‘Wellbeing' isn't a joke – it's a tool for tackling populism

The Guardian

22-03-2025

Last week's International Day of Happiness lives on. Not so much in the US, where the chaotic uncertainty engineered by Donald Trump and his Project 2025 supporters is creating misery, and not just for the public servants fired or suspended from their jobs.
It might also be difficult to see how the goal of happiness is rated in Whitehall when the UK sits only one place above the US in the United Nations' annual world happiness index. The UK slipped from the 20th most happy country to 23rd in this year's index, while the US dropped one position to 24th, both well behind the Nordic countries, which lead the world, and many ­others including Mexico, Australia and Belgium.
It would be wrong, though, to put the UK in the same bracket as the US because the Treasury – often considered among the more hard-hearted of bureaucratic organisations – is on a very different journey to the course being set in Washington.
While Elon Musk is busy tearing through USAID and Trump is waving executive orders that dismantle the education department, the UK finance ministry has committed to include wellbeing, for which we can substitute the word happiness, when judging the benefits of public spending.
In the vicious budget fight going on at the moment in Whitehall over the three-year spending review, departmental chiefs are supposed to stop, smile and for the first time show how their policies will impact the wellbeing of recipients and the nation. In this respect, the UK will be leading the world.
How well this task will be performed is a concern for anyone who has worked inside Whitehall.
There will be plenty of civil servants who consider wellbeing a woolly term, especially in the militaristic upper echelons of the public sector, where mental health days and stress workshops are considered laughable diversions, and, if they are embraced, act as a figleaf over a debilitating, 19th-century command-and-control management structure.
There will also be opposition from those who consider well­being a diversion from the central task of sparking the UK economy back into life with a 'whatever it takes' growth agenda.
It would be easy to adopt a cynical attitude – one that highlights the welfare cuts expected to play a major role in balancing Rachel Reeves's budget and asks how they will affect the wellbeing of benefit recipients.
That would be easy – and wrong. As Professor Richard Layard says, there is hard data for Treasury officials to get their teeth into if they need to be convinced of wellbeing's importance.
Layard, an eminent economist at the London School of Economics, believes happiness has 'never been more important'. 'As this year's World Happiness report shows, unhappiness is the main cause of populism, which is the scourge of our era,' he says. 'By contrast, in Britain the spending review process offers hope, since it explicitly targets wellbeing.'
One of the most interesting chapters in the report is written by a group of French academics, showing how populism can be explained, not by economic conditions, but by a broader sense of wellbeing in the population.
According to Layard, it has long been known that whether a government gets re-elected depends more on the life satisfaction of the people than on the state of the economy. That may be, but, for policymakers, having some recent evidence could be the spur they need to take action.
For instance, in the US, there is a link over the past decade between steadily declining life satisfaction and voters changing party in each presidential election.
The remarkable performance of the US economy should correlate with high levels of satisfaction in incumbent presidents and Congressional representatives. Not a bit. Similarly, in Britain, high historical levels of life satisfaction in 2019 led to the Conservatives being re-elected while low levels of satisfaction in 2024 led to their defeat.
'So it's not 'the economy, stupid', it's 'wellbeing, stupid',' says Layard.
In 2020, the Treasury green book of spending guidance was revised to include an assessment of all benefits, psychological as well as financial. In the spending review, wellbeing coins will be allocated and then converted into money to indicate whether policy initiatives should go ahead.
But as Layard and the French academics – led by President Macron's confidant Yann Algan, from the Paris business school HEC – say in the report, the message is broader.
The research shows that when people are dissatisfied with their lot and lack trust in their fellow citizens, they become rightwing populists, while people who are dissatisfied but trust their fellow citizens become leftwing populists.
Reeves will be concerned about keeping the government's finances on track in the spring statement on Wednesday, and might delay policies promoting wellbeing if they are seen to cost money. The evidence is that this would only feed Nigel Farage's Reform party, and possibly leftwing splinter groups. Labour needs to avoid this outcome.