Lord Layard
My Lords, I congratulate the noble Baroness, Lady Tyler, on proposing and securing this debate. I strongly agreed with everything that she said.
I do not think that there is any issue more topical or more urgent than this. Even before the economic crisis began, people world wide were beginning to question whether economic growth really should be the key touchstone of the policies of their Governments. “Surely”, people were saying, “human well-being must be the ultimate goal”.
Among governmental organisations, the greatest credit goes to the OECD for being daring enough to highlight this issue in 2004 when it began the first of its great conferences on defining progress. When it comes to individual countries, Britain is seen world wide as being the country, other than Bhutan, which has done more to promote well-being as a government objective, to think about it and to move towards measuring it. It is fair to say that many people around the world are looking at Britain to see what lessons can be learnt from how we are handling these issues here.
Of course, this started under the previous Government. We had well-being divisions set up in many departments, including health, employment, education and environment, and in 2009 the Office for National Statistics began its work on how to measure our national well-being. That said, of all the political leaders in the advanced world, our present Prime Minister has been outstanding in championing the idea that well-being should be a central, if not the central, objective of government. He said it in 2006, when he first became leader of the Conservative Party and talked about general and national well-being, and he said it even more emphatically when the measurement exercise was launched last November. He was absolutely right—I am not sure whether the right reverend Prelate would agree—that if you ask what is the purpose of government, it is difficult to see any other purpose for government than to create the conditions in which people can lead happy lives. How they find happiness is a subtle matter, but the Government create many of the conditions in which people lead their lives and surely that should be the basic guiding principle. I agree with Thomas Jefferson, who said that the care of human life and happiness is the first legitimate objective of government. I challenge anyone to come up with any other legitimate objective of government.
Perhaps I may comment first on the issue of measurement and then on the policy implications of the well-being objective and the Government’s performance in that respect. As the noble Baroness said, if you do the wrong thing, you search for your keys where the light is rather than where they really are. You only do the right thing if you measure the right thing.
It used to be supposed that it was impossible to measure the quality of life as people experience it in themselves, but in the past 30 years there has been an explosion of research on happiness which has shown that it is as measurable as any other internal state. We measure people’s political attitudes and do not think that is highly controversial; we measure whether they are unemployed, which depends on their state of mind in the way that it is measured in our official statistics; and how to measure depression used to be a subject of controversy but it no longer is. I am quite sure that in due course we will have a settled way of measuring well-being.
We currently have a number of ways and it is absolutely clear that although none of them is perfect—no measurement of anything is perfect—the measurements we already have provide valuable and meaningful information. For example, how people reply to questions about their happiness is closely related to the objective measurements you can make of electrical activity in the relevant parts of the brain, as well as being well related to the observations made by relatives, friends and observers; and the answers that people give to these questions are explicable in terms of many of the factors such as those mentioned by the noble Baroness.
This is not the place to discuss the exact questions the ONS is trialling—I declare an interest in that I have been involved in advising it about what questions to ask—but the Office for National Statistics, under its able chief statistician, has approached this issue in a most professional way. It has been testing many alternative approaches suggested by different people in addition to the four main questions it is already asking on a routine basis. By next summer they will have been answered, over a 12-month period, by 200,000 people
It will be an important moment when those results are published because it will give us, for the first time, an account of the state of the nation in terms of what I maintain matters most—how people actually experience and evaluate their lives. I am not sure whether it would be too grand to say that this will be a moment of comparable importance to the Domesday Book, or the first census, or certainly the great Rowntree surveys of wealth and poverty. It will show us, for the first time, who in our population is in misery and who is not. Many of the results will open our eyes, as did the Domesday Book, the census and the Rowntree surveys. It will be a very important moment in how we view our country.
It is also very important that the Government have insisted that the sample is big enough to provide valid and reliable results for each local authority area. One can imagine the debates in each council when they get their results and look at the distribution—where it is good, where it is bad and how it compares with other areas. It will be a wake-up call and I would be astonished if it does not lead spontaneously to a revision of the priorities of local government and of course—it is happening already to some extent—of central government.
Once you have got the measurements the next question is: why are things like this; what can be done about it? Of course, explaining the distribution of well-being—what are the causes of misery and happiness—should be, when we take into account the indirect causes as well as the direct causes, the main task of social science. We should think about the top priorities in social science.
We already know a great deal about what are the really important factors and the noble Baroness has already said much of it. I would say that, first, comes health—and mental health above all—and next comes human relationships, family, work, community, and money also matters to everyone. However, there are two important qualifications to that on which I would like to spend a little time.
First, in a country as rich as ours, relative income matters to people more than absolute income, and as our country becomes absolutely richer we cannot all become relatively richer compared to other people in our community; if some go up, others have to go down. This helps to explain why, as the noble Baroness said, there has been no increase in measured happiness despite the huge increases in absolute income experienced over the past 60 years.
