A better way to measure the UK’s health and happiness

Your editorial rightly points out that GDP is not a good measure of how people are faring (19 June). As an alternative, you offer the UN’s human development index. But we already have a better British alternative – the measure of life satisfaction in the Office for National Statistics’ annual population survey.

The question asked is: “Overall, how satisfied are you with your life these days (0: not at all satisfied, 10: completely)?” The results are published every quarter. That is an excellent measure of the nation’s success. It provides a good account of how we are doing on average and of the degree of fundamental inequality in our society.

It should become the objective of government policy to maximise wellbeing, measured in this way. As Thomas Jefferson said: “The life and happiness of the people ... is the first and only legitimate object of good government.” And Keir Starmer has said that “with every pound spent on your behalf, we would expect the Treasury to weigh not just its effect on actual income but also its effect on wellbeing”. So let us hope that the new government will judge all its policy options by their effects (per pound spent) on the life satisfaction of the population.
Prof Richard Layard
London School of Economics

• The Guardian is correct to agree with the late Robert Kennedy, who said in 1968 that growth figures measured everything “except that which makes life worthwhile”. More than 50 years later, it is important to recognise that a thriving economy makes an important contribution to the UK’s collective wellbeing. But GDP remains a poor measure of social progress. It measures criminal activity, but not caring responsibilities, and takes no account of the impact on public health or the planet.

That is why the next government should ground its decision-making in a wide range of statistics that measure our collective wellbeing. Ministers need to complement GDP data with a broad basket of figures about the reality of our lives and our impact on the environment.

In 2023, Carnegie’s Life in the UK Index revealed yawning gaps in wellbeing between different groups in society. Only when similar datasets are used to underpin policymaking will governments have any hope of properly tackling the biggest problems of our time.
Sarah Davidson
Chief executive, Carnegie UK

• While it’s true that the public don’t necessarily understand what GDP means, many politicians and journalists don’t seem to know how GDP is calculated. As the economist Richard J Murphy has pointed out, “10% of GDP is made up”. When calculating GDP, the average cost of renting is used to figure out how much money owner-occupiers would be spending if they rented rather than owned their homes. This is called “imputed rents” and it accounts for around 10% of GDP.

But does it make sense to call rent a productive part of the economy? If all landlords raised their rents massively, this would appear on GDP as “growth”, when in reality, no new goods or services would have been produced. It’s the same with private equity – if a financial investor buys and then asset-strips a company, this will appear in GDP as “growth”. But again, nothing has been produced, and therefore highly unproductive economic exchanges can appear in the GDP statistics as “productive”.

Looking at GDP in isolation is in practice about as useful as relying on the position of celestial bodies to tell you about your love life.
Ethan Oshoko
St Leonards-on-Sea, East Sussex

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