Climate Goals: Wellbeing Economy

– in Westminster Hall at 4:48 pm on 30th November 2021.

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[Relevant document: e-petition 580646, Shift to a Wellbeing Economy: put the health of people and planet first.]

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee 4:58 pm, 30th November 2021

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.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

I beg to move,

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:

“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.

Several hon. Members:

rose—

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy) 5:11 pm, 30th November 2021

I am delighted to be called to speak first after 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.

Photo of Rebecca Long-Bailey Rebecca Long-Bailey Labour, Salford and Eccles 5:14 pm, 30th November 2021

It is a pleasure to serve under your chairmanship today, Mr Betts. I thank 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

“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.

Photo of Alyn Smith Alyn Smith Shadow SNP Spokesperson (Foreign and Commonwealth Office) 5:17 pm, 30th November 2021

It is a pleasure to serve under your chairmanship, Mr Betts. It is also a great pleasure to support 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.

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.

Photo of Beth Winter Beth Winter Labour, Cynon Valley 5:22 pm, 30th November 2021

I thank 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.

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.

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party, Belfast South 5:26 pm, 30th November 2021

I thank 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.

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.

Photo of Clive Lewis Clive Lewis Labour, Norwich South

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?

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party, Belfast South

The hon. Member is absolutely right. We have proven that the theories he outlines, which are supposed to be in place, have not worked, and that our economy has not worked. The kind of model that he suggests, which allows people to flourish, is desirable and achievable.

As with addressing climate breakdown, we know what has to be done; we just have to decide to do it. While it is tempting and valid to protest and rage against the machine on this, it is very encouraging to see some of the practical initiatives that people are taking across their constituencies and in other regions. I pay tribute to groups such as the Carryduff Regeneration Forum, the Conservation Volunteers, Open Ormeau, Repair Café Belfast and many others in my own corner of the world who are showing what is possible when people try to slow down, clean up and build cohesion, and what is possible through care, education and creativity.

Northern Ireland is among the most nature-depleted regions in the world. Currently, we have no binding environmental targets, no environmental protection agency and no coherent plan to address that. We do not even have any certainty that the Assembly will stay up long enough to pass the Climate Bill that the Green party, my own party and others are bringing through at the moment.

Members have outlined some of the many solutions that are in place and some of the Bills that are currently working through that can help us achieve environmental and generational justice, because the impacts on future generations are very real. We need to be real about the possibilities and limitations of green growth and rescue technologies. As Clive Lewis outlined, some of these have been demonstrated to not necessarily have the solution to all our problems.

We need to embrace lower labour productivity at times, and accept that long hours and low-reward jobs, where people are working just to stand still economically and consume, are not good for them or for the planet. We also need to encourage reporting of non-GDP measurements. The ONS records these, but we do not use them and they do not get reported in the media, and we know that, unfortunately, what gets reported, gets done.

Members have rightly referenced initiatives in New Zealand, Scotland and Wales, and I look forward to hearing from the Minister how the UK Government as a whole intends to step up in this regard.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport) 5:31 pm, 30th November 2021

I am grateful to Caroline Lucas for this hour to reflect on a different economic model—an hour that should pivot the wanton greed of state to one of restoring the scars of its heritage.

Leaving Glasgow with our planet heating at a dangerous rate and the failure to slam the brakes on climate destruction, the Government were given a year to reset. COP27 will be their reckoning. Right now, the global south is paying for the exploits of the global north, and this generation is paying for centuries of colonialisation, industrialisation and exploitation, as people and planet were exploited, minerals, crops and humanity were exploited, and carbon and hope were burnt. In this generation, it is our duty to restore. We have no choice.

Kate Raworth’s work on doughnut economics shows us a path out. York Central development, at the heart of my constituency, could be the first doughnut development, where we see the planned luxury apartments becoming sustainable housing that meets need. We could see that site being car free, wellbeing communities being built and a carbon negative future with our green new deal.

As I set out in my Adjournment debate last week, York is seeking to lead. Our green new deal, BioYorkshire, will create 4,000 green-collar jobs and upskill 25,000 people as it takes 2.8 million tonnes of carbon out of our atmosphere and repurposes 1.2 million tonnes of landfill. With research and development of new precision-farming agricultural practices, it is the point where international development will meet international trade. While partners from the University of York, Askham Bryan College and Fera Science have reached out into the region, it is my hope that this green new deal will reach out across the globe, such is the power of its science.

