I remind hon. Members of the guidance from the Commission and the Government about wearing face masks when they are not speaking, giving space to other Members and staff, and testing twice weekly with lateral flow tests, either on the estate or at home.
That this House has considered a wellbeing economy approach to meeting climate goals.
It is a pleasure to serve under your chairing, Mr Betts. I am grateful for the opportunity to debate why the Government should embrace a wellbeing economy if they are serious about meeting their climate goals. Beyond the climate emergency, there are many other reasons to move beyond our current extractive, exploitative and growth-addicted economic system: tackling inequality, stopping the destruction of the natural world and preventing future pandemics, to name just three.
Crucially, the discussions in and around the COP26 summit remind us that those issues cannot be separated and siloed. If we keep decimating the natural world, we will not meet climate goals. If we do not put equality and justice at the heart of climate action, we will not make the shift to a greener and fairer economy. Pandemics, meanwhile, in the words of some of the world’s leading scientists, are
“a direct consequence of human activity—particularly our global financial and economic systems, based on a limited paradigm that prizes economic growth at any cost.”
Many colleagues will be well versed in why GDP growth has always been a terrible measure of a nation’s economic progress—I will not go into the detail now. However, it cannot be overestimated how critical shifting from growth to wellbeing is from a social and equity perspective. As a report by leading economists for the OECD finds, patterns of economic growth have generated significant harm over recent decades. That includes rising inequality, not just catastrophic environmental degradation—which itself hits the most vulnerable the hardest.
I want to focus on the climate imperative of transforming our economic system, and on the wellbeing economy as a specific, practical and positive alternative to economics as usual. I will start by mentioning a recent parliamentary petition that called on the Government to shift to a wellbeing economy and put the health of people and planet first. It has been linked to this debate on today’s Order Paper; I want to thank the many thousands of people who supported that petition. It was started by a young Brighton constituent, Skylar Sharples, and it begins like this:
I am delighted to be called to speak first after the hon. Member for Brighton, Pavilion (Caroline Lucas), who I thank for securing this debate on the most important issue. I genuinely cannot imagine two more important priorities for an independent Scotland than ensuring that we have action on climate change and that we put wellbeing at the front of everything we do.
We are lucky in Scotland that we are already on this road. We have begun to make the changes that are required to move away from focusing entirely on economic growth and toward looking at the wellbeing of our population. When we are looking at budgets, such as the national performance framework, as was mentioned, our decisions are looked at through a lens. Do they improve wellbeing? Do they reduce our negative impact on the planet? I think it is wonderful that we do that.
There are also good things happening in schools. Bairns throughout Scotland are aware of their rights under the UN convention on the rights of a child. It is taught throughout Scottish schools. I can speak to kids as young as five and ask them about their rights. It is important for people’s wellbeing that they are aware of their rights and are able to fight for the rights that they deserve. It is important that they are able to make their voices heard. The only way we are going to get to wellbeing is to ensure that everybody is empowered to get those rights.
There is absolutely no point in focusing on economic growth for economic growth’s sake. The UK economy has been growing, but inequality is still stretching. We have still seen an increase in inequality. People who are on the bottom of the pile continue to be on the bottom of the pile. We are not improving societal wellbeing if we are not ensuring that decisions benefit everybody, rather than those currently at the top of the pile. For all our constituents, we need to ensure not just growth, but fair growth. We must focus on reducing inequality—and focus on everything that the hon. Member for Brighton, Pavilion said—and on making sure that decisions, particularly budgetary decisions, are taken with the wellbeing of people in mind, not simply growing the money of this country’s richest people.
It is a pleasure to serve under your chairmanship today, Mr Betts. I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for securing this important debate. I very much agreed with her eloquent and detailed speech.
Members may remember that the renowned author Naomi Klein stated in 2011 in her paper “Capitalism vs the climate” that:
“Climate change is a message, one that is telling us that many of our culture’s most cherished ideas are no longer viable.”
Sadly, 10 years on from Naomi’s groundbreaking paper, not much has changed. We are now faced with more stark messages in the form of covid-19, the social care crisis, an energy crisis and a cost-of-living crisis. We simply do not have an economic system geared up to ensure that everyone flourishes. We see growth prioritised, but rarely do we ever question the real nature of such growth or what its adverse consequences could be. The OECD has stated:
“If ever there was a controversial icon from the statistics world, GDP is it. It measures income, but not equality, it measures growth, but not destruction, and it ignore values like social cohesion and the environment. Yet Governments, businesses and probably most people swear by it.”
