Paul Johnson CBE FAcSS spoke at the CfSS/Sage Publishing Annual Lecture 2018
1 November 2018
This year the Campaign for Social Science/Sage Publishing annual lecture was delivered by Paul Johnson CBE FAcSS, Director of the Institute for Fiscal Studies and Visiting Professor of Economics at University College London. Paul Johnson has published and broadcast extensively on the economics of public policy, with a particular focus on income distribution, public finances, pensions, tax, social security, education and climate change. His career has included leadership roles at HM Treasury, the Department for Education, the FSA and the Government Economic Service. Paul Johnson is currently visiting professor at UCL. In 2018 he was awarded a CBE for services to the social sciences and economics.
Paul Johnson CBE FAcSS: Public Policy 10 Years After the Crisis
Glimpses of the lecture:
Abstract of the lecture:
The political uncertainty we currently face is obvious. From the result of the Brexit referendum to the election of Jeremy Corbyn to lead the Labour party and the result of the last election expectations have been consistently upset. It is unlikely to be a coincidence that these follow a set of economic changes which are historically unprecedented.
The economy is at least 14% smaller than we might reasonably have expected it to be back in 2008. Household incomes have grown at their lowest rate in more than half a century and, remarkably, median earnings remain below their 2008 level. The old have done much better than the young though, contrary to much belief, high earners have actually done less well than low earners.
One big lesson of all this is that policy and perception often takes far too long to catch up with reality. Income and earnings growth were already slowing in the 2000s. Income inequality was growing for a long time, especially at the top. Policy has been propelling pensioners forward, often at the expense of the young, for much more than the last decade. House prices and home ownership levels were big issues long before 2008. Regional inequality is a long standing issue in the UK.
Dealing with all these challenges will be hard enough. More challenges for the future are already clear. The low skilled and the low educated face a desperately tough future in the labour market, and all face uncertainty was technology develops. The next generation of pensioners will, individually, be bearing absurd amounts of risk in a hugely uncertain environment. The current inequalities between generations will hinder social mobility. Perhaps most importantly we are going to have to grapple with funding a welfare state that, because of ageing, will become more expensive. There is nothing left to cut to fund more health, pensions and social care, which is likely to mean more taxes.
If there is one lesson from the period since the crisis it is that long term policy needs to be developed across government based on a broad understanding of the social and economic trends. There is little evidence that this lesson is being heeded.