Environmental Audit Committee - Minutes of EvidenceHC 59

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Oral Evidence

Taken before the Environmental Audit Committee

on Wednesday 15 January 2014

Members present:

Joan Walley (Chair)

Peter Aldous

Martin Caton

Zac Goldsmith

Mark Lazarowicz

Caroline Lucas

Dr Matthew Offord

Dr Alan Whitehead

Simon Wright

________________

Examination of Witnesses

Witnesses: Mr Nick Hurd MP, Minister for Civil Society, Cabinet Office, Dr David Halpern, Director, Behavioural Insights Team and National Advisor,What Works, Cabinet Office, and Mr Michele Pittini, Deputy Director, Sustainable Land and Rural Evidence and Analysis, Department for Environment, Food and Rural Affairs, gave evidence.

Q104 Chair: Minister, it gives us all great pleasure to welcome you back to the Environmental Audit Committee for our important inquiry on well-being. I am grateful to you and colleagues from across Government for being here this afternoon. I think it might be helpful if I point out that we are expecting a vote at 4 pm. We hope to have completed our session by then.

I just want to say in the opening that it is a little time since we commenced this inquiry, but we understand entirely the reasons for the postponement of this particular session. We will do our best to revert to the issues we were raising when we were originally taking evidence. It seems a long time ago now but, at that time, we did take evidence from Professor Dieter Helm on the Natural Capital Committee’s report on the state of natural capital. We just wanted to know, first of all, if there has been a formal public response to the recommendations that Dieter Helm made in that report.

Mr Michele Pittini: I can answer that. There has not been a formal response.

Chair: There has not been?

Mr Michele Pittini: I do not think it was the view of the Government or indeed of the Natural Capital Committee that a formal response was needed, and it was never envisaged at this stage. This is because the nature of the State of Natural Capital report was very much for the Natural Capital Committee to set out its envisaged programme of work, and it was meant as the first major public statement of the committee of what it was aiming to do over a period of about three years.1

Q105 Chair: That begs the question: why not? I think it is trumpeted as a very important committee report. It is something that the Government, in the environment White Paper, said would be centre stage, and I just wonder, Minister, why the Government feel there is no need to have a formal response to that first set of recommendations.

Mr Hurd: Chair, thank you for welcoming me back to a Committee I served on for a number of years-with a very high level of personal well-being. I will be very candid with you. In all matters relating to the NCC, I am going to defer to DEFRA because, day to day, I have absolutely zero responsibility or involvement in that. I am going to continue to ask Michele to answer on behalf of DEFRA, which is the responsible Department in that specific context.

Q106 Chair: Do you think, with hindsight, that there is something to be said for having a full response so that there can be some tracking of how the Government are responding to the annual reports-presumably-that there will be from the Natural Capital Committee?

Mr Michele Pittini: When Professor Dieter Helm and his colleagues set out the programme of work for the Natural Capital Committee, they very much saw it as a programme of work over a period of three years. In the initial report, they set out the general direction of travel, and then more and more detail and actual recommendations are added as the work develops. Of course, it will be up to Government Ministers to decide how they will want to respond to future publications from the Natural Capital Committee. I expect the Natural Capital Committee will become more and more precise in setting out the evidence that they have come up with and also, therefore, recommendations for possible action by the Government or by others.

Q107 Chair: Given what you have just said and given that we have the Natural Capital Committee, which has been set up to report to the Treasury’s Economic Affairs Committee, that we have DEFRA leading on sustainable development indicators, and then that we also have the Office of National Statistics, which I understand is doing its role as well as the Cabinet Office on wellbeing, and given the arrangements that the Government put in place when they abolished the Sustainable Development Commission, I am just wondering who in government-and how-is making sure that these separate strands of work are not actual silos of work, but are integrated and brought together. Also, how does that relate not just to natural capital under the work of Professor Dieter Helm, but to the emerging work that is coming forward on social capital?

Mr Hurd: I could say something on that.

Chair: Please do.

Mr Hurd: The first point to make is just to note where the leadership on this has originally come from, which is from the top.

Chair: From the top?

Mr Hurd: From the Prime Minister, in terms of the general Government initiative around well-being and broadening out what we measure. That has come from him and we have a serious architecture across the Government to co-ordinate this, including a small but senior steering group of officials, chaired by a director-general in the Cabinet Office, which is designed to try and pull this together. As you know, Chair, we are at the start of a journey here. It is very experimental and there are not a huge number of people involved in this, but it is important, because it has come from the top and there is an architecture to support it. As we advance in terms of the measurement piece and get a better picture of how we are doing, I think it will get increasingly co-ordinated and less disaggregated than it is at the moment. That is the direction of travel I see. There is a co-ordination mechanism. There is leadership from the top but, at the moment, in relation to the NCC, it is something between the Treasury and DEFRA.

Q108 Chair: It is very difficult, isn’t it, because it is not a subject that is instantly recognisable or indeed understood? I am just wondering, in terms of what you have said about the direction of travel coming from the Prime Minister, how much of a priority within the day-to-day work that you are doing do you see as this subject area?

Mr Hurd: Quite a lot, and I expect it to grow. A large part of what we do in terms of the Office of Civil Society within the Cabinet Office is about to trying to build social capital and to understand the value of that. In the specific context of our largest programme, the National Citizen Service, we explicitly measure its impact on the well-being of young people, and we are beginning to try to establish the causal links between the participation of young people in those kinds of programmes that boost their confidence and self-esteem, and their education attainment and increased employability. We are beginning to explore these links because we consider them to be very important and we have a strong ongoing interest in the whole concept of how you measure social capital-it is fiendishly complicated-but we think it is important and we are in the process of building that. We have a strong vested interest in terms of encouraging and prodding, and nudging this agenda along.

Q109 Chair: I think that we are going to come on to the links between natural capital and social capital in a short while with Mr Aldous and Dr Whitehead. I just wonder whether it is a difficulty for you, with your role, that this agenda is not widely understood as yet, and what recommendations this Committee could make that could help to get traction on this agenda.

Mr Hurd: Well, I push back a little bit on that because I think in strict policy debates within the bubble, if I might put it that way-the debate about what we measure and what matters-the importance attached to well-being has been in the policy debate for some time. If you look at the numbers that have responded to the various consultations on this and the early work that ONS did to engage, you have some big numbers. I have not heard anything to suggest that the hundreds of thousands of people who have responded to the ONS surveys have struggled with answering the questions. If we stop and think about just our own lives, I do not think there is any conceptual difficulty around the concept of what is important to us.

Q110 Chair: Do you think it gets a fair hearing in the media?

Mr Hurd: No, but then nor do a lot of things. When you are on the start of a journey that is a bit experimental-I think we take some pride in being the frontrunner on this as a Government-you learn that you take some knocks along the way, but I come back to my starting point: this has come from the Prime Minister. If you read or heard his speech, you would know it came from the heart, and that is enormously important in the signal that it sends to the system about sticking with it, because the Committee will be very aware that, since we embarked on this journey, lots of other short-term pressures have piled on to the system. The fact that it is still in there, is still being moved along and is still being taken seriously tells you that a long-term view is being taken.