Growth means nothing to many families struggling, living in cold, mould-infested homes, wondering if they are ever going to get a lucky break. It means nothing to the pensioners struggling to get the care they need, and it will mean nothing to our children if they have no future because the flawed and relentless pursuit of growth above everything else finally destroys our planet.
The good news is that with real economic and political will, we can develop a system of economic metrics that centres our economy around what should be the most important measure of success for any Government: wellbeing. As Katherine Trebeck from the Wellbeing Economy Alliance explains, that means recognising that
It is a pleasure to serve under your chairmanship, Mr Betts. It is also a great pleasure to support the hon. Member for Brighton, Pavilion (Caroline Lucas). We were great colleagues in the European Parliament and, dare I say, the precursors to the co-operation that we are seeing in Scotland, where Green leadership is taking us to new vistas of co-operation.
The wellbeing economy is an idea whose time has come. We are measuring the wrong stuff. So much of what we see within the public debate about public services and public investment posits economic growth versus wellbeing or versus environmental standards or other measures of public good. It should not be either/or; we need to consider both. We are measuring the wrong stuff. That means that the criteria against which we measure outputs is leading us to perverse incentives.
The pandemic we are all, sadly, very much still living through—we cannot relax yet—is a disruptive event for a lot of people: not just everyone in this room, but all our constituents as well. People are considering how they live their lives, where they get their food, how they travel to work, where they work, what they do and how they spend their time. Questions of work and productivity are being examined in households up and down the length of these islands in ways they never have been before. GDP is a rubbish measure of any human happiness.
If we want to increase GDP, I will give two examples. A car crash is a fantastic way to increase GDP, because it involves garages, lawyers, insurance companies. It involves all sorts of things that are not economically productive, but do count from an GDP perspective as positive to the balance sheet. Divorce is also great for GDP: one house becomes two; lawyers make lots of money; and assets are split up. There are various economic things that count in the GDP ledger, but are surely not positive for us as a society.
5:22 pm
Beth Winter (Cynon Valley) (Lab)
I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for securing this really important debate. The subject is close to my heart and to how I try to work as a political representative, both in Parliament and in my constituency. My firm belief is that we need to work for a society that is not driven by the quest for growth, profit and the enrichment of a few. Rather, we should work for a society where meeting human needs is paramount.
To turn theory into action, it is important that we, as public representatives, engage with and involve people we represent and take a bottom-up approach to change. Part of the process should involve holding open discussions with constituents, involving them and giving them a sense of ownership of the changes that can meet their needs and those of the community.
I will share some examples of action that I, alongside local people in my constituency, are taking to put these theories into practice. Earlier this year, I held a series of climate assemblies in Cynon Valley, resulting in a public document that we submitted to COP26. More recently, we received a report that I commissioned from the Bevan Foundation called “Cynon Valley after covid: action for recovery and renewal”. Over 120 people attended our climate assemblies, which covered green jobs, green transport and green energy. It was clear from those discussions that local people understand the need for change and have the appetite and many of the solutions to enable it to happen.
The green jobs debate, for instance, emphasised the need for training for future skills and the need to nurture local talent. People were also clear that any new green jobs should be secure and well-paid, and have good terms and conditions. A headline statement from the group was that
“cooperation and not competition must be the way forward”.
That leads me to a very brief overview of the “Cynon Valley after covid” document, which looks at the kind of society and economy that we feel we need in Cynon Valley. It is underpinned by a community wealth-building approach, which will help to stimulate local economic activity by reducing not only the leakage of money out of the area but, more importantly, the size of the profit extracted. That can help to build and spread wealth in the local population, which will assist in the process of prioritising and addressing the health and wellbeing needs of our local community. The report ends by recommending a green Cynon programme, with fair work, skills, action to stimulate new local businesses, including community-based enterprises, the retrofitting of energy-saving measures in all housing, and the development of wind and solar energy projects.
I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for bringing forward this debate and for many years of leadership, giving vision in this area and a lot of practical direction. The necessity for change, and the failures of the economic model that we currently operate, are all around us: in climate and nature breakdown, in inequality within and between nations of the world and between generations, in the depletion of resources and the hoarding of wealth, and in the mental ill health and lack of fulfilment that are beginning to engulf our populations.