It follows from this that although we need to deal with our immediate problem of unemployment and unused human resources, we need growth in the sense that we need short-run growth to get back to a state of full employment. We should not confuse that with long-run growth, which is much less important. We are going to have to revise our priorities away from the presumption before that almost anything could be sacrificed for the sake of greater long-term growth towards one where we put more priority on human relationships relative to long-run growth. We have put excessive priority on long-run growth and we have allowed it to erode our relationships in the family, work and so on. We have allowed the banks to argue that we need a highly risky economic structure on the grounds that it might produce more and higher long-term growth and we should not continue to accept those kinds of arguments. They are probably not even true in terms of long-term growth, and they are certainly wrong in terms of our values. Economic stability is far more important than long-term growth. The other caveat about money is that an additional pound increases the happiness of a poor person more than a rich person. Roughly speaking, the value of money to a person is inversely proportional to their income.
Finally, let me say a word about how the current actions of the Government stack up against the well-being objective. The Government face many constraints. They have made many important initiatives to promote well-being; in particular I would like to mention the one that the noble Baroness referred to: their commitment to complete the national rollout of improved access to psychological therapy. But if we look at the big picture, it is difficult to claim that the Government have prioritised well-being. Across income groups, the incidence of the overall cuts—including the expenditure cuts as well as the tax benefit changes—is affecting the poor more than the rich. This is inconsistent with what I said about the value of money to different parties. Across types of activity, the cuts are affecting our systems of human support for the young, the old and the unemployed more than they are affecting our capacity to produce long-term growth.
In fact, the Government have recently been hinting that they want to switch expenditure from current expenditure, which provides support for the social sector, towards higher infrastructure spending. As a founder member of the movement called Action for Happiness, I constantly hear stories about the devastating effect of this in terms of human well-being.
Lord Layard
I have tried to present a balanced scorecard. When the Government talk about the importance of well-being, I think it is totally sincere. It is a concern shared by all parties, but when it comes to the Government’s performance in delivering well-being, I am afraid that there is room for improvement.
Lord Wallace of Saltaire
My Lords, I very much welcome this debate. I share with the few who have spoken my enthusiasm for the topic and my view of its importance. I therefore much regret the very small number of people speaking from all Benches. I can remember five years ago or more, in my own party’s federal policy committee, being told that to have a working party on well-being and happiness was a woolly liberal topic that would arouse the scorn of the media. I read a book on happiness by one of my LSE colleagues at the time, which many thought was a woolly liberal book, written by an economist who only dared to do so because he was about to retire. The quality-of-life paper which my party debated at its last September conference was excellent. It drew on much more research than I had until then known was available. It was probably the first serious political party document that took this debate on board. I am very sorry that the Labour Party is so absent here, because it is absolutely the sort of topic that it ought to be taking on board. It is part of what our colleague, the noble Lord, Lord Glasman, is talking about when he talks about Blue Labour; the importance of community; the importance of social networks; and the importance of the non-economic factors, which old Labour ignored so dreadfully when it was knocking down the old housing communities and putting up those great and soulless estates.
The noble Baroness, Lady Tyler, says that this issue is starting to creep into the mainstream of public policy, and we must all accept that the word “creep” is important here. It has some way to go. It is also of course at the heart of the yet loosely defined concept of “big society” in the Conservative Party. I wish there were more Conservatives also taking part in this debate. There is a large cross-party, all-party debate to be had on this subject. It is still, sadly, only beginning.
I am answering this debate because, as the Cabinet Office spokesman in the Lords, I am responsible for the Office of Civil Society and answer for the Office for National Statistics—although I stress, it is an independent body to which I am answerable, but have no influence over. I think that is a very important part of this debate, because if we are talking about getting more reliable measures—measures that everyone in the debate will trust and be able to argue over—we need something like an independent Office for National Statistics to be able to hold the ground on that. I very much welcome the work that it is doing and the encouragement that the Prime Minister is giving to that.
The Stiglitz report, one of the key documents on this—after the book on happiness by the noble Lord, Lord Layard, some years before—says in its executive summary:
“What we measure affects what we do … Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance … if our metrics of performance are flawed, so too may be the inferences that we draw”.