Q111 Chair: Let us just look a little bit at what that means in practice. To what extent do you believe that the Treasury is making sure that all different Departments take account of this emerging work as it is coming forward from the Natural Capital Committee when looking at the allocation of funding and so on? How much is the Treasury basing its spending policies and priorities on the emerging work that is being done on natural capital?

Mr Hurd: All I will say, before handing on to Michele, is that I have a strong sense from the evidence I have seen that the Treasury is well engaged with this in terms of the economic-

Q112 Chair: Give us an example.

Mr Hurd: Well, just in terms of the degree to which the Economic Secretary, who is the Minister responsible for this-both the current one and the previous one-has engaged with this personally. Again, I come back to my top point: this has come from the Prime Minister and the system recognises that.

Q113 Chair: But it is no good just being an academic subject, is it, if it not being translated into policy?

Mr Hurd: No, I know, but I just want to give that as a frontrunner to what Michele will say in terms of what the Department has recognised on the ground in terms of the interaction with the Treasury.

Mr Michele Pittini: I would just add that this is clearly a long-term agenda. We have just started on a journey towards making sure that we can fully measure and value natural capital and make sure that it is fully included and tracked in our environmental accounts, and the Treasury is fully behind that agenda. For a long time Treasury has, of course, supported the principle of using environmental valuation in policy appraisal to inform decision-making, and this has been a long-established principle in the Treasury’s Green Book for the appraisal of Government projects and policies. Just under two years ago we in DEFRA, working closely with Treasury colleagues, published supplementary guidance to the Green Book on assessing environment impacts.

The way I see it, there is full consistency of intents and views on the importance of this agenda. The Treasury would also always welcome a detailed and rigorous cost-benefit analysis of policy proposals, and there have been plenty of examples of when the valuation of the environment has fed within other estimates of costs and benefits in the assessment of policy proposals, impact assessments and so forth. Only recently, for example, in the consultation on CAP reform implementation in England, if you look at the impact assessment in particular of the Rural Development Programme, a large share of the benefits of the various policy scenarios are environmental benefits associated with environmental stewardship and other environment schemes.

In terms of feeding into policy appraisal at the micro-policy level, the Treasury has been supportive of this agenda for a long time, and DEFRA has been among the implementers for a long time. The issue of building economy-wide natural capital accounts is one that we will need to tackle in the long term. We gave ourselves a deadline of 2020 but, of course, there are some milestones in between, especially around 2015 where we hope to have sketched a considerable part of the final framework.

Dr Halpern: Obviously in many of these areas around particular forms of capital there is still a lot of work to be done within the domain-social capital is one we have noted already where, even on the management side, there is still a lot to be done-so it ends up naturally strongly embedded in Departments and pulled together in a tidy way. ONS at the same time is attempting quite ambitious approaches of how you measure progress and think about it from various angles, not least as a complement to GDP. In the Treasury, of course, they come together in various ways. They come together in the Green Book, but the Treasury is, by instinct, deeply sceptical of all that comes its way, in my experience. There is still a lot of other work, as well as other considerations, that come in when you put Humpty back together.

In some ways, the well-being agenda is a new angle on it, where the Cabinet Office particularly has played a strong role, which is that it starts from the other end of the telescope. It says, "What would be a more rounded measure of utility?" and then if you want to work back from that, "What is it that drives it?" It is quite a different approach to drive integration and the ability to compare essentially apples and oranges in policy work. You can go bottom up by monetising these different forms of capital and re-expressing a lot of the work, or you try and do it from the other approach, and that is what some of the well-being work of the Cabinet Office is attempting to do.

Q114 Chair: Finally from me for now, we are very conscious that the EU, the UN and the OECD each have different programmes of work looking at aspects of this measurement, and we are just wondering why the UK Government have gone off on their own tack. Is there not a case for there being some kind of uniformity and an agreed set of principles in looking at how you would start to measure some of this work? Why not use what is already there, rather than setting up our own programmes of work or our own measurements? Is there a case for divergence at some stage, or is it necessarily the case that we have to start this ourselves? How do you see that fitting into that wider work that is going on?

Dr Halpern: In some sense the UK, not least because of the PM, was impatient to get going. Even three years ago, on the well-being agenda specifically, most of those institutions you described were not active in this area, so the UK has played a leading role. I do not know if you have had evidence from Jill Matheson, but she will tell you that story quite powerfully. For example, certainly in relation to the OECD, the UK has played a major role. Some of it is just very nuts and bolts. It is literally: are we going to use the same scale? There was a point where New Zealand was going to use a five-point scale and we were using a 10-point scale, and there is an enormous advantage from us all agreeing about which one we are going to go for. I think I would characterise it as that the UK, and particularly the ONS, has led it-on well-being specifically-but increasingly it has to be an international effort. It just must be the case; it is much more powerful if it is comparable.

Mr Michele Pittini: Can I just add that, if you are talking specifically about natural capital accounting as opposed to the broader European agenda-I feel that as part of the discussion we may move sometimes from one to the other-we are fully engaged and working very closely with international organisations that are taking this agenda forward and, indeed, with many other countries around the world that are taking forward the natural capital accounting agenda. Of course, the ONS is keen to ensure that the UN Statistic Division makes as much progress as possible to bring up ecosystem accounting, not just the Central Framework for environmental accounting, to the level of statistical standards, and we have discussions with UN colleagues about how we can help to test the experimental guidance for ecosystem accounting that it published only last year.

We are also working closely with the World Bank partnership of Wealth Accounting and the Valuation of Ecosystem Services (the WAVES partnership). DFID is among the sponsors and DEFRA is also engaged at the technical level. Personally, I am part of the WAVES partnership policy and technical expert committee. We very much want to help to take forward this agenda. We are not going off at a different direction but, at the same time, in some areas we are trying to lead the debate because some of this work is a novelty, frankly. It is uncharted territory as far as statistical standards go.

Q115 Chair: That begs the final question from me: how does that then fit in with the work that DEFRA is doing in the run-up to the 2005 sustainable development goals being merged into the millennium development goals? In these different systems of accounting and so on, is there a connection between the work that is being done at that high level with the UN STGs and this ongoing work on the ground in DEFRA and presumably in DFID?

Mr Michele Pittini: We are trying to make a connection. Only last week I was at the UN in New York at the side event organised by the WAVES partnership on natural capital accounting-a side event to the open working group on the post-2015 Sustainable Development Goals. There is a lot of interest among all countries. We presented to a packed room and we had a lot of very interesting Q&A at the end of the presentation. As I am sure you are aware, the High Level Panel on the post-2015 development agenda chaired by the Prime Minister, among its recommendations, also encouraged countries to develop accounts for social environmental impacts by 2030. So, in a sense, it opened the door there as a possibility.