The hon. Member for Stirling (Alyn Smith) outlined some of the absurdities of GDP as our sole measurement, with all of the negative effects simply written off as “externalities”. It is very clear that a system that accounts for tobacco sales and bets placed by gambling addicts, but does not find any way to capture time spent raising children or the value of clean air, is no longer fit for purpose. We have known that for decades.
The impacts of consumption and growth-driven production on our planet do not need to be articulated in this room. I know that because this country and others like it consume, drill, burn and dump at a rate that would require numerous planets to sustain it. That, of course, causes negative impacts for the planet and its inhabitants.
It would be one thing to keep pursuing this model if it resulted in a healthy and happy population, but it does not. We know that income inequality in the UK is higher than it has been for decades, and probably the highest in Europe. It affects people at every single point on the economic distribution scale, as well as overall societal cohesion. In the absence of any serious mitigation policies, that will unfortunately only get worse.
I thank the hon. Lady for giving way in her fantastic speech. She may agree that part of the growth delusion—this constant demand for GDP and growth—is that it will actually begin to trickle down to poorer members of society, both domestically and internationally, yet that does not happen. Rather than keeping on growing the pie, destroying the economy and the planet, would it not be better to better share out the pie we already have within the current limits of the ecology and the environment?
20 of 37 shown
“We urgently need the Government to prioritise the health and wellbeing of people and planet, by pursuing a Wellbeing Economy approach. To deliver a sustainable and equitable recovery, the Treasury should target social and environmental goals, rather than fixating on short-term profit and growth…Two thirds of the public want the Treasury to put wellbeing above growth. Scotland and Wales are already part of the Wellbeing Economy Governments alliance. As host of the COP26 climate summit, the UK Government should build and champion a Wellbeing Economy—at home and globally.”
That petition did tremendously well to get almost 70,000 signatures. Even though it was not enough to secure a debate via the Petitions Committee, I am very grateful that through the ballot process we were able to hold today’s debate.
In turning to the climate imperative for switching from growth to wellbeing as the purpose of our economy, I will start with the science. If we take the global climate goal of reaching net zero by 2050—leaving aside the injustice and inadequacy of that as the UK’s goal—economic growth is still the elephant in the room. During that same 30-year period, between now and 2050, the global economy is set to nearly triple in size. That means three times more production and consumption than we already have each year. It is enough of a challenge to decarbonise an economy the size of the current one in such a short time span; it will be virtually impossible to do it three times over. If we carry on with growth as usual, then halving emissions by 2030 would require that rich countries like the UK decarbonise their economies at a rate of more than 12% per year. That is more than five times faster than the historic rate of decarbonisation, and about three times faster than what scientists project is possible, even under highly optimistic conditions. The most “successful” rich countries are decarbonising at only around 3.4% a year; the performance of average rich countries is much worse. The gap is huge, and however heroic one’s assumptions are about the potential for decoupling growth from carbon emissions—an argument that I am sure we will hear from the Minister—there is no evidence that there can be absolute decoupling in anything like a fast enough timeframe.
The bottom line is that the GDP figures that we are using to measure economic success are also measuring the rate at which we are barrelling towards climate catastrophe. It is little wonder that the voices around us are saying that we need to end our addiction to GDP growth to tackle the climate emergency. Those voices—from climate scientists and environmentalists to economists, health professionals and business leaders—are becoming louder. I want to give two examples.
There was a recent joint report from the Intergovern-mental Panel on Climate Change and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services—an intergovernmental body that assesses biodiversity. The report calls for
“a profound collective shift of individual and shared values concerning nature—such as moving away from the conception of economic progress based solely on GDP growth, to one that balances human development with multiple values of nature for a good quality of life, while not overshooting biophysical and social limits.”
That is pretty clear, and it is coming from the world’s most respected scientists.
To take one example from the business world, former Unilever CEO, Paul Polman, recently wrote about the World Economic Forum’s 2021 global risks report, in which four of the top five risks to our economies are coming from the environment—including climate change and biodiversity loss. He said that
“the estimated $300 billion annual cost of natural disasters caused by ecosystem disruption and climate change”
highlights
“the risks of unbridled economic growth. Thinking beyond GDP and short-term profit is therefore essential in order to restore our relationship with the planet and transform our system into a viable one.”
