Britain had the highest per-capita rise in GDP in the G7 since Labour came to power. But critics are calling for an end to "unsustainable" growth.
As the economy emerged from recession, figures from the IMF – including data for 2009 – show that since 1997, Britain has had the highest per-capita rise in GDP in the G7. But critics are calling for an end to “unsustainable” growth.
As the chart below shows, Britain’s GDP per per capita rose 21 per cent since 1997, with GDP overall rising 28 per cent, behind only Canada (35 per cent) and the US (31 per cent).
The growth in GDP was responsible for creating millions of jobs, providing a better standard of living for a decade, and mending the broken public services infrastructure. Although some, including James Purnell, have pointed out that, “GDP had been artificially inflated by the housing and financial bubble.”
A new campaign by the New Economic Foundation is arguing that “indefinite global economic growth is unsustainable” while campaign group 38 degrees are calling for an end to the “fixation” with economic growth.
A new website and YouTube video, The Impossible Hamster, has been set up to promote the campaign.
Watch it:
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23 Responses to “UK has highest GDP per capita rise in G7 since 1997”
Post-recession carping | FTdotcomment | FT.com
[…] Straw, from the left, highlights IMF figures showing Britain has had the highest rise in GDP per person since 1997 of any of the G7, in spite of the […]
soondra
This is a very interesting analysis and as the recovery begins, slowly, Labour can perhaps present its case as a party of economic management. Although we’ve had a dreadful downturn, unemployment has in fact been relatively benign (peaking at 2.5m on the broad measure http://www.guardian.co.uk/business/2010/jan/20/uk-unemployment-surprise-fall). And the Conservatives would clearly have withdrawn credit and stimulus from the economy too early. A mistake they should be reminded of during the campaign.
To Mark, it seems to me perfectly legitimate to pick 1997. This is the three Parliament record of this Government. And it is a relatively good record.
Mark
Like I say this began in 1991 so claiming it for Labour is spurious. No doubt this won’t stop some but the performance has little to do with specific Labour policies, it’s more right place right time stuff, not the stuff of evidence-based blogging.
Be careful to claim credit for things unattributed to you for you might have to accept responsibility for the negative things too.
soondra
Mark, you make a very good point: be careful to claim credit for things without taking responsibility for the negatives.
But this contradicts your entirely arbitary 1991 date. The Tories were in government 1979-1997 and didn’t take over in 1991. In fact their record in terms of GDP growth per capita per annum (1979-1997) is around 1.8%, pretty much exactly the same as Labour during their time in office. But of course the social consequences of the 1980-82 and 1990-91 recessions were much worse; unemployment topped 3 million in both Tory recessions, whereas it looks like unemployment has peaked at around 2.5 million in the current one.
If growth (in the long term) is the same, but adverse social costs are lower, I’ll vote Labour.
Mark
soondra: The date of 1991 isn’t arbitrary, it’s when UK GDP started to grow after a recession. If we wanted to discuss postwar politics in the UK, we’d start at 1945. If we want to discuss GDP growth we go back to 1991 since that’s the start of the data series and therefore very relevant.
Your point on the “social costs” is similar to my point above: it’s got little to do with Labour. What has Labour done to keep unemployment down in this recession? After all, the fiscal stimulus was small, it was half the size of the measures taken in France or Germany. Instead, economists tend to think that actually Britain’s famously flexible labour market has responded here. Firms have fired some workers but they’ve also cut the pay of others, so people remain in jobs but on low pay. Plus those losing work are being forced into accepting part-time work. In other words, just as the GDP outperformance of the UK, US and Canada compared to Europe and Japan is believed to be a result of the Thatcher-Regan legacy, so the UK’s low unemployment owes itself to flexible labour markets, aka McJobs.
So vote Labour if you like but the evidence suggests you are actually approving neo-liberal reforms from the 1980s rather than any actual Labour policies. Once again, just because something happens during a Labour government does not imply that policy is responsible for it. Labour’s embrace of Margaret Thatcher’s reforms has more to do with both GDP growth and lower unemployment but as I pointed to Will above, this evidence is not the progressive image some of a partisan* stance want.
I’m not party-political, I want an open, liberal and progressive society but am wary of parties, their power structures and their groupthink.