Q116 Chair: That is my point. If that work is looking to be done for the future-post 2015 up to 2030-would it not make sense to have a common denominator so that everybody is working off the same basis at this stage? That goes back to my point about why the UK has chosen to do it in a slightly different way from what is already in place with the UN, the OECD and the EU.

Mr Michele Pittini: As far as natural capital accounting is concerned, all countries are working to a longer-term timetable. There is not a readymade framework. We are all experimenting. We are all developing an approach for natural capital accounting. I suppose one of the tensions there, or the difficulties, may be that you are talking about post-2015 sustainable development goals and, when we are looking at the development of natural capital accounting worldwide, we are looking at a slightly longer time frame. The Nagoya commitment is for including biodiversity in initial accounts by 2020 and, indeed, the recommendation of the High Level Panel is talking about 2030. There may be an issue of timelines, but it is inevitable. This will not happen overnight.

Mr Hurd: Could I just add something on this international point and bring it back to your earlier question about how we bring people with us on this journey and, frankly, protect it politically, because we have just started and it could be vulnerable? A change of Government might take a different view. The international point is important for two reasons. First, it is very helpful for us to be able to point to a lot of international activity in this space and a bit of an international movement around this desire to measure a broader set of things than just GDP. Therefore, the level of good engagement and desire to find as much common ground as possible is very important.

There is a second point, which is domestic. The process we have set up has been developed through national debate around what matters to the UK people, and I think that domestic leadership on it and that domestic feel about it is very important in terms of making it relevant to people and keeping people with us on it.

Q117 Zac Goldsmith: Mr Pittini, I want to talk about the Natural Capital Committee briefly. Essentially, it is trying to work out how to measure natural capital and how to use those measurements to influence policy across the board. Can you just give us a broad progress report on how valuing natural capital is going?

Mr Michele Pittini: Well, as you know, in DEFRA we have a secretariat for the Natural Capital Committee, which at the moment is working flat out on trying to make progress towards the Second State of Natural Capital report. The Natural Capital Committee is fiercely independent and also, in the way we work with the secretariat, we try not to overlap too much. What I know is that they are working very hard to try to publish an ambitious report by the end of March, I believe. This is the kind of deadline they are working towards.

In parallel, of course, colleagues from the Natural Capital Committee secretariat and, indeed, Natural Capital Committee members are working with us and the ONS-and, from now on, with the Treasury as well-as part of the high-level steering group on taking forward the UK road map towards natural capital accounting. I can’t give you too much of an insider view of the detailed development of the Natural Capital Committee work, but-

Q118 Zac Goldsmith: Can you give us an indication of how broad it will be? Obviously it is not attempting to value all natural capital. That is not possible. Initially it was focusing on a few areas. How much broader will the second report that comes out in March be, do you think?

Mr Michele Pittini: I think the Natural Capital Committee’s focus is on trying to answer the key questions that the Government set out when they published the remit for the Natural Capital Committee. I would expect a more detailed look at critical natural capital and possibly some framework of indicators around that. I would also expect them to set out progress in some areas where I am aware they have been active although, as I said, I have not had an insider view of what they have been doing. For example, there is engagement with business. They are trying to develop the corporate side of natural capital accounting, or indeed look at issues around land use and managing land for competing ecosystem services.

As I said, this is just my expectation, because they work independently and at the moment they are very busy pushing ahead with making progress towards their second report.

Q119 Zac Goldsmith: I suppose one aspect of where natural capital accounting affects policy, potentially, is in the Government’s plans around biodiversity offsets. There is obvious synergy there. My understanding is that the Government’s plans entail measuring the losses and gains in respect of development, but without valuing the habitats involved. Is that correct? If so, was that deliberate, or is it just a reflection of our inability at this stage to make those calculations?

Mr Michele Pittini: Can I say first of all, as you brought up biodiversity offsetting, that the Government are in the process of assessing the very many responses that they received to the biodiversity offsetting consultation including, of course, the EAC report. I believe colleagues that work on biodiversity offsetting have spoken with the EAC secretariat and [Defra] should publish a response to the consultation fairly shortly-over in the next couple of weeks perhaps.

The question you have asked is interesting because, in terms of biodiversity offsetting, the driving policy principle is one of compensating in a cost-effective way for significant biodiversity loss. It is a "no net loss" principle, and that gives you a metric that does not necessarily require valuation. I suppose what I would-

Q120 Zac Goldsmith: Can I stop you there? I understand the point you are making, but how it is possible to do that cost-benefit analysis without having an agreed valuation? Take an ancient woodland, for example. How can you measure what the loss is, and how to achieve the gain elsewhere, if you have not valued the thing you are losing?

Mr Michele Pittini: An ancient woodland could be a particularly difficult example because you may argue that this is the kind of critical environmental asset that is rather difficult to replace, even applying some multipliers. I think that if there is a recognition that a certain level of biodiversity is critical and that you are not prepared to run down your natural capital below that level because, for example, you are concerned about the irreversibility of threshold effect. Essentially we are assuming that that level of biodiversity has a very high value. But I think it would be good if you could then bring valuation into the picture.

At the very least, it would allow you to direct your investment in creating offsetting sites in those locations where, in addition to preserving a biodiversity threshold that you do not want to deplete any further, you can also maximise broader social value associated to other ecosystems services, for example access for recreational purposes. I can understand the tension that you are highlighting between, essentially, a stronger definition of sustainability and trading off different environmental goals: no net loss versus cost-benefit analysis.

Q121 Zac Goldsmith: Would it be correct to say that the Government plans, if they are realised in relation to biodiversity offsetting, will be adapted as our ability to value ecosystems improves? The question is: is it deliberate, or is it a reflection of our inability to make these calculations? I am assuming that it is the latter at this stage.

Mr Michele Pittini: I think it is probably a combination of both because the context for developing biodiversity offsetting is to ensure that existing requirements in the planning system on biodiversity can be delivered as cost-effectively as possible and, of course, there are requirements in the planning system that have to do with other environmental or social issues.

Q122 Zac Goldsmith: Minister, I know that this is not your portfolio, but I am interested to know whether you think there are any particular dangers in seeking to value natural capital. What are the things that we ought to be looking to avoid?

Mr Hurd: It is not my area, Zac; I have not spent months thinking about it. My first instinct is that it is entirely desirable in the context of trying to get a bit of balance around what we do measure in terms of assessing national progress, and I think it is critically important that, as we look at production and consumption growth, we also look at it in the context of what it is doing to our capital stocks, and those stocks should include human, natural and social, because only by looking at it in that way can you get a good picture of sustainability of growth. I entirely support the direction of travel as long as it does not take us too far down the direction of just thinking that this is all about monetisation and numbers.

Chair: Before we go any further, may I just say there seems to be a very loud sound system in the adjacent Committee Room-it is perhaps as loud as our discussions are soft. May I ask all Members and the panel to speak up a little bit, given the competing noise from next door?