It is this project that will put pride back into my community—one that to this very day celebrates the Rowntree legacy of integrating good business with good employment and social practices. In parallel, York has developed the good business charter. I hope that the Minister is aware of the charter, supported by the CBI and TUC, as it sets out 10 principles, including a real living wage, employee wellbeing, environmental responsibility and ethical sourcing, resetting the terms for business, the economy and workers. Different parts of the economy should not be able to choose whether or not they opt into those initiatives. We need a comprehensive refocus. Labour in Wales was the first in the world to introduce a wellbeing Act—the Well-being of Future Generations (Wales) Act 2015—and the rest of the UK must now follow. Instead, this Government’s mantra seems to be, “Always need to take, not restore”, and that must be reversed.

Just imagine if those principles had been embedded in our approach to the covid-19 vaccine. We would not be debating omicron today. Given that the west has hoarded and destroyed global vaccine supplies—and taken at least three vaccines for each of us—the vaccine rate in developing countries is just 3%. For the sake of profit for big pharma, this Government are prepared to sacrifice the global south. However, in this interconnected world, we too will fall prey to a virus that does not play by the rules. That is why we need to change the rules that govern us. It may not be omicron that calls us short—it may be the pyro or sigma variants.

This is about moving from a mindset of economic nationalism to one of responsible internationalism. The Government were sent to Glasgow to keep the idea of 1.5° alive, but it is now in critical care. Everything must be injected into rehabilitating our economy. The cost of not doing so will be fatal.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

I thank hon. Members for keeping to time in this debate. We can now move on to the Front Benchers. First, I call Patrick Grady for the Scottish National party, who has five minutes.

Photo of Patrick Grady Patrick Grady Scottish National Party, Glasgow North 5:35 pm, 30th November 2021

Thank you, Mr Betts, for calling me to speak, and I apologise to the Chamber that I was a couple of minutes late for this debate and so missed the opening remarks of Caroline Lucas. I warmly congratulate her on securing this debate and on setting out the substance so clearly, which has been echoed by all the Members who have been able to speak in the time available.

It is disappointing that there were no speeches from Government Back-Benchers, because—and I will say a bit more about this at the end of my remarks—this is not an ideological debate. This is about how we frame, or reframe, the debate. Very few people, and I believe that includes most Government Members, come into politics wanting to impoverish people or increase inequalities. The debate is really about how we get there and achieve a better society, which I hope is an aim that we all share.

One of the key points about the wellbeing economy and reframing the debate is how we measure what matters. My hon. Friend Alyn Smith said that and it was also echoed by the First Minister of Scotland when she gave a TED talk on this very subject back in 2019. Measuring what matters will help us to reframe the debate and reset the things that we are trying to achieve by the policies that we all want to put forward.

That is particularly important in the context of the conference of the parties and meeting climate goals, as the title of the debate suggests, because at the end of the day the costs of climate change will have to be paid for. It is a bit like covid-19: we are going to have to pay for climate change. We can either pay for it now by taking action to mitigate the damage that has already been done and adapting to the damage that is coming down the line, or we can pay for it later, once our cities are under water and there is even greater human displacement because parts of the world become unliveable.

We have been speaking in this debate today about future generations. I cannot recommend highly enough “The Ministry for the Future”, a book by Kim Stanley Robinson, which deals with an awful lot of those challenges. We also face not an ageing population per se but a longer-lived population and the risk that brings of increasing inequalities. That has to be tackled, and reframing the debate through a wellbeing approach is one of the most effective ways in which we can do that.

Rebecca Long Bailey spoke about my constituent, Dr Katherine Trebeck, who really is a leading thinker on this matter. She talks about cornerstone indicators of how we can measure progress in society. The number of girls who ride a bike to school should be, and can be, a measure of achievement in society. It sums up the many things that have to go right—all those different things that lead to young girls being able to cycle to school, whether in this country or in sub-Saharan African—and it brings many benefits. That would be a demonstration—a real indicator —that we were using our wealth, knowledge and resources effectively, and that we were meeting the goals that will bring about a better society.

