if you want to know whether people are actually better off, it is significant that the average annual economic growth rate per person in the l950s and l960s was substantially higher than it is today.

He also points out that it is relatively meaningless to compare economic growth now with rates during the 18th and 19th centuries, when much of the economy was agricultural and subject to fluctuations due to weather, war and famine.

COUNTER-CLAIM: AVERAGE EARNINGS

The Conservatives have seized on figures produced by the independent Institute for Fiscal Studies (IFS) that suggest that average incomes fell between 2002/3 and 2003/4, from 409 weekly to 408 weekly, the first yearly decline since the early 1990s.

Shadow Work and Pensions Secretary David Willetts said:

"This is a devastating evaluation of what Labour has done to hard-working families...No one should be any doubt that if Labour were to win the coming election, tax rises would bite into family incomes all over again."

But the IFS itself says that its figures should be taken with caution and might be a statistical fluke. It also says that changes to the income of the self-employed, as well as the tax rises, might have caused the fall.

And although there was a drop in average (mean) earnings of 0.2% in that year, there was a rise in median earnings in the same period of 0.5%.

Due to the unequal income distribution, two-thirds of families have incomes below the average, while by definition 50% have incomes above, and 50% below, the median income - so this may be a better measure of most people's experience.

Over a longer time frame, during the period between 1996/7 and 2003/4. average income has gone up by 19%, and median income by 17%.

The average yearly growth rate of median income in this period - 2.3% - is higher than that during the Major years (0.8%) or the Thatcher years (2.1%) and is more equally distributed among the different income groups.

WHAT THE THREE MAIN PARTIES SAY

Labour has focused on its successful economic management of the economy as one of its top campaigning themes.

The Conservatives have broadly accepted that the economy is in good shape, but say that they laid the foundations for the recovery - which started under a Conservative government - by their tough economic reforms in the l980s.

They also argue that higher taxes are threatening to undermine economic growth and lower the living standards of the average family.

The Liberal Democrats accept that there has been strong economic growth, but say that some big underlying problems remain such as the huge increase in personal debt.



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