Q123 Zac Goldsmith: I only have one more question, and it is a political question, so I am going to target the Minister again. Going back to this issue of biodiversity offsetting, there are a lot of people who get the principle and understand the theory. There are certain developments that are necessary, and there are going to be areas of biodiversity that are lost, necessarily, as a consequence of development. Therefore, in theory, offsetting in certain circumstances could make sense, but ultimately there is an issue of trust here. Given that there is a bit of a standoff at the moment between the Government and many conservation groups, do you believe it is realistic or reasonable to expect those organisations and their supporters to buy into the biodiversity offsetting proposal in the context of that lack of trust?

Mr Hurd: Again, I am not close to it, but I think that what has been proposed is worthy of serious consideration, and the only way to build trust is to talk to each other. Not to engage with it seems daft to me. One can always withdraw if one continues to distrust what is being proposed, but to distrust just on starting principles seems to be quite wrong. As far as I can see, there seems to be a genuine attempt here to try to find a solution to something that you have acknowledged is difficult. Listening to Michele, I suspect that we are not yet far enough advanced in terms of finding ways of measuring the value of ancient woodland and computing that in a proper sense for this debate, but I think the principle is worth a proper discussion and worth engaging in.

Q124 Dr Whitehead: Bearing in mind the Natural Capital Committee is not just about measuring natural capital but achieving that wider understanding of the environment and warning the Government of threats to natural capital and so on, would there be a case for doing something similar as far as social capital is concerned-having a social capital committee that is engaged in measuring, understanding, warning of pillaging and so on?

Mr Hurd: Not yet. Something like it might be proposed further down the track. The fact is, as I think David mentioned before, in terms of the stocks of capital we are talking about here, social capital is a laggard. It is nowhere near as advanced, because it is arguably more difficult, and no country has cracked this, as far as I can see. I would love us to be the first because I think it matters. I think it completes the broader prism that we are talking about. As David will explain, the ONS is beginning to get its head around it.

I think it is going to produce something for debate this year. I would strongly welcome that because, although there has been quite a lot of research in the States, particularly around the importance of social capital, I think it would be interesting and valuable to take that to the next stage to see whether there is a framework around which we could measure it in a credible way and plug it into this wider evaluation around what matters, and what production and consumption is doing, in relation to our stocks of genuine national prosperity-production, social, human, natural-and also what that means in terms of our sustainable development.

I would welcome it. I do not expect it to happen soon because there is a relatively small group of people advancing on a very ambitious front already, and the priorities are set by the public commitments that have already been made. There has been no public commitment around social capital. The ONS is engaged with it. There will be something that we will be able to debate shortly, which I hope will continue to nudge this debate along and make sure that social capital is not lost in the debate around what matters and what we should be measuring. Do you want to add to that, David?

Dr Halpern: I have written quite a lot-you have too, from memory-about this issue. As the Minister says, it is sort of the laggard in some sense, although we have been rehearsing the issue for a long time. I do not think it is a matter of despair because the literature already tells us there are ‘look-alikes’ and relatively strong indicators. In fact, to some extent you can argue both for well-being and social capital. It is one of those things that is very hard in theory and not that difficult in practice. It turns out to be easier than people think. A simple measure that has been widely used is social trust. Do you think other people can be trusted?

Mr Hurd: We have measured that.

Dr Halpern: We have. That is right, exactly. There are some surveys that pick it up in other countries. It is a remarkable variable in what it predicts. Even in mainstream economic growth, if you build an econometric model to predict national growth rates and you put in that variable, social trust, it is powerful. It is more powerful than human capital, for example, in most models. With Scandinavians, what partly explains their high growth, arguably, is high levels of social trust and cohesion. There are enormous national differences, and there are very big regional differences even inside the UK. We know enough to know that it is pretty important, but it still remains very much on the fringe in terms of day-to-day policy considerations.

There have been some attempts elsewhere, but they are pretty limited. In the US there have certainly been moves in some states to try and do an impact assessment on the environment if you are putting road in, and to have a go at what the social impacts would be. We know that every 10 minutes of extra commuting reduces your engagement in voluntary activities by 10%, roughly speaking. There is a host of consequences. The logic of it is absolutely right-and as you say, the direction of travel-but there is a lot of work to be done to get to the point where we could use social capital measures in a way that is credible enough certainly to stand up to Treasury scrutiny.

I have given the example of the relationship to economic growth, which we know is very strong, but you would never rely on social capital only because of its impacts on economic growth. We value our relationships with each other because of all kinds of other reasons: obviously the well-being that it gives, and the fact that our kids love us and our neighbours don’t hate us. The well-being literature certainly strongly reinforces this because it highlights, like a spotlight, the weakness of our account on social capital. Social capital is known to drive well-being very significantly.

Q125 Dr Whitehead: But isn’t there a triple layer? You mentioned things being difficult in theory but easier in practice" Yes, that is absolutely true. Once the difficult, theoretical bit comes to ground, making the links thereafter is relatively easy, but then putting them into some form where they can come out as the headline, almost in the way that the Natural Capital Committee is trying to do, seems to me to be exceedingly difficult.

Dr Halpern: That is absolutely true and there is a further issue, which is the extent to which people believe the Government could not do much about it and whether the Government should even be involved at all. These questions arise around social capital in a way they tend not to around some of the other kinds of capitals.

Q126 Dr Whitehead: Because of that, is there not a temptation, bearing in mind what there is at the moment concerning natural capital, to run away with monetising and headlining environmental consequences, and not running that in parallel for social consequences, and therefore having an unbalanced portfolio coming into a wider well-being argument?

Dr Halpern: Absolutely. The Minister mentioned the PM’s speech. Absolutely in that territory is the sense that there are other things that matter. That is the fundamental point. There are other things that clearly matter that we do not account for and they get less emphasis and weight in the decisions that we make in day-to-day life-probably in our personal lives as well as in what Government do. It is absolutely about trying to get that correction but, given it took a long time to get GDP in place, it is going to take a little while for us to get these other ones to the state where they can bear that weight of making major decisions on the back of this number or that number.

Mr Hurd: You are right. There is risk because it is running behind the others, but the ONS is engaged with it and it is on its radar screen. I think that everyone acknowledges it is a bit further behind the others and it is harder, but it is certainly something that we care about and it is something the ONS is actively engaged with.

Q127 Dr Whitehead: That is a hopeful thought in terms of the extent to which some sort of unified social capital headline could be introduced, I guess. What sort of feeling do you have about the ability to produce what one might say is a politically neutral headline-that is, for example, neither pro nor anti-austerity-regarding the measurement of social capital and responsiveness in terms of the headlines, or do you think it is difficult to do that?