Scotland is buying into this. We can go further. We have heard about the relationship that has been established with the Greens, which I warmly welcome. My hon. Friend Kirsty Blackman talked about what Scotland could achieve if we were an independent country and had all the powers at our hands. Nevertheless, the national performance framework has been in place since 2007. There are 81 different national indicators that reflect the values and aspirations of the people of Scotland. They are aligned with the sustainable development goals of the United Nations and are there to help to track progress in reducing inequality. Scotland was a founding member of the Wellbeing Economy Governments partnership, which was founded in 2018 and continues to grow. It met during COP26 precisely to progress those goals.

That is why I emphasise to the Government that this is not ideological per se: it is a challenge to both the traditional left and the traditional right. If we agree that the aim is to reduce inequality, to improve wellbeing and to meet climate goals, we can have a debate about how best to do that. Perhaps there is an argument for the free market, for the leveraging of capital, for innovation and entrepreneurship; perhaps there is a greater role for the state and the investment of public money, goods and resources. That is the clash of ideas, but this is changing the goal that we are heading for, because infinite growth on a finite planet simply is not possible.

I encourage the Government to take this on and to look at what other ambitious countries around the world and their own devolved institutions are doing. If they are not prepared to do that or to follow along with the devolved institutions, we will see continued divergence, and that will only help the cause of Members such as myself in the Scottish National party, and those who want to see further devolution and ultimately independence. The Government must get into a 21st-century mindset, and that means leaving 19th and 20th-century ideas of unlimited growth as the only measure of success far behind.

Photo of Pat McFadden Pat McFadden Shadow Chief Secretary to the Treasury 5:41 pm, 30th November 2021

Thank you for your chairmanship today, Mr Betts. I begin by congratulating Caroline Lucas on securing the debate and thank all the hon. Members who have taken part over the past hour or so.

The debate on the relationship between wellbeing and the traditional economic growth measure of GDP has been going on for a long time. We welcome an emphasis on wellbeing and on not measuring everything purely by traditional economic statistics. As we have heard, there are deficiencies in GDP. For example, it tells us nothing about equality or the level of social inclusion in a society. That is what it does not include, but it does include things we might not want to include, such as measures of waste or of throwaway goods that are bad for our environment.

As a material measure of output, GDP is certainly not the same as general happiness. That is why in my party, for example, my hon. Friend Alison McGovern has argued that the Office for National Statistics should measure health and happiness through a healthy living index. We have heard about what the Welsh Labour Government are doing, putting wellbeing at the heart of their thinking.

As we transition to a cleaner and greener economy, we will want to take into account other things, most obviously the sources of our energy and how renewable they are. We will want to ask different questions—not just, “What did you produce?” but, “How did you produce that?” All that will have to be a greater part of our economic thinking. We do, after all, have only one planet, and we have a duty to cherish and preserve it for future generations.

This debate also forces a discussion on not only the costs of acting, but the costs of not acting. The Office for Budget Responsibility report earlier this year was very clear on that point. If we delay taking the necessary action on the transition to net zero, it will not make the costs disappear. Instead, it will increase them in the longer run, adding to our debt and our deficit, and loading further costs on the taxpayer. That is why Labour announced at our recent conference a commitment to investing in this transition year on year for a decade.

That commitment will help to ensure that the homes we live in are heated in a sustainable way. In so doing, it will create many jobs, reduce people’s heating bills and make a material contribution to the wellbeing we have heard about today. We will also want to invest in the charging infrastructure for low-carbon transport, and many of the other changes we need. That is what we want to do.

Let us not be entirely dismissive of GDP and the importance of economic growth. For the past decade, we have had, as it were, a real-world experiment in what it is like to live through low growth. We have high taxes now because economic growth has been low. That anaemic growth over the past decade means that we are a less prosperous country than we would have been had we had higher growth rates—for example, the kind of growth rates that we had in the first decade of this century. That has borne down on real incomes and on public services and their capacity to improve wellbeing.