So, wellbeing within planetary limits, not infinite GDP growth, is the new economic goal we urgently need. If the boss of a massive multinational can get that, I have to ask why can’t Treasury, especially when its own Dasgupta review of “The Economics of Biodiversity” made the case so well, too. It reads,
“GDP does not account for the depreciation of assets, including the natural environment. As our primary measure of economic success, it therefore encourages us to pursue unsustainable economic growth and development.”
The Dasgupta review also calls for an
“urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world”.
Yet the Treasury response to that key recommendation does little more than refer to a review of GDP that was done six years ago. That is not “urgent and transformative change”.
I hope the Minister can convince us today that the Treasury is not as cavalier and complacent as it would appear. Will she confirm that the Government accept the need to adopt new measures of economic success beyond GDP to give climate, nature and collective wellbeing the priority they deserve? What work is taking place on that? It will not be good enough to say that the Office for National Statistics has developed natural capital and wellbeing indicators, because those indicators are not just out of date; they are clearly not being used in policy making, least of all inside the Treasury where GDP growth reigns supreme. It is a bit like claiming that you have adopted a healthy diet because you have some flaccid carrots in the fridge but meanwhile you are chomping down on a box of Mars bars. It does not wash.
Similarly, the inquiry by the Environmental Audit Committee, of which I am a member, into biodiversity and ecosystems concluded:
“Alternatives to GDP urgently need to be adopted as more appropriate ways to measure economic success, appraise investment projects and identify sustainable development.”
So will the Minister today accept that cross-party recommendation and set out a timeline for progress?
The wellbeing economy is not just a brilliant idea; it is already being implemented in the UK and around the world. At local, national and international level—beyond Westminster—the green shoots of a new economic paradigm fit for the age of climate emergency are already emerging. In the short time that I have, it is impossible to mention more than a fraction of the researchers, campaigners, practitioners and others who make up the movement for a new economy, designed to serve people and planet—from community wealth building to the Doughnut Economics Action Lab.
The wellbeing economy is one example. It is being taken forward by the Wellbeing Economy Governments partnership, a collaboration of, so far, five national and regional Governments. In Finland, the world’s youngest Prime Minister, Sanna Marin, heads up a Government who are outspoken on the principle that,
“Economic growth is never an end in itself and well-being is not just an item of expenditure for public finances”.
In Iceland, indicators for wellbeing guide Government decision making. Scotland has a national performance framework centred around wellbeing, and with Greens now in government we can expect even more leadership on the post-growth wellbeing economy. Wales has the first ever Well-being of Future Generations (Wales) Act, a version of which many of us have been championing in this House as well, and New Zealand is home to the world’s first ever wellbeing budget and a Finance Ministry that uses a living standards framework to shape all economic policy making.
Those nations are working together to share expertise and advance a shared ambition to build wellbeing economies. Will the UK join them? If the Minister cannot quite commit to that, will she at least commit to carrying out a major review of what the Wellbeing Economy Governments partnership is doing, and the benefits of the Treasury taking a similar approach, ideally in time for the next Budget to be the UK’s first wellbeing Budget? As a first step, the UK’s first wellbeing Budget could swap the focus on GDP and change it for GDWe, or gross domestic wellbeing, as developed by Carnegie UK. No one is saying that untangling our growth addiction is simple, but we can no longer delay. As the economist Kate Raworth puts it, we need to create
“economies that make us thrive, whether or not they grow”
rather than having economies that grow whether or not they make us thrive.
Drawing to a conclusion, I want to quickly share some views from members of the public on the topic of today’s debate. They were gathered via a survey over the weekend, thanks to the parliamentary digital engagement service. It has had more than 1,000 submissions and shows how severely our current economy is failing on the basics. Hazel, for example, wrote about what a wellbeing economy could prioritise. She suggests:
“Ensuring everyone’s basic needs are met, including any additional needs resulting from disability. Such needs include access to healthy food, safe, warm homes, and access to health care (both physical and mental). Nobody in the developed world should need to rely on food banks.”
Natalie wrote:
“Aiming for constant financial growth cannot be sustained on a planet of finite resources…The health and well-being of our shared planet and all beings who reside here should be our priority. The way and extent to which we care for it and for each other should be key. Wastefulness should be seen as the loss that it truly is. Ecology and economics should not be at odds; the words both derive from the concept of looking after our home.”