Mr Hurd: None of this stuff is easy. In terms of suggesting a measurement framework around this, which is what the ONS is going to do this year, it helps that it is the ONS doing it. One of the good things we have done is to buttress the independence of that institution and this work. This might be a bit naive, but I have to believe that this is an agenda that is long-term and will outlive austerity, so we have to look beyond that.

Q128 Peter Aldous: Over the past couple of years the ONS has been developing well-being indicators, which include some subjective personal well-being questions for the annual population surveys on life satisfaction, worthwhileness, happiness and lack of anxiety. The ONS published some initial analysis of this in May. What messages are Ministers taking from this analysis?

Mr Hurd: David is not a Minister, but I will ask him to chip in in terms of some of the science around the production of statistics here. My first point is this is effectively the first set. We have no trend analysis. Our priority at this stage is around the credibility of the measurement and I think we are very satisfied that the ONS has done an extremely good job so far. In part, Peter, the answer to your question is that it is too early to be drawing too many conclusions as Ministers from it.

Our priority is to support the ONS in the measurement, to do what we can now to start drawing out some analysis of the statistics for debate and discussion, and to try to prompt and nudge people to engage with the data and think about how it impacts them in their policy development. What we have done is to put some structure in place across Whitehall on architecture, and some training and capacity building, just to encourage people to engage with it, which will become more and important as the data sets grow and we get a clearer picture of trends. We are at the start of that journey.

I think my message is that we are not in the business of over-interpreting; we are trying to understand. For example, part of what we are doing is mapping this and, I think as David will say, we are nowhere near getting a good enough understanding about why Stoke comes down so low in terms of well-being, or why people in Richmond seem to be proportionately more anxious. I do not think it has anything to do with their MPs. We do not have enough understanding, but what we now have is some statistics to take it to engagement.

The other thing is that some of it is bleeding obvious in the sense that most of us sitting in the pub could have written down a few factors that we know are instrumental in driving well-being, but I think there is a huge amount of value in trying to calibrate this and to understand a bit better what is important here. In terms of policy making, for example in the area that I am interested in around social capital and trying to encourage people to get involved in their communities and to build a stronger sense of community, you can see clearly from the surveys that that is an enormously important driver of how people feel and their quality of life.

That gives power to my elbow in terms of what I am trying to offer and certainly I believe very strongly that, in terms of the environmental agenda, the statistics are going to give more and more power to the argument about the value that people put on the natural environment and how it affects their quality of life. This is enormously important in terms of the policy debate about priorities.

Q129 Peter Aldous: One of the things that came out of the analysis was that subjective well-being does seem to correlate very strongly with people’s health and employment status, and perhaps also with their marital status. Did that sort of analysis come as a surprise to Ministers and does it prompt any thoughts about how one might change policies going forward?

Mr Hurd: No. It perhaps tiptoes into statements of the bleeding obvious. The important point is not just to understand the drivers of well-being and their relative importance, but to think through what that means in terms of policy design. I will give you one example, albeit from outside my field-in health. Obviously there is tremendous interest in keeping people out of hospital or keeping people away from the medical system if they do not need it. If you work back from that in terms of the drivers of people seeking help from the medical system, there are some obvious reasons relating to illness, but you also begin to see that the issue of loneliness and social exclusion is a material factor in driving people’s propensity to seek help from the medical network.

That has prompted us, working with the Department of Health, to think very seriously about how we engage with partners, not least in the voluntary sector, and how we do a better job of building social networks around people who are feeling lonely and socially excluded, with a dividend to the public purse in that if we are successful, there will be fewer people making demands on the NHS. This is where the issue of loneliness does not sit in isolation. It is part of a factor in thinking about how you design policy to reduce demands on the NHS. You have to do something about loneliness and people living socially isolated lives because it affects their health.

Q130 Peter Aldous: Dr Halpern, do you have any initial thoughts on the analysis that the ONS has carried out?

Dr Halpern: I certainly do. By the way, there are three broad things coming up. One is the management agenda. It is a simple thing. It is not something that Ministers tend to get overly excited about-they have a lot of other things to worry about. For example, within this Minister’s domain in the National Citizen Service, to incorporate in the evaluation the same measures that the ONS has used and to have them starting to appear on evaluations of policy is a very important development. It gives you a metric comparison.

One of the issues, certainly in this Administration’s view, is transparency. This data is very powerful not just for the Government and Ministers, but because people out there might find it useful. We have some interesting stuff to show you, which I think is in the public domain, about areas. Another one is policy implications. At the moment, partly reflecting this whole conversation, what it does is just to shift the emphasis a little bit. The Minister’s example of social isolation is a very good one. The Secretary of State, of course, has talked about that.

We have known for a while that the health effects on longevity of social isolation are roughly equivalent to 15 cigarettes a day-huge effects-and we start to see it in other areas, too. What you see, it seems to me, is that you put a foot in the door and things that were vaguely at the margin, about which we had an intuition that they may be important, start to be quantified in a way whereby they are pushing their way on to the agenda. Remember much policy and spend is driven by this enormous inertia. So, you are saying, "Well, wait a minute. There is something else going on here that is also important. At least let’s start talking about it and edging into it".

Just to get it on the table, one of the things that is very striking to me about the data, when you have a dataset this big, is what you can do that you could not have done before. You can start to get into the nuance and the detail, and one example is-I don’t know if we can circulate this; do you have these-a breakdown for English counties. On the X axis we have deprivation; on the Y axis we have a measure of life satisfaction. You see there is a broad relationship. Even at a glance, you start to see that there are areas that seem happier than they should be and some that seem less happy than they should be. As it happens, we tend to look at administrative units rather than constituencies, but we have done this for your benefit today.

It is true, for those around the table. Stoke-on-Trent is somewhat lower than average for life satisfaction, and we will get to why in a second-

Chair: You will need longer than a second.

Dr Halpern: Brighton and Hove, however, is somewhat above. What explains this? Well, because you now have enough numbers you can start making sense of it. I think you will be pleased to know that it turns out, in relation to Stoke, that much of it is to do with individual characteristics. When you control for gender, women tend to be slightly higher for life satisfaction. There is age-a curvi-linear relationship that occurs with lifestyle. Marital status got a mention earlier. There is also number of children, health, smoking and employment. Then after controlling for these the difference is no longer significant, but it is still interesting.

Some of this variance is not explained away by those factors. The controls get rid of the difference for Stoke, but they do not get rid of the difference for Swansea. It remains at a lower life satisfaction than you would expect for the population characteristics. These have started to get quite interesting already, so you start to think, "Well, what is it that drives and explains some of these things?" As it happens, things like access to green space or living close to water turn out to have an impact on your well-being. It is certainly not that surprising. Social trust, as it happens, has a big impact. Living in an area where you think other people can be trusted has a big impact on how you feel in yourself.

Q131 Chair: You have raised this in connection with our consistencies and you mentioned trust. I can’t remember what the actual event was, but I remember some kind of satisfaction survey that was done by a national magazine. It had Staffordshire at bottom of the list and one of the things was places to which it had least access: a coastline. Obviously if you live in Staffordshire you have least access to a coastline. A lot of these different measures seem to be very arbitrary and do not seem to be evidence based.

