Economic View: Believe it - the sun is shining

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The Independent Online

It is a good time to step back from the hurly burly of politics and have a look at real Britain. On Thursday, lost amid the background noise post-Hutton, came that fascinating annual round-up of how we live now, "Social Trends". It is a compendium of statistics, mostly from Britain but with some international comparisons, put together by the government's National Statistics agency and now in its 34th year.

It is rather a wodge of type and more than 250 pages of figures would not be everyone's light Sunday reading. But I would urge people to have a look (just type "Social Trends UK" into your internet search engine and it pops up) because the story it tells is a fascinating antidote to the winter gloom. The main theme that emerges is one of a country where people are living longer, are better educated, and have a higher standard of living almost every year. And while of course it chronicles areas of rising concern, such crime and high levels of exclusion from schools, there are some delicious surprises.

My favourite is the fact that English 10-year-old boys are almost the best readers in the world, number three behind the Swedish and the Dutch, while our girls are number two behind only the Swedes. JK Rowling would be proud of them.

I have pulled out four of the graphs to illustrate both the breadth of the study and the shafts of light it throws on us. First, we have become steadily and inexorably richer, increasing our consumption rather faster than the growth of the economy as a whole. Second, one aspect of that increased wealth is that we own a huge and increasing amount of electronica, particularly CDs, mobile phones and computers

Most people probably realise that in material terms we are becoming vastly richer, but worry about the cost of that wealth. Well, in one respect here, we are doing better: pollution has been reduced, particularly air pollution (next graph). Because we are rightly concerned about the muck in the air, we perhaps do not fully appreciate this improvement. Of course there are other concerns that are largely beyond our national control, in particular global warming. There is another little chart that shows summers in central England have suddenly become much warmer.

Another concern is the impact of ageing. That we live longer is surely welcome, but the rise in the ratio of retired people to workers does place a burden on the working population. The final chart shows how people consume, if that is the right word, much more healthcare as they get older. Babies cost a lot, but old people cost more. We probably skimp on our health costs for the elderly, but even so, it is a large annual payment to make.

Other intriguing trends highlighted in the report include the growing tendency for twentysomethings to live at home, a large rise in non-teaching support staff in schools, and a continuing rise in alcohol-related deaths (more than double the level of 20 years ago).

And how does all this compare with other countries? As a general principle, the similarities are greater than the differences and we are on most counts pretty much in the middle of the pack - a little worse in some areas and a little better in others.

My impression is that there are fewer international comparisons in this edition than there were a few years ago, and the comparisons tend to be with other EU countries rather than with the rest of the developed world. That is a pity because Europe is sometimes unusual, both in social and economic terms, when compared with other rich places, such as North America, Australia and Japan.

This leads to a wider concern. The whole developed world has been pretty successful at getting wealthier over the past generation, but many of us have a feeling that this may have been at the cost of becoming more selfish or at least self-centred. Certainly a lot of people are now worried about anti-social behaviour, evidence for which is supplied in "Social Trends". As it happens I have just come across two other bits of evidence that rather suggest this may be happening.

One is a study in the latest edition of The Economic Journal, out last Friday, by Professor John List of the University of Maryland. He suggests that the young are not nearly as generous as the old: both the probability of making a charitable donation and the size of the gift are related to people's age. The least generous apparently are young men, though as you look at older groups, generosity among males increases much faster than among females.

The other work is in a book published by the IMF last November - Who will Pay? by IMF staffer Peter S Heller. This is basically a book about the challenges facing policy-makers in the medium-term future, including of course coping with ageing societies but also other matters such as climate change.

The thing that jumps out, however, is a table showing how the shadow economy - the economy outside the tax net - has surged over the past 30 years. In 1970, here in Britain, only 2 per cent of GDP escaped the tax net; by the late 1990s it was 13 per cent. In the US it has risen from 4 to 9 per cent. But the most startling rises are in the rest of Europe. Belgium is up from 10 to 22 per cent, Germany from 3 to 15 per cent, Italy from 11 to 27 per cent, and while there are no estimates for 1970 in Greece, the latest estimate of the shadow economy there is 30 per cent.

So while the picture of increased wealth and well-being painted by "Social Trends" is a welcome one, I think we do have to look at some of the less agreeable indi-cators as well.

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