Torsten Bell
MP for Swansea West · Labour · United Kingdom
“That is a very important question. We need to make sure that those who will retire in 2050 can look forward to the same kind of comfortable retirements that many—not all, but many—of today’s pensioners enjoy, and the honest answer is that we are not on track for that at the moment. This Government are taking a two-stage approach.”
“My hon. Friend and I have discussed this issue on a number of occasions, and she has been an important campaigner for pensioners in her constituency who have been affected by it.”
“The hon. Member will know that a judicial review claim has been filed, and that we cannot comment on live litigation. There are legitimate views on raises in the state pension age, particularly the 2011 acceleration put in place by the coalition Government, but the investigation that is being considered by the Parliamentary and Health Ser…”
“My hon. Friend is a consistent campaigner on these issues in this place and in our regular meetings, and I always learn something from those conversations. I am not going forward with exactly the suggestion he brings forward, but I agree that there is more we can do, not least to provide clarity for trustees.”
“I am incredibly hopeful that this Government are doing a much better job than the previous Government in supporting pensioners, not only by driving up the state pension, but by getting on with the much delayed reforms to our defined-contribution pension system, which the previous Government left on ice.”
“I recognise the hon. Gentleman’s point, and we need to fund the NHS to stop letting down older generations. Taxes have consequences that affect the whole population, including pensioners.”
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“We have debated this issue quite extensively in recent weeks, and the House will have another chance to do so later today. As I have set out during our debates, representatives of the industry itself have said that it is in the interests of savers to invest in a wider range of assets. That reflects lessons from across the industry—from open defined-benefit schemes, but also from those in the rest of the world, where the lack of exposure of the UK’s defined-contribution schemes to that wider range of assets makes it stand out. We have introduced a reserve measure to backstop the changes that the industry says are needed to solve a collective action problem. I will not try the patience of the House by repeating them now, but the aim is to ensure that savers do not lose out.”
“I thank my hon. Friend for her question. There absolutely are lessons for us to learn from this experience, both related to that particular case, and on the general point about giving adequate notice of any changes to the state pension age; that is the most important lesson, and we are absolutely committed to learning that. On the action plan, that will be focused on state pension age comms, and on complaint handling. We will work closely with the Parliamentary and Health Service Ombudsman on that right away, and I hope to be able to publish that action plan in the coming months. More broadly, we are not waiting for that, but are getting on with action. I am sure that hon. Members will have seen over the last few months the “check your state pension age” campaign, encouraging people to be aware of their state pension age.”
“I welcome my hon. Friend’s question, and he is absolutely right. We have seen progress in the last 15 years; 23 million employees now save into a pension, and that is restarting the business of workplace pension savings in the UK, but the job is not done. It is not done because of the issue that he raises about the adequacy of the amount saved by those who are saving, and because 45% of working-age adults are saving nothing at all. That is why there has been cross-party consensus that we should bring back the Pensions Commission to look at the question of adequacy, and I am pleased to say that its interim report will be published in the coming months.”
“I beg to move, That this House insists on its disagreement with the Lords in their amendments 15 to 24, 27, 30 to 34, 36, 38 to 42, 83 and 88, insists on its amendments 88A and 88C to the words restored to the Bill by that disagreement, does not insist on its amendment 88B to the words so restored to the Bill, but proposes amendments (a) to (j) to the words so restored to the Bill.”
“It can be used only once and lapses entirely in 2035 if not used; even if used, which is unlikely, the entire regime is repealed at the end of 2035. On top of all that, it remains subject to the savers’ interest test, the affirmative procedure and the statutory reporting requirements, both before and after any regulations are made.”
“As the policy is intended to reflect the accord, the legislation would ideally use the same language, so we have tabled amendments to ensure that that is the case throughout the relevant provisions and have retabled the percentage cap with the same wording. I am grateful to the hon. Lady for pressing that point last week. Let me be clear that the House today is being asked to consider a reserve power that is highly constrained and narrowly focused on solving a very specific problem. It is capped at the accord targets and provides for absolute neutrality among private asset classes. The Government cannot direct investments. The power explicitly applies only to main default funds, more explicitly matching the language used in the accord. The power’s timeline also matches tightly that of the accord.”