One of the things that I would say that I don’t think is being captured by policy making is this aspect of trust, and it has arisen, for example, today in Staffordshire where right now, as we speak, the county council is closing down, against all the wishes of local people, homes for those with severe disability. What they are going to do is to reduce the number of places by 70% and then require people to go out to privatised services, if they then subsequently qualify, with no detail about what the new provision will be.

The relevance of this and the reason why I raise it, is that at the moment I would imagine that on that well-being to which you referred to in Stoke-on-Trent, a high amount would be linked to trust, because people do actually trust the providers of social services. Where does a policy of draconian privatisation, for example, fit into a policy of this kind, which is breaking down the trust that people have in their elected representatives? How does the whole approach from the Government towards well-being, which we hope is going to be factored into the Treasury and is then going to be informing national and local decision making, fit in with expectations that our constituents have that they should be able to trust the policy makers and their elected representatives?

Mr Hurd: Quite a lot to unpick there, Joan.

Chair: But it is relevant to this debate about social capital.

Mr Hurd: I completely accept that, but I think the big macro point I am getting at is: isn’t it good that we are moving, hopefully, towards a situation where, if low levels of trust are identified as a significant driver of Stoke-on-Trent’s relative ratings in this, people at the local level and at the national level ask, "Is what we are doing going to be adding or subtracting to the stock of trust and social capital if Stoke becomes part of the policy debate?" which presumably up to now has been entirely absent.

Chair: Exactly.

Mr Hurd: What we are trying to do is to insert into the policy debate some statistical evidence hopefully to change the priorities, or to get people thinking in a broader sense about the implications of what they are doing-you have illustrated part of the value of this work-so that decisions are taken with a more rounded sense of debate and information about what is important and why.

Dr Halpern: An example for many Ministers that I can articulate is that they are often making decisions that override some other analysis, because they have an intuition something else is important. The everyday example is a post office or a pub. People think something happens in those places that has a value- ‘water-cooler moments’ where we connect with each other-and it is very hard to quantify the benefits of these. This makes it possible to start to do that anyway. You might decide the active ingredient-let us go with the post office-might not be the administration benefits in a certain kind of way. It might just be the social contact, in which case, if that is the active ingredient, that is where our policy focus should be and we just need to subsidise it, but it might be through some other form than a post office.

We are now laying bare something deep and important. I was just giving you one good topical example. Of course, myriad things affect your life satisfaction. If you try to answer those questions yourself-did you have an argument, how are your kids doing, did you have a good breakfast or what are you looking forward to-there are a million things, many of which are not up to the Government. What is incredible is to what extent the wellbeing data can be responsive to some of those factors.

One we looked at was aircraft noise, for example. As it happens, Richmond looks like it is pretty average in terms of life satisfaction-not average in lots of respects, but I mean it is not significantly different than you would expect. Anxiety is much higher than you would expect. If you put in aircraft noise, you can see that. You can see that in the data. In fact, we can say that anxiety moves 0.31 points by having a high level of aircraft noise in your area. We are not asking people about aircraft noise. At the beginning of a survey we are just asking about your life satisfaction and your anxiety. Independently measured, you see that flowing through the data.

Q132 Zac Goldsmith: How are you so confident about the link between aircraft noise and anxiety?

Dr Halpern: It is a correlational thing. We have cross-sectional data, so it is possible to do that. You can put noise contours over this data and you have 200,000 data points where people separately were asked, "How do you feel?" But, moving through the data, you can map it on and you can see what the effect is. There are still issues about causality and what it means, but it gives you a glimpse about what else is going on, or what else is possible in this data. It gives you some kind of metric. It is pretty exciting.

Q133 Mark Lazarowicz: But how do you know that people in Richmond do not have a particular type of response to current economic or financial crises that happens to be particular to them because of their relative high wealth or whatever? Perhaps they are feeling more vulnerable because of something to do with that. How can you distinguish that from aircraft noise, for example?

Dr Halpern: This is true, of course, for all correlational-

Mark Lazarowicz: Indeed.

Dr Halpern: As it happens, there is an earlier generation of studies that looked at the relationship between mental health and psychopathology areas, and one of the conclusions as the studies got larger and larger was that on a number of measures people who lived on flight paths had better mental health than those who did not. It seemed to be a selection effect, particularly because there happens to be a correlation between noise sensitivity and trade neuroticism. In other words, it is kind of obvious: there are lots of planes, so you would not buy a house there if you were a certain kind of person.

There are limitations to it and even these effect sizes are conservative analyses because if you have the money, you will go and buy in certain areas. As it happens, a lot of people might figure out it is nice to be able to look at water. When we do statistical controls for income, in some ways it is a conservative analysis, if you see what I mean. We are taking out a choice that someone has made and it is being expressed in some other way. There are lots of analytical challenges, which are pretty significant, about using this data and squeezing the value out, but you get a glimpse into what it might be possible to do.

Chair: That also begs the question of what determinant you are taking into the equation.

Q134 Simon Wright: I just have a couple of quick questions that cover some of the ground. I wonder if you could explain, Minister, what discussions are actively taking place now across the Government to work out the causes of variations in well-being between different groups of people in different communities, and the possible policy responses that are required.

Mr Hurd: You have a sense of it. I think it is a little bit early to be going into those conversations in detail because we need more data. We need more statistics and we need to be able to see trends. We need to get a better handle on understanding what we are seeing. I think that previous exchange highlights some of the upsides, and also some of the hazards in terms of being too quick to interpret stuff.

The key thing we wanted to stress is, although we think quite significant progress has been made since the Prime Minister’s speech in the commission to the ONS, we are still at a very early stage here. For us, it is all about measurement and building that up, and the credibility underpinning that. It is all about analysis and it is all about working on a cross-departmental basis, and we have set up the architecture for that at official level to work with this stuff and to begin to encourage Departments to engage with it. We are very much at the start of that.

As it happens, in terms of the Cabinet Office, we are embracing it wholeheartedly because it matters to a lot of the stuff that we do. One example is around volunteering and its value. Like all MPs, we talk about it-it is very easy to talk about it-but we do not do a very good job in terms of quantifying its value to society. The ONS does in terms of the replacement cost of volunteers and, even at that minimal level, you get to a value of around 1.3% of GDP for formal volunteering, let alone informal volunteering.

We do not even begin as a country to quantify the benefits of volunteering on the volunteers in terms of their well-being, and we know from our constituencies what it does for them in terms of boosting well-being and giving people a sense of fulfilment in their lives. If you start feeding that through to health effects and all that, the whole weight of volunteering, and the agenda of supporting and encouraging volunteering in this country, should rise and the Minister responsible for it has more ammunition to say, "This matters and I can quantify why it matters." I just use that as an illustration of how the debates might begin to evolve within the Government about what is important and what the priorities are.

