The Budget cannot simply be a spreadsheet exercise.
Growing the economy and spending public money effectively are central tasks for any Chancellor, but we believe in a bigger goal for society: the wellbeing of people.
Every Government must effectively communicate what it is trying to achieve. The public rarely talk about GDP, so are unlikely to be swayed by the UK’s place in a G7 league table.
Instead, what we are talking about is how people feel about their lives. This is how the word “wellbeing” ought to be interpreted. Hence, any Budget ought to be focused on “building better lives”, after “fixing the foundations”.
This is why we are proud to have revived the APPG on Wellbeing Economics with support from the World Wellbeing Movement. It will be a Parliamentary home for those who seek to put wellbeing at the heart of policy.
Yet too many UK people are living with low wellbeing. The UK Wellbeing Report, published in July, estimates nearly 7 million people – 13% of the adult population – are living below the Happiness Poverty Line. These are people who rate their satisfaction with life at 5 or below on the ONS’ 0-10 scale.
Happiness in the UK remains below pre-pandemic levels: average life satisfaction is lower, more people live in happiness poverty, and fewer are flourishing.
We believe wellbeing is a good in and of itself. But such trends are also terrible for “UK plc”. If the Government is serious about economic growth, it must get serious about improving population wellbeing – the case is clear:
1. Happy employees are more productive. A national study of call centre workers highlights a causal link: a one-point increase in happiness (on a scale of 0-10) was associated with a 12% increase in productivity, measured by weekly sales.
2. Businesses that value wellbeing increase their value. In the world’s largest study of work wellbeing, conducted alongside Oxford’s Wellbeing Research Centre, Indeed’s Work Wellbeing 100 reveals that companies with higher wellbeing levels outperform the market.
3. Research also shows that businesses with high employee wellbeing are more successful at recruiting and retaining staff.
Informed by a strong evidence base and clear values, many businesses are using wellbeing as an essential component of their growth strategy – it is time for No10 to do the same.
First, the Government should show its commitment by ensuring wellbeing statistics are at least as prominent as GDP figures. After all, the Prime Minister has previously said “we can only begin to improve the nation’s wellbeing if we treat wellbeing equally to economic growth.”
The Budget is a critical event when the Government assesses the state of the economy. We need an equivalent moment in the Parliamentary calendar to focus on wellbeing, to shine a spotlight on where we are and what action can be taken to improve it – and spread it equally.
Second, any modern industrial strategy must consider the wellbeing of workers. This means the Government must work proactively with businesses to measure wellbeing across the economy and address drivers of workplace wellbeing.
Third, the Government should direct money to policies that make our lives better. The Treasury’s Green Book guidance demonstrates how policymakers can use evidence to consider the impact of policy proposals on wellbeing. Lord Layard’s Value for Money report shows investment in mental health support and apprenticeships would be a highly efficient use of public funds.
And if that is not enough, evidence shows wellbeing is a better indicator than economic performance of whether an incumbent Government is re-elected. With elections to local councils, the Welsh Assembly and the Scottish Parliament all taking place next May, politicians of all parties should reflect on the priority that voters give to wellbeing when casting their vote.
In turbulent political times, listening to how people feel – and acting on the causes – offers a positive path to renewing the UK by growing both the economy and wellbeing.
Peter Lamb MP, Chair of the APPG on Wellbeing Economics
Lord Gus O’Donnell, Co-Chair of the APPG on Wellbeing Economics