“That goes beyond the sunset clause I have just described and means that even if the power has been used, the entire framework and any requirements on schemes will fall away at the end of 2035. This timeline reflects the fact that once the cultural shift has occurred and the impacts of the Mansion House accord are embedded, the collective action problem falls away. At that point, other elements of the Bill—greater scale and the impacts of the value for money framework—will help to sustain the change. I want to return to a point made by the hon. Member for Faversham and Mid Kent (Helen Whately) in our previous debate. She observed correctly that the Bill referred to assets held in default funds as a whole, whereas the Mansion House accord applies only to main default funds.”
“As is plain, however, we have not yet reached agreement across the two Houses. Rather than simply restating our position today, the Government are bringing forward a further package of changes. First, we are bringing forward the current sunset date for the reserve power from 2035 to 2032. The Mansion House accord commits the industry to reaching its targets by 2030, and bringing forward the sunset clause aligns the power more closely with that timeline. If the power has not been exercised by the end of 2032, it falls away entirely. Secondly, because the power has only one purpose, we are providing that it may be exercised only once. Thirdly—I want the House to understand the significance of this—we are providing for not just the power but any effects of it to fully fall away at the end of 2035.”
“That is not a theoretical risk; it is exactly why so little progress was made against the Mansion House compact under the last Government. The reserve power exists for the sole purpose of solving this problem. Last week, we brought forward changes to make that absolutely explicit by writing the industry-set Mansion House accord targets into primary legislation through the 10% and 5% caps, and requiring any regulations to operate neutrally across asset classes. These were designed to make it clear in the Bill that the power can be used only in line with what the industry itself has committed to. The cap prohibits any move beyond the accord targets and the neutrality requirement rules out the possibility that any Government could direct investments into a particular asset or asset class.”
“Last week I set out the Government’s case for such a power at some length, and I will spare the House a full repetition today— [ Interruption. ] I know, I know, but there is so much more to discuss. We will not have time to discuss the hair of the hon. Member for Wyre Forest (Mark Garnier) if I offer a full statement. In brief, since hon. Members have asked, there is a well-evidenced collective action problem in the defined-contribution pensions market. Providers want to diversify their asset allocations in their members’ long-term interests and in the interests of better pensions for savers, but they are clear publicly—and even more emphatically in private—that market dynamics, which focus on minimising cost rather than maximising long-term value for savers, are the single biggest barrier to doing so.”
“I thank Members and peers for the continued scrutiny of the Bill before us. Our task today is to focus on the limited outstanding areas of disagreement, although that should not detract from the consensus behind this Bill—behind the case for a better pension landscape that sees bigger, better pension schemes focused on delivering stronger returns for savers. On the issues that remain before us, I hope that Members and peers will see that we have listened to the points they have raised and brought forward amendments that directly address what we have heard, while of course holding to the core principles of delivering against the Labour manifesto, which was clear on our policy intent around scale and productive investment. First, I turn to the reserve power on asset allocation.”
“It would also be unworkable in practice, as it would enmesh regulators in years of legal proceedings while leaving providers and savers in limbo. However, I have listened to the argument made in this House and the other place that the innovation some smaller schemes offer members should not be dismissed. I absolutely agree, which is a key reason our approach to ensuring that scale is achieved has been so pragmatic.”
“We all made those arguments, recognising that moves towards scale would always mean some schemes exiting the market because we collectively prioritise the need to deliver for those who work hard to save for retirement, and we must ensure that they are saving into schemes that can deliver better outcomes. Scale drives lower costs, better governance, investment expertise and a balance sheet that can provide a more diverse portfolio for savers, improving overall outcomes for them in the longer term. That focus on scale was explicitly laid out in our manifesto, and the evidence for the approach we are taking was detailed in the pensions investment review. The Lords amendment pays too little regard to that evidence and that manifesto.”