The responses are another sign that, far from delivering on the famous “people’s priorities,” as the Government like to say, the Treasury is completely ignoring them by sticking to an outdated and dangerous fixation on economic growth. It is time for global Britain to become a global leader, fit for the age of climate emergency, rather than a laggard in a shift to a wellbeing economy. For the sake of climate justice today and for the lives of future generations, I look forward to the Minister’s response and to working with Members across the House to prove that another economy is not just possible; it is on its way.
“The economy is a means to an end, not an end in itself. It is an economy which regenerates nature, an economy where collaboration trumps competition, an economy where activities and what organisations do is purposeful, not simply just to make money. In which individuals’ desire to be acknowledged for meaningful contributions with a decent living is not dominated by a motivation of acquiring wealth. And which is financed by a stable, fair and socially useful financial system that serves the real economy for the long term.”
I hope that today’s debate is just the start of a long overdue conversation about what that really means in practice: from finding a new way of measuring the economy’s performance away from the distribution-blind GDP and towards indices of wellbeing, through to ensuring the economy distributes wealth more fairly, provides stable and sufficient incomes, supports socially and environmentally useful enterprise and, importantly, ensures the ownership of economic assets is shared more widely and democratically with workers and communities.
Ultimately, the Government are not a mere economic spectator here. They have the power to implement that change. As such, the debate goes to the very heart of what we think the sole purpose of Government is. Are they the caretaker of a broken economic theory that preserves wealth for the few, at the expense of the many, or are they the engine that drives the economy to deliver health and wellbeing for all? In Salford, we know the answer to that. We say the welfare of the people is the highest law.
It strikes me as self-evident that adding a wider set of criteria to the public sector consideration of expenditure can lead only to better outcomes. Likewise, I am very drawn to the Carnegie UK Trust’s idea of a gross domestic wellbeing index as a way to benchmark actual progress. About 300 years ago I proposed to the SNP conference that Scotland should adopt a Nordic-style wellbeing index to benchmark the progress of society against other comparable countries—and here we are 15 or so years later.
I close with one very concrete example, which shows that this is not an esoteric, niche subject but aimed at bringing about real change in the real world. Bus services in Stirling and the Forth valley are not fit for purpose. They are not up to scratch. They are not as reliable as they need to be. Bus services are not in my remit, as a Member of this Westminster Parliament, but I see that systemic change is necessary, because we are looking at the wrong outputs and outcomes. There is too little public funding available to support the bus network that we need. However, how many people have to have a car but would not have one if they could rely on buses? How much unproductive capital is tied up in those vehicles? Think about how many carbon emissions we could get rid of if the bus services were reliable. Think about the lost economic productivity of the people who cannot afford cars but cannot get to work either. If we change the metrics, we change the outcome.
As we have heard, the Scottish Government have started that work. The Scottish national performance framework brings in a wider set of criteria. There is the Wellbeing Economy Alliance with Iceland and other small countries. We are already doing this work, and we can do much more. That is not to say that the UK cannot do more too. I look forward to hearing from the Minister; she could have positive engagement and support if she actually took serious steps in this direction. Fair work must also be properly considered in this equation, and we must ensure that the new jobs are good jobs, fair jobs and well-paid jobs. If we grab this at the flow, there is a big prize that we can all share.
It is important that I share some of the socioeconomic background of my constituency of Cynon Valley. It is an old mining community with high levels of unemployment and some of the highest levels of poverty and ill health in Wales. The pandemic exemplified this in the high number of deaths from covid—the third highest in the whole UK—which is what drove me to do the research that I have just mentioned.
We have many dangerous coal tips, with the risks exacerbated by recent frequent heavy rain and flooding, which are a direct consequence of climate change. Increasingly, people are realising that we cannot improve the wellbeing of people without tackling climate change. Creating a society that meets the needs in my constituency will be challenging, but it is the very reason why I am so passionate about working alongside others to promote and develop a socioeconomic system that puts people and the future of our planet before profit.
My experience—from discussions with local people and agencies through to all my local activities—has shown me that, given the right approach and investment, it is possible to do things differently to meet the needs to ensure the future of the planet and the human needs of the people and communities we have been elected to represent. That is my vision for Cynon Valley, and it is shared by so many and is achievable. It is an urgent vision. If we are serious about ending poverty and inequality in our society and about ending the destruction of our planet and our natural environment, we must act now to turn theories into practice and campaign together for a different kind of society. Yes, we can do things differently.