Recent polling by Believe in Scotland shows that the offer of a wellbeing economy, along with the promise of a wellbeing pension, would increase support for Scottish independence to 66%.
That wellbeing pension sounds good!
More than 120,000 Scottish pensioners live in persistent poverty. If you reached state pension age with the necessary qualifying years after 5 April 2016, your state pension is £221.20 a week. But if you retired before then on the Basic State Pension, you only get £169.50 a week. Many older pensioners get more, through State Earnings Related Pension Scheme (SERPS) and workplace pensions; but some get even less if they don’t have enough qualifying years.
Lifting the state pension to a universal wellbeing level of £235.00 a week would massively improve the lot of our older pensioners, and is clearly a vote winner.
But “a wellbeing pension doth not a wellbeing economy make.”
There are much bigger challenges. For a start, 24% of Scottish children live in persistent poverty after housing costs. The figure for pensioners is only 15%. Children don’t vote, but they are our future.
What is a wellbeing economy?
And do we all mean the same thing when we talk about it? (Spoiler – almost certainly not!)
Not a lot of people know this, but Scotland signed up to the Wellbeing Economy Alliance, or WEAll, as one of the Wellbeing Economy Governments (WEGos) along with Finland, Iceland, New Zealand, Wales and Canada.
WEAll defines a wellbeing economy as:
“A Wellbeing Economy is an economy designed to serve people and the planet, not the other way around. Rather than treating economic growth as an end in and of itself and pursuing it at all costs, a Wellbeing Economy puts our human and planetary needs at the centre of its activities, ensuring that these needs are all equally met, by default.”
They propose five tenets:
- Dignity: everyone has enough to live in comfort, safety and happiness.
- Nature: a restored and safe natural world for all life.
- Purpose: institutions serve the common good and create real value.
- Fairness: justice is at the heart of the economy.
- Participation: citizens (not mere consumers!) are actively engaged in their communities and locally rooted economies.
Are we there yet? Are we in control?
Scanning these points in a Scottish context makes me ask whether our citizens have secure access to an adequate share of the nation’s resources, and have the agency and opportunities to take advantage of it if they do.
Sadly, at the moment, the answer is no. Half of our land is owned by less than 500 people. Most of our large businesses and infrastructure are owned, and the profits sent, outside Scotland. These trends will get worse as long as we encourage Foreign Direct Investment (FDI). FDI does not necessarily even mean jobs. Believe it or not, land purchases by foreigners, and purchases of existing businesses, are counted as FDI in exactly the same way as job-creating productive investment. UK statistics do not distinguish between them.
Further, the Scottish Government has been centralising everything it can, with a touching but badly misplaced faith in the economies of scale.
Wellbeing must be business as normal
A wellbeing approach will fail if it is bolted on to business as normal: it has to become business as normal. A government delegating much of its policy work to big international consultancies will not be able to deliver a wellbeing outcome. Am I talking about the Scottish Government here? You might think so. I couldn’t possibly comment.
Some of the WEGo countries, notably New Zealand, have been unable to sustain the wellbeing approach in the face of domestic controversy. If we are serious about the wellbeing economy, we need a national conversation to ensure that the wellbeing approach and success criteria are soundly embedded in the nation’s psyche and vision of the future, and has full cross party and civil service commitment.
How should we measure wellbeing?
What gets measured gets done. The Wellbeing Economy Alliance website has an insightful paper on the challenges in meaningfully measuring wellbeing. It mentions various approaches including happiness metrics, inequality metrics, and in my view the best, Kate Raworth’s Doughnut, a holistic model which both illustrates and helps to manage the tensions between societal needs and planetary boundaries.
As part of our participation in WEAll, we developed a set of national outcomes, and supporting indicators, forming a National Performance Framework (NPF). This seems like a good start. Unfortunately, we ignored the paper’s advice to use accepted standard measurement frameworks and invented our own. We then invented a wellbeing economy monitor as well!
So is Scotland measuring wellbeing?
The NPF is maintained, but not updated as frequently as desirable. This suggests that it isn’t seen as a priority, nor does it drive action. If it matters, it should be central to government policy and decision-making, given the same focus as the familiar GDP (Gross Domestic Product) metric. The performance indicators should be measured and updated quarterly, not every two or three years with a couple of years’ lags, as now seems to be the case. And the byzantine NPF website must be radically improved!
The NPF should be driving questions like: is it worth improving GDP if we’re not also improving the healthy life expectancy, education, housing and cost-of-living of the poorest 30% of the population? Why is this not a key debate? It would also be useful for exploring questions like should we be independent or remain part of the UK?, and if independent, would our wellbeing be better with our own currency?
Are the indicators the right ones?
Some of the indicators could do with a refresh. I would like to see more focus on long term viability issues such as ownership, control, and resilience. Let’s pick out some examples.
The productivity section seems to be based on a bald economic measure. The latest update mentions, without comment, that foreign owned companies have better productivity than locally owned ones. It doesn’t tell us whether that is due to productive investment in the workforce and capital equipment, or price gouging by the foreign owners. And is it achieved along with, or at the expense of, other wellbeing factors?
Is an economic measure of productivity even relevant to wellbeing? Is a nurse more productive spending 20 minutes at the bedside of a distressed patient holding their hand, or giving them a tranquiliser? Which is better for wellbeing – of both the nurse and the patient?
The NPF has no measure of retaining or attracting back indigenous talent. Too many of our young folk still can’t find sufficient opportunity at home. Do we care if all our bright graduates leave Scotland in search of opportunity, and if all our businesses and institutions are managed by incomers? Maybe, maybe not. Are we educating future leaders or only future followers? If the latter, does it matter? Are we educating enough STEM people, and are there good career paths for them in Scotland? If not, why not?
The economic view of the NPF focuses on short term growth rather than long term viability. It doesn’t measure the imbalances caused by a too-dominant financial services sector, nor by profit extraction by foreign owners, nor the desirability of self-sufficiency and resilience in key strategic areas such as food, energy (see Grangemouth…), and health service supplies. It completely ignores the principle of subsidiarity and citizens’ need for agency, so there is no drive to delegate decision-making and control to individual communities.
Financial services – servant or master?
Iceland is another member of WEGo. Many of the above issues were existential for Iceland after the 2008 Global Financial Crisis. Iceland learned the hard way that a small country cannot sustain a large financial sector. After the crisis, the neoliberal transformation of the previous twenty years was reversed. Bankers whose irresponsibility contributed to the nation’s economic collapse went to prison. National ownership of natural resources became a priority. This is a salutary example for Scotland to consider.
The currency question: getting there from here
The new polling is great news for independence supporters. It underscores the vital necessity, if we are serious about independence, to have our own currency, central bank and payment system ready to go on day one.
The transformation to a wellbeing economy will inevitably require a period of deficit spending by the government, while we transform our economy from the current extractive model (which makes the wealthy wealthier) to a regenerative economy that provides for citizens’ needs, and full, meaningful and dignified employment. Our own currency is the essential ingredient for this transformation because it allows us to set our own interest rates and invest in our own future according to our own priorities. Otherwise, we will be beholden to foreign lenders and investors who don’t have our interests at heart.
Neither Sterling nor the Euro, as currently managed, would give us the freedom to make that transformation fast enough to maintain popular support, as we experience the delays and disappointments and mis-steps that are inevitable in the early formative years of our new nation.
The answer to a question is another question!
The Believe in Scotland poll has decisively answered one question. But it immediately poses another: what does wellbeing economy really mean, and will the messy journey from here to there sustain the support attracted by the vision?
More in economy.
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