“That reflects that our ultimate focus is, of course, on delivering the best outcomes for members, of which competition in the market is one important driver. Under the Government’s amendment, regulations must have regard not just to scale, but to competition and innovation, alongside effective governance. The explanatory notes will make that clear. On Lords amendment 37B, the case for scale has been made, and both Houses have broadly agreed with the benefits that it brings. Indeed, all main parties are on the record as recognising the key role of scale in delivering better outcomes for savers.”
“The same goal is reflected in a scheme’s ability to open new default arrangements. However, we have heard the arguments that have been made during debates, and I recognise the desire in the other place to see that commitment in the Bill. This is why I have tabled amendment (b) in lieu of Lords amendment 35B. It sets out that the Secretary of State, in setting regulations in respect of both the scale measures and those relating to default arrangements, must have regard to the importance of competition and innovation. The amendment in lieu delivers on the proposals from the other place, but with an appropriately holistic approach to the issues to which a Secretary of State will need to have regard in the years ahead.”
“The Government have listened to the concerns raised in the other place, and have responded not with warm words but with real concessions, through changes to primary legislation that directly address the arguments made. I hope that MPs and peers will now accept that the Government have moved significantly and provided the assurance they have been seeking. Lords amendment 35B would require the Secretary of State, when making regulations across the scale measures and those for default arrangements, to have regard to “the benefits of competition among providers of pension schemes”. The Government of course support the importance of competition as the market moves towards scale, and have done so in the Bill’s provisions. The market is already highly competitive, and the new entrant pathway is designed to ensure that it remains so.”
“I understand that some Members of this House and the other place would prefer it if the power did not exist at all. I respect that view, but I do not share it. The evidence for the collective action problem is clear—we have lived it—and I have listened but heard no alternative proposal to address it. The consequences of not addressing it fall on pension savers—the people who rely on their defined-contribution savings for a comfortable retirement. That is not a risk that the Government are prepared to take. The elected House has now considered this question twice. On both occasions, it has overwhelmingly endorsed the case for the reserve power to deliver our manifesto commitments in this area.”
“I share my right hon. Friend’s frustration about developments in the Lords on those matters, not least because some of those who voted against amendments that would have introduced statutory guidance, as he says, have spent years calling for exactly that—but that is a matter for them. The Government will proceed on work to draft that guidance. The technical working group is well under way and is doing good work to provide clarity to the industry. We will come forward with proposals to put the guidance on a statutory footing in the months and years ahead. As I was saying, the timeline tightly matches that of the accord. I hope that everybody can see that the framework is a long way from the characterisation of this power that we have occasionally heard.”
“That approach is focused on the evidence base, using the Government Actuary to produce impartial numbers to aid understanding and debates on this issue. I hope that Members will have heard our serious engagement with the issues raised by peers and by Opposition parties in this House. We are committed to delivering the policy intent in the Bill, given its crucial role in driving better outcomes for savers and the important place given to these pension reforms in our 2024 manifesto. We have tabled significant amendments to address the specific issues raised, aiming to further reinforce the consensus on the Bill that has been evident since its Second Reading in this House. On that basis, I hope that Members will be happy to support our amendments.”
“We will continue to ensure that accounting and budgetary processes support this. The Government invite the House to accept our amendment (a) in lieu, which recognises the important principle that Parliament, policymakers and the public should be able to see clearly the long-term cost of unfunded public service pension schemes. The amendment requires the Government Actuary to produce within 12 months a document setting out its analysis of the long-term impacts of public sector pensions, covering both expenditure on benefits and income from member contributions. The document must be provided to the Treasury and the Office for Budget Responsibility, and the former is required to make it available to Parliament.”
“The timing of the report, which is required to be published within 12 months, will ensure that the Government are then able to take necessary action in advance of the scale measures being commenced in 2030. On Lords amendments 77 and 85, the Government agree with the points made during the Bill’s passage regarding the importance of transparency around, and clear accounting for, public service pensions. I discussed those issues yesterday with Baroness Neville-Rolfe, who tabled the amendments. I completely agree with her that it is crucial that the future cost of payments from unfunded pension schemes is understood and taken into account in Government decision making. That applies to the Treasury in aggregate, as well as to individual organisations making decisions about the nature and level of staffing.”