The problem, as we all know, once one gets involved in this debate, is finding objective measures of well-being and of having to depend partly on subjective measures of well-being. The ONS is experimenting with different forms of subjective work. The international dimension of this—the OECD has already been mentioned—in the work of the Canadians, Australians and others, helps to feed in to a more informed debate. Sadly so far, on the whole, it is limited to the experts, think tanks and social science faculties, but I hope it will spill out into a national debate. As I say that, I can immediately see myself, or perhaps the noble Lord, Lord Layard, in front of Jeremy Paxman as he sneers, “Surely you don’t believe that well-being has any relevance”, let alone imagine what the Daily Mail will say about this. It is going to take a lot of time to build respect for a very important shift in the national debate. It starts from recognition that GDP as a measure of social progress is limited. It does not distinguish between economic activity associated with positive and negative social progress, such as the cost of long commutes, crime, divorce, dealing with natural disasters and so forth. It does not include those important functions performed in the household and voluntary sectors. What we are looking for is a means of measuring social capital and social added value as well as economic capital and economic added value.
I note also in the literature, which I have read with great interest over the last few days, that there is the question of how one measures the quality of life as well as the quantity that one consumes. The Stiglitz report was extremely valuable as a way station in this. I very much welcome the way in which our Prime Minister has taken up the debate, started under the last Government and a number of international organisations, and has done his best to take it forward. I thoroughly enjoyed his excellent speech last November, in which he said,
“it’s high time we admitted that, taken on its own, GDP is an incomplete way of measuring a country’s progress … all of life can’t be measured on a balance sheet”.
And he recognises that,
“a new measure won’t give the full story of our nation’s wellbeing, or our happiness or contentment or the rest of it … but it could give us a general picture of whether life is improving, and that does have a really practical purpose … it will open up a national debate about what really matters”.
He continues that,
“information will help government work out, with evidence, the best ways of trying to help to improve people’s wellbeing”.
That is what the Government are engaged in. That is what the coalition parties are entirely signed up to. We very much hope that the noble Lord, Lord Layard, will in time persuade the Labour Party to sign up to it as well—perhaps, even, to understand the purpose of what is now under way.
As has already been mentioned, the ONS is designing the best measures that it can and is undertaking a large-scale survey, the results of which will be published next July. I hope that will take us on to the next stage in a widening public debate. This will look at a range of areas, including social interaction, relationships, family, community, volunteering, the whole concept of fairness—relative incomes have been mentioned—and a sense of having control over one’s own life. That is a very important set of questions. These are factors that can clearly be influenced and shaped by public policy. To make a slightly partisan point, my dislike for socialism was nurtured by being a candidate in Manchester and working on those huge rebuilt council estates. I fought a constituency in 1974 where 98 per cent of the population lived in council accommodation, mostly flats. I had some real argument with the city planners, who thought that they knew best what was needed for the people who lived in those houses. It was a concept of passive citizenship, in which people had things done for them but had no control over their own lives. That is part of what we have to reverse, and part of what Labour in particular has to reverse, in some of the old Labour thinking that is still there.
We are making progress. Some of these data do not entirely relate to what government can do, but there are very wide implications for public policy across the board. The much greater importance that we need to give to the whole question of mental health is part of this. I thought that the public health White Paper took us one small step in the right direction in that. We all know that depression is the opposite of well-being, and looking at well-being takes us into that whole area.
I myself am very much struck by the importance of the built environment. It is the opposite of the central Manchester council estates in Saltaire, which is a wonderful community. We are forced to live next to each other, because it is all terraced housing. We have green space—there is a park. There is an institute at the centre of the village, and we all as a result know each other and interact with each other. It has a real sense of social capital. Even from just spending the weekends there, I know many more people in Saltaire than I do in my neighbourhood in London. I hope that I do not sound too much like Prince Charles in wanting to build that sort of community, but there are some real questions about the lack of wisdom of building those new estates on the edge of towns with two car spaces outside every house where you absolutely do not interact with your neighbours. You do not have a local high street or a community pub, and as a result you grow up without interacting with your neighbours. So neighbourhood, community and a sense of self-control are all part of this.
That takes us on to the localism agenda, which the coalition agenda is developing. We still have quite a long way to go. Being in control of your own lives also means having more self-government; it means encouraging active citizenship. Many of us also think that it means more urban parish councils and more local, local government. That is something that we have to work on to reverse the alienation of so much of our population from our current style of politics, with the passive observance of Prime Minister’s Question Time as a form of distant entertainment that in no sense involves you.
So this has very large implications for consumer culture and the extent to which marketing and advertising encourage people to substitute buying things for actually thinking what they really want. There is the question of how far government policy should attempt to alter the way in which marketing and advertising go. There is the whole question of social trust and social capital. So we have a very long way to go.
I welcome the little remnant of us who have taken on this debate, all calling for a wider national debate, which shifts the national debate on to a new ground. It is a huge challenge to the conventional wisdom and a challenge to all political parties. It is also a challenge to the economics profession, which I hope the noble Lord, Lord Layard, continues to push. I hope for further debate in this Chamber as part of the wider debate, and I suggest to the noble Lord, Lord Layard, that he persuades Labour Peers to give the subject a full Thursday afternoon debate, or as full as possible, because this is a challenge to us all.