Wellbeing of Future Generations Bill [HL]

Lord Whitty Excerpts

2nd reading
Friday 25th June 2021 Lords Chamber

[Lord Whitty (Lab) [V]]

My Lords, I commend the persistence and drive of the noble Lord, Lord Bird, on getting this measure considered for the statute book.

The short-term thinking of generations of politicians, business leaders and financiers has left an appalling problem for our grandchildren and future generations. On one level, we have recognised this. For example, this week we have been debating the Environment Bill and we have had the report of the Climate Change Committee. But that just reveals that, although we set ambitious targets for greenhouse gases and sustainable development goals, we have not put in place the means of actually delivering the way to deal with problems inherited from our generation—and it is indeed our generation and, perhaps, the generation immediately before it that has created these problems.

Eighty per cent of greenhouse gases in the atmosphere have been generated in my lifetime, and 60% since global powers formally recognised the problem at the Rio conference. On the social side, also, problems of inequality—between and within countries—over- population and failure to tackle social ills, such as mental health and social care, have also been inherited from previous generations but have been aggravated by our failure to deal with them. The Bill aims to mitigate that, in an apparently modest bid—but, in mindset terms, a revolutionary change—to ensure that all decisions on projects and policies take into account the interests of future generations.

One apparently minor point concerns me. It sounds bureaucratic and technical, but it concerns discount rates, time preference presumptions and the Treasury’s Green Book rules. It runs through not only the psychology of our decision-making process, focusing on the short-term, but the technical process itself. For much of the key areas of decisions taken in recent decades whose inheritance we are now living with—from the 1970s to the 2010s, say—the official Treasury bill discount rate was never below 5%, usually at about 8% and sometimes as high as 15%. That mechanism was itself a major inhibitor of longer-term thinking, and we are living with the results.

We are now, since the financial crisis, in an era of low interest rates and low discount rates—below 1% at the moment—but that will almost certainly not persist beyond recovery from this pandemic. Can we, therefore, find a new mechanism that runs through our processes, so that we no longer discount future long-term benefits but begin to prioritise their interests and the interests of future generations?

When the noble Lord, Lord Bird, presented his earlier Bill, the Minister, the noble Lord, Lord True, objected that this just meant another quango, another parliamentary committee and another tick box, but this is so much more than a tick-box exercise; it is a whole new way of taking decisions. It will, regrettably, take time to bed in. The Welsh Government have made a commendable start, but they recognise that they have a long way to go. We have not even made that start; let us begin to do so today.