“The evidence suggests that the benefits of scale are achieved once a threshold ranging from £25 billion to £50 billion of assets is reached. The scale requirements in the Bill not only target the bottom end of that range—£25 billion—but provide a long timeline for schemes to reach it, especially given that this is a fast-growing market. Smaller schemes require only £10 billion of assets in 2030 to qualify for the transition pathway. To provide further reassurance, I have tabled amendment (a) in lieu of Lords amendment 37B to require the Secretary of State to publish a report about the effects of pension schemes consolidation and the extent to which innovative product designs are adopted or maintained following consolidation activity, as well as any barriers that may exist to preserving those features.”
“As always, my hon. Friend asks an important question. As I have said, the entire focus of the Bill is on ensuring that we drive up returns for savers. I am sure that he has already read all 200-odd pages of the extensive impact assessment, which sets out clearly that we would expect an average earner who saves over their lifetime, in line with auto-enrolment levels, to see higher returns of around £29,000 to their pension pot when they head towards retirement. That is not an inconsequential amount when we want to ensure that future generations can trust the system to deliver them a comfortable retirement in the years ahead. As I was saying, the Lords amendments in this area are unworkable, but we must recognise the importance of innovation. That is why we have taken our pragmatic approach.”
“Members go and look at the investment levels in the national accounts—I know everybody in this room spends their time doing that—they will see that, since the election, Britain has seen the fastest investment growth of any country in the G7. That is what we are starting to deliver against what we set out as our core objective, which is turning Britain back into a higher-investment country. The hon. Member for Wyre Forest mentioned his previous amendment, which asked for the reasons why schemes say the change would be in savers’ interest but have not done it. The problem is that we have had a lot of reviews. The Association of British Insurers has written some and published them, explaining why the previous Government’s attempt with the Mansion House compact did not work. We have the answer; I am afraid the hon.”
“Friend also rightly says—I think this is, again, part of a cross-party consensus—that moving to that high-investment world is overwhelmingly not about pensions, but much wider changes and about making sure that actual investment happens so firms can actually get things built. That is why this Government have come in and provided the go-ahead for solar farms, wind farms, national grid investments and nuclear power stations that have been held up for too long. That is what a higher-investment country looks like and that is what we need to be getting on with, and I have a nugget of good news to bring my right hon. Friend on that. If hon.”
“It is not acceptable that Britain saw both the second-lowest public investment in the G7 and by far the lowest business investment in the G7 under the last Government—and not for some years but for almost every single year. That is the challenge that I think we all want to see addressed. Part of the issue being raised about whether this is about UK assets or private finance is overdone, because what we see around the world is a higher home bias among private asset investments than among public asset investments, for all the obvious reasons about the comparative advantage of different investors in those situations. My right hon.”
“That is the underlying point: they need to see that change happen, that it has not happened and that we have seen it not happen. Implicitly, what that is saying is that members are losing out from the status quo, and what I am not hearing from the Conservatives is a serious engagement with that reality that has let down savers. [ Interruption. ] I will come to the point about the previous amendment tabled by the hon. Member for Wyre Forest (Mark Garnier) shortly. I now come to my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), not least because he admirably set out the big challenge facing Britain, which is to turn this country back into a country that invests in its own future once again. That means higher investment.”
“Indeed, I think it is actually dangerous to have members of the public hearing remarks like that when that is categorically not the case. The shadow Secretary of State is right to say, though, and this maybe gets to the crux of where we are, that the money belongs to savers. That is what this is about and that is what we all agree about; we want to see higher returns to savers. The industry is telling us that diversifying their range of assets is in their savers’ interest and it is admitting that it has not done so to date. [ Interruption. ] No, that is what the industry is saying. Savers are not saying that, because savers do not have that choice and they are intermediated by providers, some of which have trustees and some of which do not.”
