Wellbeing of Future Generations Bill [HL]

Lord Whitty Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Friday 13th March 2020 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I congratulate the noble Lord, Lord Bird, on producing this revolutionary and visionary Bill, and I congratulate Welsh colleagues on showing the way.

Reading the Bill as it stands, it does not immediately give the impression of either vision or revolution. It is full of references to new commissioners, joint committees, processes, annual reports and so on. But—and this is the key point—if properly implemented and followed through, it would embed in the mundane processes of government, and to some extent of business, the central principles of sustainability and concern for the well-being of our grandchildren and the generations beyond. That, given what we normally do, is truly revolutionary. All the great revolutionaries, from Jefferson and Robespierre to Stalin and Lenin, saw the point of writing their own ideology into the constitution—though some of them overdid it a bit. This will give us the way to meet the objectives of this Bill, if we take it seriously. It also has the benefit of being subject to parliamentary democracy, and indeed wider democratic participation.

Until recently, most economists have downplayed the problem of future generations on the grounds that economic growth, turbocharged by innovation, would give future generations more resources to sort out their own problems, and that therefore it is an issue of distribution for future generations rather than for us. That no longer holds water. The kind of problems we face now, such as climate change, biodiversity challenges, threats to the cultures of many human societies, resource depletion, overpopulation, inappropriate farming methods and so forth, all mean that future generations will have much bigger problems. Economic growth in and of itself will not give them the means and resources to make those distributional decisions.

I want to make a couple of technocratic points. The first is on the rather modest Part 6 of the Bill, which relates to social value. Those clauses would put into government procurement the need to observe the wide range of cultural and economic effects of social value. Take the example of the buying of food by the public sector: observing social value issues would dramatically change the way in which our food system works. That needs to be taken into account when we come to consider the Agriculture Bill shortly.

My second point does not relate explicitly to the Bill, but was hinted at by the noble Lord, Lord Rees. To summarise, he said that Ely Cathedral was not subject to modern methods of cost-benefit analysis—that indeed is the problem. Almost every decision within government is subject to a net present value calculation based on the discount rate diagnosed and proclaimed by the Treasury in the Green Book. For years, that used to be at 8%, which meant that, 20 years ago, any benefit to anybody in 20 or 30 years’ time was reckoned at pretty much nothing. Now, at 3.5%—which is itself considerably higher than the rates of interest—it reduces £1,000-worth of future benefit in five years’ time to £700. In 20 years’ time, the benefit to future generations, even if we identify it now, would be discounted almost to nothing.

To really make this work, the Government would have to look at this concept and these mechanisms, which are absolutely essential to our appraisal of policies and particular projects. They would need a really thorough going-over, and I hope the Government realise that, if they accept this Bill, this is what they will have to do. I hope the Government do accept it, and that what has been referred to as the Bird Bill turns into the Bird Act, and we put the resources behind it to make it real. I once more congratulate the noble Lord, Lord Bird, on producing today’s Bill.