National Well-being

Lord Layard Excerpts

Wednesday 14th December 2011 Lords Chamber

[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.

[Baroness Verma]

Can the noble Lord come to an end?

[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.