“Lady mentioned the Labour manifesto, which set out two focuses on pensions. One was around the question of scale, on which we have just touched and which I think is a matter of cross-party consensus; the second, which, again, I think is a matter of cross-party consensus, is on the importance of delivering change in terms of investment in productive assets in private assets. That is exactly the focus of both the Mansion House accord and the reserve power. The hon. Lady said the power was about directing specific outcomes. As I have been setting out, it absolutely does not do that. It will not allow any direction of savers into particular assets or particular asset classes, and it offers no ability for Government to take control of pension savers’ pensions.”
“On scale, I am a bit more confident than she is on the role of small schemes to grow, because we can see significant growth right across the market, including among small schemes, partly because the market itself is growing so fast in the current climate. However, I offer no comment on her pessimism about Tottenham Hotspur; that is for others to speak on. To be fair, as the shadow Secretary of State set out, the main area of disagreement that remains is around the reserve power. She raised the question of the accord and whether it applied to the whole industry. She is correct; it does not apply to the whole industry, but it does cover 90% of defined contribution assets held within the industry. We are therefore talking about not just a majority but the overwhelming majority of the industry. The hon.”
“I thank the Members from across the House who have contributed to the debate today. Let me respond directly to a few of their comments. I welcome much of the shadow Secretary of State’s remarks. I am glad that she welcomed many of the Government’s amendments, including those on public sector pensions and around innovation and competition—I appreciate that. I hope, when those issues are debated in the Lords in the near future, that there will be similar consensus across that House. The shadow Secretary of State raised the question of scale. Again, I am glad that she has welcomed the review that will happen within 12 months of the Bill’s commencement.”
“I am afraid the hon. Member has just revealed his lack of focus on what is going on. Pension schemes from around the world are investing in British private assets; it is UK pension schemes that are not. The hon. Member implied that there were minefields when investing in Britain. It is that kind of talking down Britain that is the problem. We are making sure that there is a robust pipeline of investments, which is absolutely right.”
“I fear the hon. Lady has not sat through enough of these sessions. Earlier, those on her own Front Bench engaged exactly with some of the arguments that I have made, explaining exactly the points she has raised. I will just say that she should go and have a look at what Australian pension schemes are doing investing in UK infrastructure and go and look at what is happening when US investors are investing in UK venture capital. Why is that happening? It is not because of differential tax breaks—there are very strong tax incentives. No, it is because of a history of not having the collective action problem that we have set out, and the fact that those on the Conservative Front Bench do not wish to engage with that is holding us back.”
“With those improvements, this is a Bill that industry worker representatives and charities wish to see passed into law. The TUC said: “It’s vital the Bill is passed so workers can start to benefit.” Age UK has said the measures in the Bill will help both the pensioners of today and the pensioners of tomorrow. It is important that these can be implemented as soon as possible. Aviva welcomed today’s amendments and said: “We hope this is enough to build the consensus needed for the Bill to be passed”. The ABI has said that it and its members are “clear that we want the Bill to pass”. They are right, and I commend the Government’s position to the House. Question put .”
“Within the infrastructure sector, it is obviously about having a country that is delivering actual infrastructure. Within venture capital, it is about making sure that there is easier intermediation for pension schemes into a market of which they have less experience. We are doing exactly that and that is what the Sterling 20 process is doing. I see very good engagement between pension schemes right across the board on that and every chief executive I speak to is engaging with exactly those questions that the hon. Member for Torbay raises. The Bill has received detailed scrutiny over the past year, and it is a better Bill for it. We have brought forward amendments that, subject to delivering the core pension reform programme of the elected Government, respond to the detailed points raised by peers in the other place.”
