Thinktank argues that growth, inflation and unemployment are inadequate measures when tracking economic progress, and suggest 20 alternatives – a selection of which are outlined below. (
http://www.theguardian.com/business/2014/mar/12/fabian-society-alternative-indicators-of-britains-economic-performance)
Angela Monaghan
Median household incomes
Measures the change in living standards and financial prosperity for typical households better than GDP, which has not been a good guide to incomes.
The recession and austerity dealt a "significant blow" to middle incomes, which fell by a cumulative 5.9% from 2009-10 to 2011-12, taking average incomes back to levels seen a decade earlier.
Target: Average rise in incomes of 2.2% a year.
Greener economy
UK greenhouse gas emissions have fallen by around a quarter since 1990, with reductions averaging 1% a year, but with prevention of climate change essential for the wellbeing and prosperity of future generations, they will have to fall faster, the Fabian Society says.
Target: Reduce emissions by 80% between 1990 and 2050. The UK is on course to meet interim targets up to 2017, but miss them up to 2027 if current trends continue.
National debt
The debt must come down to ensure the UK can deal with future shocks, but a balance needs to be struck between lower debt and the public wellbeing and economic growth that government spending can bring.
Before the crisis, national debt was less than 40% of GDP but is forecast to reach 80% of GDP in 2015-16.
Target: Public debt should be returned to pre-crisis levels, but over decades, with "the precise goal less important than the direction of travel".
Income inequality
Poverty must be reduced further to enable people to live adequately and take part in society. The number of people living in relative poverty fell from 20% of the population in 1997-98 to 16% in 2010-11. But child poverty fell from 27% to 18% - missing an interim target outlined in the Child Poverty Act.
Target: Cut the relative poverty rate to 10%, both for children and the wider population.
Labour productivity
Productivity increased rapidly in the 1990s, and between 1997 and 2010 the increase in output per hour was second only to the US, helping drive long-term prosperity. But since the crisis UK productivity has fallen behind other countries and output per worker is 15% below the pre-recession trend.
Target: Catch up with other advanced economies such as Germany, and reach the top quartile of annual improvement in productivity for OECD nations.
Intermediate skills
Strong skills are a cornerstone of an economy with high employment and good jobs, and essential for personal prosperity and resilience in the face of change. The UK has traditionally suffered in this area and since 2002 the proportion of the population with skills equivalent to GCSEs and A-levels has been roughly flat at less than 40%.
Target: 50% of adults to have at least an intermediate qualification by 2020.
Capital Investment
Investment in long-term assets is expected to improve productivity and economic success, but it fell from 18% of GDP in 2007 to 14% of GDP in 2012. Business investment was 8% of GDP in 2012, and government investment was 2.3%.
Target: Get back to pre-crisis levels of total investment in the short-term.
Low pay
The incidence of low pay – defined in 2012 as below £7.44 an hour – has been stable since the late 1980s at around 21% of the workforce, despite the introduction of the minimum wage – keeping households on low incomes and increasing reliance on social security.
Target: Reduce the incidence of low pay to 17% of the workforce – the level achieved in the 1970s after the introduction of the Equal Pay Act.
Employment rate
Raising the rate will support growth and increase average incomes, reducing pressure on the tax and benefit system. Employment has been more resilient than expected during the crisis. Between 2001 and 2008 the rate was 73% among 16- to 64-year-olds. It is currently 72.1%.
Target: Restore pre-crisis levels of employment in the short term, but achieve closer to 80% employment in the longer term.
Affordable homes
The UK has an acute housing shortage with many people priced out of home ownership, while those renting can pay out a significant proportion of average incomes. In 1997 a median home in England was valued at 3.5 times moderate median earnings, that had ballooned to 6.5 times by 2012.
Target: Keep the affordability ratio at least stable – ideally get it down to levels seen a decade or more ago.
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