A basic tenet of Anglo-Saxon capitalism has come into conflict with the post-pandemic workplace in a way that is confounding Tory politicians. Mel Stride, the work and pensions secretary, wants ill and disabled people and the disaffected to find gainful employment, taking up many of the almost 1m job vacancies in the UK that need filling. Officials from the Bank of England are, in effect, on his back, saying they will keep interest rates high until there are signs the programme is working and upward pressure on wages is easing. Stride is sympathetic to those who say a more supportive environment, populated by occupational therapists and mental health case workers, could help people find work and be more fulfilled. However, there are limits to the administration’s sympathy. Happiness is a second-order consideration. Stride has the funds for only a few such professionals and he cannot avoid pressure from backbenchers to include a big stick in the form of sanctions against those who will not or cannot comply with a regime of interviews and placements. It’s a debate that pitches national output against individual happiness, where the fate of the economy depends on unwilling workers being dragooned into whatever form of employment is available. Ministers believe themselves to be in a desperate situation and think happiness is something that needs to be sacrificed for the greater good. And the greater good is measured, in time-honoured fashion, by official surveys of national income, or, more precisely, gross domestic product. October’s GDP was down by 0.3% from the previous month, according to the latest estimate by the Office for National Statistics, so we had all better pull our socks up. Stagnation is the most optimistic forecast economists are making for next year. Some predict a slight contraction. Whichever happens, interest rates are likely to remain near their current 5.25% peak without more flexibility in the jobs market. Not that Whitehall officials see it that way. They subscribe to the formula of “growth equals happiness”. And it is understandable that they believe this when the fabric of so many democracies is starting to fray as growth becomes elusive.
Without the promise of growth, households and businesses fight over what’s left and the situation quickly turns ugly. Ten years ago, the economist Stephen D King described the looming problem in his book When the Money Runs Out. An adviser to HSBC, after many years as its chief economist, King urged politicians to examine the structural problems that inhibit growth, or risk “an unseemly fight over the spoils, threatening political upheaval or worse”. Labour’s shadow chancellor, Rachel Reeves, subscribes to this view, but like most social-democratic politicians, hopes public investment will act like a fertiliser, growing skilled jobs. However, some companies don’t want a future that involves being considerate to staff. Such a policy is tantamount to featherbedding, they say, and will rot the organisation from within. They prefer industrial relations built on fear and anxiety. Zero-hours jobs and excessive workloads are their model. Richard Layard, a professor at the London School of Economics and a godfather of the wellbeing movement, says he has three requests for every party to include in their manifesto promises: guaranteed apprenticeships; a psychological therapy service for addiction; and a wellbeing analysis group in the Treasury that examines spending with a cost-benefit analysis that includes the environmental and social impacts. Reeves wants to refashion apprenticeships. But there is more to it than numbers. For instance, how effective will a new apprenticeship scheme be when so many companies share the same outlook as the average Tory backbencher? In another effort to marry growth with happiness, many of Reeves’s colleagues promote social housing. Here, reducing waiting lists should help with wellbeing when there is a chronic shortage of good homes. But there is a question over how effective it might be when the English Housing Survey, published last week, clearly shows homeowners and people in private rented homes are happier and more satisfied with their lives than those in social housing. Council and housing association tenants report higher levels of anxiety than their homeowning or private-renting cousins, and a ranking of life satisfaction shows homeowners and those in the private rented sector coming out on top again. Like apprenticeships, simply having more social housing is unlikely to solve a wellbeing deficit. People in social housing need Layard’s apprenticeships to escape low-end jobs and have a sunnier outlook on life. They need a connected policy agenda put together by politicians with the confidence to leave Anglo-Saxon capitalism in the 19th century, where it belongs. • This article was amended on 20 December 2023. Council and housing association tenants report higher, not lower, levels of anxiety than homeowners and those privately renting.