“The truth is that there is a range of opinion among ABI members about that. However, there is agreement across the industry about the need to deliver change. I turn to some of the comments made by the hon. Member for Torbay (Steve Darling) who, again, kindly did not refer to the Lib Dem manifesto, which called not just for reserve power, but for the direction of pension scheme assets into certain asset classes. I gently say that it is a shame to not see him engage with the substance, rather than taking the easy option of offering high-level, throwaway comments about a thing that he had in his own manifesto. On the plus side, however, he is right to say that the investment pipeline is important. The issue there is that that is different in different sectors.”
“We have had a 17% fall in energy usage in the recent past. Some of that is because we have become more efficient at using that energy. That is absolutely the kind of productivity growth that we need; it helps GDP but it really helps the environment.”
“The last Governments, from 2010 onwards, did not build any prisons. They were not motivated by GDP; they were motivated by easy answers. That is why we have had to come into Government and deal with the prisons crisis that was left to us. What actually happened was the opposite of the argument that the hon. Member made. It is sometimes argued that GDP and the other things that we care about are in tension. I totally agree. But remember: there is one area where they heavily overlap. GDP, in many ways, measures the effectiveness with which we turn resources into output. That is what we who are environmentalists should care about. We want things to become more productive. Fewer resources going in to produce the same output gets us higher GDP and a better environment. That is a really important point to hold on to.”
“That is why people oppose the building of houses: they do not care about younger generations or care enough about GDP; they just care about themselves, in some cases, and that is not acceptable any more. Why, if we cared just about GDP, would successive Governments, disgracefully including the Liberal Democrats after 2010, have slashed public investment levels? Such public investment boosts GDP in the long run. That would be the target. It is a good thing for our society. It would make our country cleaner and help with clean water and the energy crisis, yet public investment levels were slashed. People were not motivated by GDP; they were motivated by easy politics. That is what happened in that Government. The hon. Member gave the specific example that building prisons would boost GDP. Is that what actually happened?”
“Member made about it. I will explain why I do not quite agree, even though I agree with many of the big-picture arguments that she made. Her argument was that there has been too much focus on GDP recently and that has led to bad outcomes. Has there been too much focus on GDP? If so, it has not had any effect because there have been the lowest levels of GDP growth that we have seen in a very long time. GDP per capita fell in the last Parliament—so there was apparently a huge focus on it but it fell. Growth in GDP per capita over the 10 years prior to that Parliament was incredibly sluggish. Was that because there was too much focus on it? No.”
“We all, I think, care about longevity because we are hoping to go on for as long as is humanly possible—not in speeches but in life generally. It is good news that the UK has seen some signs of progress in GDP. It had the highest GDP growth among European countries in the G7 last year. The hon. Member will have seen recent GDP statistics for the start of this year, which show more significant growth than people expected. But—this is where I am in complete agreement with her—there is much more not just to life but to government and statistics than GDP. We care about secure power, clean water, lower poverty and lower inequality, not just higher GDP. All those things are incredibly important and we should care about all of them; Government’s job is to focus on them. Let us turn to GDP and some arguments that that the hon.”
“All of that does not mean that I do not agree with lots of the points she raised, but I see those as being entirely consistent with the Government’s view that economic growth does matter, but not as an end in itself. It matters because it remains one of the most reliable ways to raise living standards and because, for example, wages in Swansea, where I am a representative, did not grow between 2009 and 2023. That is what a failure of Government looks like, and it is a failure of GDP growth, not because of too much focus on GDP growth. GDP is also important because it is very highly correlated with—I am not saying it is a cause of them—other things that we do care about: health and wellbeing. The correlation between longevity and GDP over time and across countries is very strong indeed.”
“A good summary of my view is that there is a very large amount more to life than GDP, but that the lack of GDP growth in recent years has been a very big problem for ordinary working people. That was the big absence in the hon. Member’s speech: she did not wrestle with the fact that the lack of GDP growth over the past 15 years has been a huge problem for the British people that has had real effects on all our constituents, particularly those on the lowest incomes. Much of her speech could have been given in 2010; it did not engage with the real world as we have lived it for 15 years, and the catastrophic consequences of a lack of productivity growth feeding through to a lack of wage growth, feeding through into food bank use and the rest. Those are really important things that her speech did not do justice to.”
