Time to think beyond the economy – is GDP the right target?

Policy should focus on wellbeing, opportunity and sustainability.

This week David Cameron launched the Big Society bank and sparked a new round of debate on whether "money makes the world go round" or "the best things in life are free". The Big Society is seen by some as a political cover story for cuts to public services but the idea behind it questions whether there is more to society than just the bottom line? Whether the pursuit of happiness is about more than money? Whether doing you bit, gives your life its meaning, rather than the job you do or the things your own?

Given Britain’s gloomy economic climate, the worst unemployment since 1995 and further cuts to public spending in the pipeline, our ‘age of austerity’ seems all encompassing. But back in 1968, Robert Kennedy famously questions whether GDP was the right measure of a healthy economy and of a good society:

The Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.

More than forty years on, politicians are still asking those questions.  A new report published by IPPR today report suggests policy should focus directly on wellbeing and range of the opportunities that people have. It concludes that every effort to rethink economic policy should be motivated by a consideration not only of "what works" but also of "to what ends".

Clearly there are reasons why GDP has remained for so long the primary measure of economic success. Governments have long taken the view that by promoting GDP growth they help a majority of the population achieve better lives. Historically a strong correlation existed between GDP, disposable income and employment. This provided greater access to material wealth; more desirable cars, houses, clothes, and the latest household and personal gadgets. But despite the advances brought about by GDP growth, there is a growing consensus among politicians that GDP on its own is no longer sufficient and our wellbeing does not just come from income, but from a wide range of sources.

On the other side of the pond, significant headway in measuring national wellbeing has been made in Canada with the Canadian Index of Wellbeing. It is an attempt to capture the quality of life experienced by Canadians. Here in the UK, the ONS launched a consultation exercise to find out what really matters to people from the people themselves. This found that family, friends, health, financial security, equality and fairness are fundamental in determining wellbeing. These initiatives should be encouraged and continued so we can identify what matters to people and how best we can directly support these areas.

By targeting wellbeing and opportunity we speak to the wider concerns of the population. We ask how people are doing before we ask how the economy doing? We recognise that there is "life beyond the bottom line" and that worthwhile lives extend beyond what we earn and consume. The big question that remains, is how to conclude a political consensus around wellbeing, opportunity and sustainability?

Amna Silim is a Researcher at IPPR

David Cameron launches The Big Society Capital fund at The London Stock Exchange. Photograph: Getty Images.
Photo: Getty Images
Show Hide image

The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.