My attention was drawn to an article last week about the 50th anniversary of the introduction of the 50p piece, writes David Ellesmere, Leader of Ipswich Borough Council.
At the time this was the largest denomination coin in circulation. It was physically larger than the current 50p coins – they were reduced in size in 1997 – but it was also much larger in value. In fact 50p in 1969 was worth the equivalent of £8 today.
This is due to the effect of inflation eroding the value of the pound over the last fifty years.
Clearly the price of everything has increased in cash terms over this time but not everything has changed in line with inflation.
Take wages for example. The average fulltime wage for a man in 1969 was £1,560 which is the equivalent of £24,050 today. However the average male wage is now £31,834 – nearly a third higher.
For women wages have risen even faster (though still not equal with men’s pay) from £13,068 to £26,103.
Many things are much cheaper than they were in 1969. Food is about half the price it was. A 19 inch colour TV would have set you back nearly £4,000.
So why do we not feel so much better off?
There is one cost that is significantly higher now than in 1969. It is housing.
The average house then cost £4,312 which is £71,000 in today’s prices. Now it is £216,000. For a man and a woman on average earnings, a house cost around twice their annual earnings. Now it is nearly four times.
The increase in wages and the savings in the cost of everyday necessities have simply been dwarfed by the increase in housing costs.
We have simply not been building enough houses as a country since the 1980’s and especially not enough council houses. Shortage of supply has led to increasing costs.
The last time housing was genuinely affordable for most people was in the 1970’s, which was the last time there was significant council house building. This is not a coincidence.
Unless we get a Government genuinely committed to supporting a largescale council house building programme the cost of housing will continue to rise and continue to erode our standard of living.