“It is always a pleasure to serve under you, Sir Alec. I start by congratulating the hon. Member for South Cotswolds (Dr Savage) on securing this debate and on her speech. I am glad to be here for three reasons. More than most Ministers, I enjoy a chance to discuss statistics, so that is high on the list. The second reason is that I agree with lots of what the hon. Member said about the broad purpose of government and the need to reflect all that in how we govern. The third reason is that everybody likes a quote from Bobby Kennedy, and she has supplied one. I will start with some of the areas of less agreement and then come to our agreement, so that we can end on a high.”
“It is not remotely a measure of everything that matters. It does not aim to do justice to non-market interactions, which is a technocratic phrase for the fact that it does not do justice to some of the most important things in our lives—not least, caring for each other. That is why this Government are so committed to both reversing the dreadful economic performance seen under the previous Government—performances that left wages flatlining—while also assessing success against a far wider range of measures. The goal is a Britain that is not just growing but thriving. Question put and agreed to.”
“Even within economic indicators, what is the truth? We look at indicators not just on GDP, but on income, pay, employment, jobs, regional performance, and the environment. I encourage the Government to continue to do that. Ongoing improvements to the national accounts will also help better capture natural capital and the quality of public services, not to mention AI and the things that tend to get reported in the newspapers. Ministers look at all those things when they make policy. When I am looking at pensions policy, I am definitely into the weeds of health data and healthy life expectancy. I promise hon. Members that GDP is not dominating all those decisions. To conclude, GDP remains central to how we understand the economy. It tells us something important, but partial. Both of those things are important to understand.”
“I have set out that that is not the case because if they did, hopefully we would have seen a better job over the last 15 years. The truth is that across Government we consider a much wider range of economic indicators. Wellbeing is an important one; I have carried out research on wellbeing data and it does have something to bring to the party. But the strongest conclusion from wellbeing data is that people need a decent income and they need to be healthy. The Government do focus on those things because they should. Because we care about wellbeing, we are lifting the two-child limit. Because we care about health, we are investing in the health service to bring down waiting times. Our tax rises, which are opposed by all the Opposition parties, are delivering those things. We care about wellbeing because health is really important.”
“In 2016, the Bean review set out some of the issues that she has raised about the need to consider broader measures of wealth distribution and natural capital. In response, the ONS has put more resources into some of those things. Some progress has been made over the last 10 years—obviously, we were not in government so I am not claiming credit for that. The Dasgupta review further encouraged us to treat natural capital as an economic asset, as we absolutely should. Those principles have been accepted by the Government and they are being embedded in decision making. Hon. Members will have seen the supplementary guidance to the Green Book that puts in place the appraisal of environmental impacts alongside economic costs. The truth is that it is easy to say that everyone just myopically focuses on GDP.”
“If people do not care about those things, they do not mind that Britain has seen the lowest levels of business investment in the G7 year after year. Turning to areas of agreement, I absolutely agree with lots of what the hon. Member for South Cotswolds said about the limitations. I also endorse her praise for the approach of the Welsh Labour Government in this area; lots of my friends have spent years developing that work. On its own, GDP does not capture everything that underpins either our economic strategy or what matters in people’s lives; that is absolutely correct. It does not, for example, tell us how growth is distributed or about wealth inequalities, physical and mental health, and environmental sustainability. As the hon. Member set out, those limits have been long recognised, but we need to keep pushing against them.”
“The important lesson from GDP and housing is, “Get on with building some houses because younger generations are getting stuffed over,” not, “We paid too much attention to GDP.” That would be the opposite of what it teaches us. What is GDP a measure of? It is imperfect for lots of the reasons that have been set out by my hon. Friend the Member for North East Hertfordshire (Chris Hinchliff), but it does represent income flowing into people’s pockets, business revenues, and a tax base that funds our public services. Those things do matter. My hon. Friend is right that they are not the only things that matter—I totally agree with that—but they are real things. They are not abstractions, and we do need to care about them.”