Have we never had it so good?

YOU'VE NEVER had it so good! As far as I'm aware, Gordon Brown has never actually repeated Harold Macmillan's famous words, but that's been the essence of his message whenever he has spoken about the UK economy in recent Budgets and other speeches.

As he never tires of reminding us, the economy has expanded for 50 consecutive quarters, the longest run of unbroken growth on record. Meanwhile, unemployment is at very low levels, inflation and interest rates are also at their lowest 'for a generation', and the bad old days of boom and bust have apparently been banished forever.

But given all of this good news, why is it that people don't seem to feel all that well off ? I must admit, this is not necessarily the message coming from the economic statistics. The latest consumer confidence figures gave a reading of precisely zero, which sounds pretty low.

But this is well above the long run average of minus six (we are a nation of natural pessimists!) and, on past performance, high enough to ensure the Government a comfortable victory in the forthcoming general election. It is also above the equivalent readings in most other countries.

Likewise, consumers' actual spending behaviour has hardly portrayed a sense of gloom or poverty. On the contrary, households have responded impressively to the inducement of very low interest rates, borrowing confidently and spending with gusto.

THIS HAS offset the weakness of the corporate sector and kept the economy expanding at a decent pace in what have been pretty difficult global economic conditions. Nor has the buoyancy of the housing market in recent years been obviously consistent with a lack of optimism.

But while the statistics lend some support to the Brown view of the world, the mood on the Clapham omnibus seems rather different. Granted, those of us who live and work in London may get a distorted view of things.

After all, our house prices have been pretty flat - if not falling - for a while, and there have been other things like the congestion charge to deal with. But I suspect that the phenomenon goes beyond the capital.

So what lies behind it? I think there are four possible explanations. First, economic statistics can give only a limited indication of the quality of life. The economy may be doing as well as the Chancellor tells us, but if other considerations like crime and the environment are getting worse in our minds, that may have a bigger influence on our mood. (The recent performance of the England football team won't have helped either!).

What's more, a strong economy could itself have an adverse effect on our quality of life if it means we all have to work longer hours.

Second, even in the economy, there are problems that are not directly reflected in the official statistics, one obvious area being the growing pensions crisis. And economic developments which may be positive for some may have the opposite effect on others. The effect of the recent sharp rises in house prices on would-be first-time buyers is a clear example.

Third, it may simply be in our nature to pay more attention to unfavourable developments than favourable ones.

We may be more inclined to notice sharp rises in council tax and gas and electricity bills, for example, than the fact that the prices of clothes and household goods such as televisions and DVD players have continued to plummet.

Finally, even if we accept that recent times have been as good as Mr Brown says, anyone with even a casual sense of UK economic history might be forgiven for thinking that it cannot last.

The rapid rise in house prices in particular looks worryingly reminiscent of that in the late 1980s, before the market then crashed. Meanwhile, the fact that Brown has hit voters with sizeable tax increases straight after the last two general elections is ominous.

SO WHAT'S the solution? It's fair to say that economists are not known for spreading joy, but a well-respected member of the profession, Richard Layard, has produced some interesting research into the secret of happiness, ranking various everyday activities by their effect on our sense of well-being.

Top of the list was - you've guessed it - sex. Bottom was commuting. So the short answer seems to be, spend less time on the train and more in bed (or somehow combine the two!).

If that doesn't help, it might be worth remembering that things could be a lot worse. If, in a year's time, house prices have crashed, taxes have risen and, God forbid, England have failed to qualify for the World Cup, we might all look back on today and wonder why we were so gloomy. Things aren't all that bad. Enjoy them while you can.