Low economic growth over the past decade has adversely impacted on the quality of life in places such as Wolverhampton, which I represent, the Black Country and many other parts of the country. It has left the public square impoverished and degraded. In arguing for a broader view, we should not make the mistake of thinking that low growth or no growth is a good thing. The experience of low growth over the past decade suggests that that is very much not the case. I am all for a broader definition, I am all for greener growth, but I also want to see prosperity in every part of the country.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

Minister, you have 10 minutes, which will leave a couple of minutes for the mover of the motion to wind up at the end.

Photo of Helen Whately Helen Whately The Exchequer Secretary 5:46 pm, 30th November 2021

It is a pleasure to serve under your chairmanship, Mr Betts, and to answer the debate on behalf of the Government. I congratulate Caroline Lucas on securing a debate on an issue about which she cares deeply and speaks eloquently. I thank other hon. Members for their thoughtful contributions to what has been a good conversation in this Chamber.

I hope that it will not come as a surprise to hon. Members that this is a subject that the Government take seriously and that, as a Treasury Minister, I care about deeply. Much of what we are doing in fact aligns with a wellbeing economy approach. More than that, as a Government, we are clear that the wellbeing of our citizens and the natural environment is a priority as we work to deliver our world-leading climate goals.

Given the topic, this has been a wide-ranging debate. In answering it, I will talk first about how we are already thinking differently about wellbeing and the economy, and then about how we are acting differently, based on that new way of thinking. To be clear, the Government are already taking steps towards a broader understanding of progress and GDP growth. Rather than simply measuring our success in conventional economic terms, we are increasingly focusing on a range of measures, including reductions in carbon emissions, improvements in air quality and increases in skills, among other things.

As a Treasury Minister, however, it would be strange for me not to argue that a traditional economic metric such as GDP remains important and useful. I think that the shadow Minister, Mr McFadden, and I are probably in agreement on that. Nevertheless, GDP has its limitations. It should not be seen as an all-encompassing measure of welfare, which it was never designed to be, and nor is it an end in itself, as several hon. Members have said.

The Government fully supported the recommendations of Sir Charles Bean’s 2016 independent review of economic statistics, which acknowledged some of GDP’s limitations. We are committed to broadening the range of metrics that we use to measure welfare, including better accounting of human capital.

We provided the Office for National Statistics, for example, with an additional £25 million to improve UK economic statistics, including through the Beyond GDP initiative, which aims to develop new and broader measures of welfare and activity, such as a suite of personal wellbeing measures that better account for unpaid work, and estimates for human capital. I heard the hon. Member for Brighton, Pavilion say, “Don’t talk about the ONS”, but I assure her that ONS work on measuring natural capital is ongoing.

We have updated the rules that we use in the Treasury, as set out in the Green Book, to guide individual spending decisions. Those rules already take into account much more than the direct effects of GDP, including estimates of wider economic, social and environmental benefits. This year we introduced to the Green Book new guidance for considering wellbeing in detail as part of policy appraisal.

Several hon. Members have spoken about valuing nature and natural capital. The Government agree unambiguously with the central conclusion of the Dasgupta review that nature and the biodiversity that underpins it ultimately sustains economies, livelihoods and wellbeing. We also agree that only by accounting for the natural environment can we have a more complete view when balancing social, economic and environmental considerations in decision making. In other words, we know that natural capital matters and we are factoring it more and more into our thinking.

In response to the Dasgupta review, the Government are working to deliver a nature-positive economy so that we can be the first generation to leave the natural environment in a better state than we found it. Let us not underplay the significance of that. It is a genuine paradigm shift, and it is being put into action through the Environment Act 2021, including mandating biodiversity net gain for development to make sure that much needed development does not come at the expense of nature. That is why we have been working with the ONS to improve the way in which nature is incorporated in our national accounts, providing funding to explore improvement in its natural capital estimates to improve their relevance to policy making and through the consideration of a broader measure of economic activity than is currently captured by GDP. The recent spending review made investments to improve our understanding of the country’s natural capital with £140 million of funding to map the extent and condition of the country’s natural habitats.

