It’s not the time passing, it’s the opportunity for retrospection that kills you. Or at least that’s how it feels looking back a full 10 years to the day when I was working in the Treasury as we got the news that the French bank BNP Paribas had frozen funds exposed to US sub-prime mortgages. The crunch part of the “credit crunch” had arrived, and with it a chain of historic events that led to the first bank run in Britain in over 100 years and the collapse of Lehman Brothers just over a year later. Looking back over that decade is not pretty, and should leave us asking: is this really the best we can do?

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While British politicians share responsibility for not foreseeing the crisis, they deserve some credit for their immediate response. Alistair Darling and Gordon Brown’s decision to put money into our banks, eventually owning most of the Royal Bank of Scotland, stopped the downward spiral and prompted similar action from other governments, including that of the US. With hindsight, it may appear to have been the obvious course of action, but at the time very little was obvious as the right way forward was debated across the Treasury and Bank of England.

But not only did we in Whitehall fail to see the crisis coming, we failed in anticipating its long-term impact. We expected unemployment, repossessions and business insolvencies to surge, just as we had seen in the recessions of the 1980s and 90s. But none of these reached anywhere near the levels seen in the past. Repossessions peaked at a lower level than in 1991; the annual rate of business liquidations remained well below those seen in the 1990s; and unemployment fell just half as far as it had in the 1980s. Some groups, including black men and the young, paid a heavy price, but the infamous 3 million unemployment figure that scarred Britain in a previous recession was never breached.

In contrast, not a single Whitehall meeting I recall remotely anticipated the colossal pay squeeze that would see real earnings fall by over 10%. We should have spotted earlier the changed dynamic of a flexible labour market, very low interest rates and a big depreciation of the exchange rate, which fed quickly through into the higher inflation and lower living standards still evident today. Had we done so, we might have recognised earlier that employment levels were understating the economic damage being done and, for example, pushed harder against opposition to more radical action from Mervyn King, then governor of the Bank of England.

Today, when we know this is the defining economic event of most of our lifetimes, it’s even clearer that our response has fallen short. Yes, progress has been made on financial regulation, where the danger doesn’t lie in an immediate repeat of the crisis but in us forgetting why such changes were required in the first place. Banks have a capital base three times stronger than 2007, while institutional reforms under the coalition government and better international coordination are very welcome.

But the question people are rightly asking isn’t whether we have fixed the weeds of financial regulation. It’s about whom Britain works for. Reflecting from that perspective is much more depressing. We have failed to put the energy created by the crisis to good use. There are indeed some puzzles we lack definitive answers to, such as why our productivity levels are flatlining. But there are many other areas where despite knowing exactly what needs to be done, we still haven’t taken action.

Britain’s public finances have been the centre of political debate over the past 10 years, but where has that left us? With the national debt more than doubling since 2007 and the deficit set to be with us well into the 2020s. There have been big rows about the pace of deficit reduction, but one lesson of the crisis that everyone agrees on is that Britain’s tax base was too narrowly reliant on banking. Yet we seem to have forgotten that cutting taxes is easier than putting them up, meaning that a period of prolonged fiscal consolidation is a very silly time to be making major tax cuts. Yet that is exactly what we have done, with £18bn a year of income tax cuts that mainly benefit better-off households, and £9bn a year in corporation tax cuts. This undermining of the tax base has slowed down the repair of the public finances and put unsustainable pressures on some public services.

For all the talk of ever increasing income inequality, it has been broadly flat in recent years

On living standards, there is not some magic bullet to put right the fact that families on low and middle incomes have seen their living standards rise by just 3% since 2002-03. But acting on housing, which puts huge pressures on living standards, is very much within our control. Way back in 2004, a review by Kate Barker clearly outlined the need to increase housing supply. At the time a pitiful 225,000 homes a year were started. Fast forward a decade, and it was just 170,000: not what a learning curve looks like. It’s not just housing where we’ve ignored a problem to the detriment of intergenerational fairness. We knew before 2007 that our vocational education system was letting down swaths of young people. New technical qualifications, “T-levels”, are set to be introduced, but further education spending is back to what it was 2005-06 while secondary school spending has increased by a quarter.

For all the talk of ever-increasing income inequality, it has been broadly flat in recent years, after a fall during the crisis. Britain’s problem, in 2007 and today, is not that inequality always rises but that it is simply too high. But rather than reducing it, the coming years risk bringing the largest rise in inequality since Margaret Thatcher was in Downing Street. £9bn in cuts to tax credits and benefits for low- and middle-income families are in train, cuts that neither main party wanted to focus on in the recent election. It’s not capitalism delivering rising inequality, it’s the wrong policy choices.

The past decade has brought a recognition that government has more of a role in improving the lot of workers. However, with the welcome exception of George Osborne’s big minimum wage hikes, that consensus has done too little to deliver actual improvements. The coalition government simply tinkered at the edges of zero-hours contracts, when anyone in practice working regular hours should just be entitled to a regular contract. And why, in this day and age, is it still accepted practice for hotel workers to be given their shifts just a week ahead, when efficient companies around the world regularly plan months in advance?

Ten years of necessary ultra-loose monetary policy have left British households as addicted to personal debt and consumption as ever, posing a significant risk to growth if weak income growth continues. With interest rates remaining near zero, we should realise we can’t be as dependent on central banks to manage a future downturn. But where’s the preparation for shovel-ready infrastructure projects if and when that happens? Or, for that matter, the additional public and private investment we need more generally?

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After the second world war the Attlee government didn’t simply try to undo the damage of the war. From the NHS to our national parks, it used the energy from that cataclysm to build a better Britain. Franklin D Roosevelt’s New Deal wasn’t simply a response to the Great Depression, but a set of interlocking reforms aiming to build a fairer country. The financial crisis highlighted the big challenge of our time: to ensure the economy delivers for working people. Looking back over the last decade, it’s clear we have far from delivered. With Brexit looming, a lot’s changed in our politics. But when it comes to our economy, things simply haven’t changed anywhere near enough.

• Torsten Bell is director of the Resolution Foundation