Another area would be crime. In terms of measuring the impacts of crime, we tend to look at the economic cost attached to it. David can talk about this, but we do not necessarily rank crimes, in terms of their impact on the victim’s well-being beyond the economic impact. Where does stalking sit in that-feeling that someone is after you? This is potentially quite interesting. It is just dislocating the policy debate and the debate about what the priorities are, but we are just on the start of that journey.

Q135 Simon Wright: Thank you. We have had some discussion about some of the geographical data, and there is very interesting other data in here as well. One of the findings is the relationship between ethnicity and personal well-being. People from black African and Caribbean and black British groups rate life satisfaction 0.5 points lower on average than the white group. Has there been any thought given yet to why this is and how concerned we should be about those statistics?

Dr Halpern: I do not know if we have specifically done that or not. If you build a model, there will be other factors that explain these differences as well, but it would not be surprising, if there is a large enough effect. I am sure there is a residual absolute effect as well. Has there been any detailed analysis? No. Partly we are just creating the platform for anyone to use this across Government. There are various things that are occurring across Government to do this. There is the social impacts task force, which is trying to work out the relationship, in quite a structured way, between these different kinds of capitals we have talked about and different kinds of outcomes. There is a DG steering group. There is a lot of work where people are trying to do it but, in some sense, in putting it out there, most Departments have lots of analysts, and they need to be looking at this stuff and answering those kinds of questions. At this point the data is there. It just raises more and more questions, and I am sure there will be more of them-that is the whole point.

Mr Hurd: It also slightly ties in with the open data agenda and the transparency agenda. The fact is that you have asked me that question. If, as the data gets refreshed and the statistical debate grows, it is reinforced and feels like a real issue, people will be looking at it and asking us to look at it because they will see it themselves. As people begin to engage with this stuff, again there will be an engine that will be driving accountability on it and asking us to explain and respond.

Chair: I am conscious that we have partly covered some of our further questions. I think my colleagues will attempt to cover what we have not covered, but if I just give notice that when it is 3.50 pm we will go to Mr Lazarowicz for the last question, which we do want to include. I will pass on to Mr Caton.

Q136 Martin Caton: Dr Halpern, I think you have started to answer this question in reference to causality. The ONS subjective well-being survey identifies quite a lot of correlations. Health and happiness is fairly simple and obvious one, but the question immediately arises: are people healthier because they are happy or happier because they are healthy, or is it, as I suspect, something in between? From what you have said, you clearly recognise the need to look into causality. Has the ONS survey prompted further research work into trying to find out what causes what?

Dr Halpern: The short answer is yes. Of course, the ONS only does a certain amount. If I express a frustration, it is that the ONS will run a certain regression or simple analysis, but to really get under the skin you have to do a whole load of other work. For example, the Economic and Social Research Council has put money up so that academics can do further work. Some of the analytical work going on in some of the Departments is interesting, such as in DCLG on some of the area differences. It is hard work to pull apart causality and, in particular, you normally want to see interventional studies to make you much more confident.

To take your example of health and well-being, as it happens we do know quite a lot. There is a fantastic early study that looks at the well-being of young women. It was done for nuns. I do not know much about this, I have to say; I know it only from the study. When you are joining a nunnery, you give a statement about why you are doing it. If it is subsequently analysed to infer to what extent people were happy, you can get a pretty good sense from how someone writes about their life. So they analyse and compare the top quarter in terms of their happiness and then the bottom quarter in terms of their happiness-at 18 or 19, or whatever it will be. Anyway, the difference in terms of life expectancy is 10 years. It gives you 10 years extra on your life to be in the top quartile rather than the bottom. That is from a measurement taken by someone else at 19 and then its effect 80-odd years later. As it happens, there are also effects that go the other way.

We can sometimes see from other kinds of evidence, looking at where there is a causal effect and where there is not, that there is some kind of artefact, but this is hard work to do and one of the reasons why evaluations matter is that essentially evaluations give you a clue about that. Did it have the impact that you thought it would do? If we had more post offices and you introduced them into communities, what was the impact? Then you are much more confident about causality and, indeed, you can start to monetise not just in general terms, but regarding the return on that particular intervention.

Q137 Martin Caton: Thank you. This is a bit of a devil’s advocate question, but the ONS has calculated that its subjective well-being analysis explains only 10% or so of the differences in levels of well-being between people. Genes and personality explain most of the differences. With that in mind, are there limits on how far it is worth going on measuring and quantifying well-being?

Dr Halpern: Yes. A lot of the variance is at individual level, as you might expect and as we all know from ourselves and our colleagues. Some people are constitutionally prone to be a bit more upbeat in their view of the world and others not, and those effects seem quite robust over life. They are not completely, by the way. Those of us who tend to be miserable are able to do things that change how we view the world-take a moment before we walk into Parliament and say how beautiful it is. These are skills it looks like we can learn.

Another view on it is that when you start aggregating it, these effects are no longer genetic. If we look at cross-national differences, they are quite substantial. It is very difficult to explain those away in terms of genes. Hong Kong and Singapore are very rich but, in terms of life satisfaction, they are quite a long way below where you would expect them to be. The Canadians are ahead of us. They are very similar, but their life satisfaction is significantly higher than ours. The real winners are the Danes. The Danes are preposterously happy and have been getting happier for 30 years. It is very hard to explain that in terms of genes. It does seem like it is do with its culture and other things that are occurring in that society.

Q138 Dr Whitehead: Interestingly the happiest people on earth produce the most miserable TV dramas.

One of the things I have always been struggling with in this particular area is just how you boil those pretty strong correlations and implications down into any form of policy formulation. The Cabinet Office evidence to this Committee suggested that you were thinking about using well-being data to consider the impacts of proposed policy recommendations. I wonder whether that is the macro level at the bottom of a Cabinet paper-"Well-being implications are X"-or the micro level. Quite a lot of the well-being and social capital data suggests micro-level implications.

Many years ago I was trying to get a correlation between bottle bank collections and trust, but the problem is, in order to make that correlation work, you need to have someone supplying the bottle banks. Similarly, in Southampton there is a very high level of kids’ football leagues-disproportionately high compared with most other part of the country-which appears to be a strong social capital indicator in terms of how those leagues are organised entirely independently of any formal organisation, except the availability of football pitches.

Similarly, in terms of trust and ability to get out and about, there is the question of policies such as turning street lights away from facing the road towards facing the pavement so that people feel a lot safer moving about. However, you get rather more car accidents. As far as policy formation, how do you deal with those particular contraindications and are you anywhere near getting any sort of policy formulation on the basis of those sorts of issues and at what level?