Clearly a big part of our work in this area relates to efforts to tackle climate change by achieving net zero, which is part of my brief at the Treasury. The UK’s comprehensive legislative framework for tackling climate change, which revolves around setting carbon budgets, shows clearly how factors other than GDP sit centrally within our economic policy. That approach has been a success. Between 1990 and 2019, under Governments of different colours, the UK has reduced its greenhouse gas emissions by 44%, faster than any other country in the G20. Since March 2021, the Government have committed to invest £30 billion in our green industrial revolution. That spending, along with action on regulation and green finance initiatives, is about keeping the UK on track for our carbon budgets, establishing our long-term pathway towards net zero by 2050.

There has been widespread agreement in the Chamber about acting sooner rather than later on climate change, and specifically acting to prevent future climate change and investing to that end. I agree with Alyn Smith that it is not a choice of either growth or the environment—it is not either/or but both. Our transition to net zero is a growth opportunity in itself. We expect to see hundreds of thousands of new jobs in the green economy. Not all growth includes consuming finite resources; doing things better can also boost GDP.

We also want new jobs to be well paid. That is absolutely part of our vision. We are aiming for a higher paid, higher skilled economy. I disagree with Rebecca Long Bailey who said that growth means nothing to a struggling family. I disagree. Growth does matter. If we have a shrinking economy, a struggling family is less likely to have jobs, less likely to see their income go up, less likely to see improvements in their standard of living and less likely to have the opportunity to come out of poverty. Growth means more jobs. It means higher incomes. It means the opportunity for people’s wellbeing to improve.

As I said at the beginning of this debate, this is a wide-ranging issue, but I hope hon. Members will recognise that the Government are taking a comprehensive approach. I recognise that sometimes Ministers can fall into a trap in such debates by delivering a long list of policy actions, but I would say that our actions really do speak as loudly as any words. I know that the hon. Member for Brighton, Pavilion and other Members who have spoken today care deeply about the issues, but so do the Government.

On the specifics of the debate, our objective pure and simple is an approach that gives us the very best chance of meeting our climate goals in a way that maximises wellbeing for all—in fact, overall improving the wellbeing of the population of this country. We are thinking differently. We are acting differently. We are investing differently. We do indeed want to do that collaboratively, including by working closely with hon. Members across the House.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion 5:54 pm, 30th November 2021

I thank everyone who has taken part in the debate; I really appreciate it. I have been struck by how well Scotland, Wales and Northern Ireland have been represented in it. I regret that there have not been more speeches from Government Members, because debating the purpose of our economy is surely the most important thing we could be doing. We will have big debates about how we get to the outcome that we all agree we want, but it is rather strange that there are not more people here from the Government side to have that debate.

I appreciate the Minister’s warm words, but there is a vast gap between what she is saying and what the Government are doing. Let us take one simple way of looking at this. A report comes out from the Treasury called “HM Treasury Outcome Delivery Plan”. It is the key departmental document setting out priority outcomes and activities. It has just one paltry mention of climate and just one reference to decarbonisation. It makes no mention at all of biodiversity, but it has 17 mentions of growth. The Government are still subsidising fossil fuels annually to the tune of around £12 billion, and there is still on the statute book a duty to maximise the economic recovery of oil and gas.

There is so much to be said in such a short amount of time, but I urge the Minister to look again at what all of us have been saying in the debate. We should not simply revert to the old idea that growth is somehow the best way to address the kind of poverty that Rebecca Long Bailey spoke about. Redistribution is a far more effective way of getting resources to those who need them. It is a convenient myth that if we keep growing the cake, those at the bottom of the pile will eventually get some. Well, they will have to wait a hell of a long time; and by the time they get it, the planet will be pretty much stuffed.

We need to shift to a greener economy right now. This does not have to be a party political issue; it was David Cameron who started talking about gross domestic happiness, and Sir John Hayes has spoken eloquently —and surprisingly—about moving away from the myth of the ever-increasing economy. I ask the Minister to please look at bringing forward new measures of economic wellbeing along the lines of those that many of us have suggested. She could have them alongside GDP, if she does not want to replace GDP.

I say to Mr McFadden on the Labour Front Bench that there is a big difference between having low or no growth in a recession and a planned transition to a more stable, steady-state economy. I urge him to read such books as “Prosperity Without Growth” by Professor Tim Jackson, which absolutely sets out the way forward on this.

Question put and agreed to.

Resolved,

That this House
has considered a wellbeing economy approach to meeting climate goals.

Sitting adjourned.