Dr Halpern: By the way, I would not forget that one of the very powerful things in this area is simply the transparency of the data for people to make decisions for themselves. If you are going to university, we now ask about satisfaction and so on. An 18-year-old can work out not only how much they will earn, but whether they will be happy if they become a corporate lawyer. You put in people’s hands the ability to make the decisions themselves, but I absolutely take your point. A lot of it is quite micro on the face of it. One of my own hats is to look after the Behavioural Insights Team. A lot of the things that we do are very micro, but they may be consequential. What about saying thank you? If you deal with the public, how do you feel at the end of that conversation? Will that show through in your conventional economic analysis? It might not do, but it has quite an impact. Some of that we may be able to have leverage on, some of it we may not.

What can you do to facilitate and make it easier for people to have connections or whatever with others? Think about social care. Some of the things that the Minister is supporting in his brief are very much in that space around making it easier for people to connect and help each other. I have an elderly neighbour who I often walk past and I think, "Does he need help?" I know his wife has had a stroke and whatever, but I do not want to intrude. There are particular platforms being developed, not least supported by the Cabinet Office-still in trials-to see whether you can solve that problem and have very big impacts-both economic and, much more, human in some ways.

At the more macro level, this takes us back almost to the start of the discussion: would it impact at the margin as to how you set your budget? Would DCMS decide it is worth spending money on museums because of the well-being impacts? People are starting to try and have a go at doing that.

Mr Hurd: Potentially there are some quite big shifts. We talked about the well-being agenda highlighting loneliness and social isolation. This well-being agenda highlights that and makes it a more salient feature of the policy landscape, and relates it to a very important issue around how we tackle that in itself, and also make linkages to reduce costs to or the burden on the NHS. I think that is becoming increasingly live as an issue in the area I am directly responsible for.

As I said before, part of our debate around the National Citizen Service and the other programmes is all about trying to encourage young people to get involved in social action and to test what it does in terms of building their confidence, self-esteem, character skills and soft skills, which employers keep telling us are increasingly important in terms of their judgments on young people. We are looking to see causal links between participation in this kind of activity and educational attainment, increased employability and attractiveness to employers. Now, if we can prove that, it changes the debate around priorities for how we help and support our young people to achieve their potential. It could be quite a big shift in terms of the emphasis on helping to develop character skills rather than cognitive skills. There are potentially quite big dislocations in terms of the priorities inside the policy debate, not necessarily tomorrow or next year, but further down as the evidence builds around the importance of it.

Q139 Peter Aldous: Very quickly-given the time, I will not be able to go into quite the detail one would have liked-the well-being agenda is a relatively new area, so I am just interested as to what is happening across Government from Department to Department. Do we have some Departments that are pioneers and others who are laggards? Do the officials have the necessary skills? Are Departments’ efforts being co-ordinated, and is there buy in from Ministers and Secretaries of State?

Mr Hurd: It is early. There is strong leadership shown from the Prime Minister. As I said, people notice that. The Cabinet Office is taking a strong lead in terms of trying to co-ordinate this and, of course, building the capacity-your point about the human capacity-around this is extremely important. Departments such as MOJ, DEFRA, DCMS, DWP and the Department of Health, and some of the devolved Administrations, are all actively engaged with it in different ways. I think through our written evidence we have given you a flavour of that. It is definitely in the system and, given the backdrop of all the other pressures, I am quite pleased by the momentum and the stickiness of it. People engage with it.

Dr Halpern: I would simply add it is in the system. There is this inertia in systems in terms of skills. We are doing work. The so-called policy school, for example, we are doing for training new civil servants, we now include training on wellbeing. The fact is that officials and, to some extent, Ministers are looking at how the rest of the world does things. Everyone is looking at everyone else to see whether this gives stuff that is useful and meaningful. Of course, first of all there is slight apprehension-do you want to put your head above the parapet?- but bit by bit you see the move. It is getting in there.

Q140 Chair: Very quickly, is that something that you might be discussing with organisations like IEMA, the professional association that looks at green skills?

Mr Hurd: The short answer is that I am not very happy to say.

Dr Halpern: There is a question that hangs behind it, which Alan has referred to, that is, "So what? What do we do differently about this?" Gus O’Donnell, the former Cabinet Secretary, is chairing a commission to think through the policy implications of well-being, which is also supported by the Legatum commission. As you may know, Legatum does the prosperity index on an annual basis. We hope to see that finished in late spring-probably-and it is good to have a challenge from outside about what we would do differently.

Chair: Finally, we want to move on to a question from Mark Lazarowicz.

Q141 Mark Lazarowicz: Yes, which I think we are keen to get to because it relates in a very micro way to something we are doing as a Committee. We are keen to find out how the well-being agenda is influencing what is happening. We are doing an investigation into the issue of plastic bags, the charge and all the rest of, and we are interested to know how far the well-being agenda has fed into elements to it-the issue of cleanliness and the rest of it-and also how what I think is called the behavioural influencing or nudge type of approach is impacting on policy. Again, part of the issue is to encourage people not to use bags and so on. I would be interested to know how both those two elements of this agenda fed, if they did, into the policy proposals on plastic bags and whether it made a difference in that particular case. Is that the reason why it came forward?

Dr Halpern: To be honest, I am not aware of a strong connection between the two. You can certainly make one. As you all know, I am sure, a very small price-a kind of discontinuity between zero and even the tiniest price; that sort of non-linearity-has very big impacts on behaviour, and you all know the size of the impact. What you might use it as an illustration of is something like that does not matter only for environmental reasons. It matters for other things that we would not normally factor in. Seeing a messy environment-bags around or whatever-affects how you feel about other people, and we know that from a number of other studies. It looks like a rule has been broken because of litter; in fact, is a classic example. It leads to other kinds of problems. It changes how you feel about other people. We have already established that social trust is important. How do you know whether other people can be trusted? You infer it from the environment.

Q142 Mark Lazarowicz: Are you able to tell us specifically whether this fed into this particular policy proposal? Did somebody say, "Well, the well-being agenda is such that this is a good reason to put this forward when looking at the entire agenda," or did it just develop in its own right? You don’t know?

Mr Michele Pittini: I am not aware of it. It is not my area. We could come back to you on that.

Mr Hurd: It sounds like you might get a limited response on that.

Dr Halpern: I can tell you the Behavioural Insights team did not engage in it, but we do know the broad argument.

Q143 Chair: It does beg the question: if there are Government initiatives going out to consultation and coming out of DEFRA, how does that link in within each Department and the Cabinet?

Dr Halpern: We are tiny little team and, though we would love influence all areas of policy, there are limits to what we can and can’t do. In general terms of well-being though, and, to some extent, even the behavioural agenda, we spent a long time building up the capability across Departments. There are 100-odd seminars I would probably have done, including in DEFRA, to try to get civil servants to know about and be familiar with these ranges of approaches and influences. Then, hopefully, they have the capability and they will use it in their day-to-day work. It does not all have to come back through the centre for us to say yes or no on that given policy.

Mr Michele Pittini: Can I make one quick comment? Certainly from an economist’s perspective-an environmental economist working in DEFRA-I was very interested to see the Treasury discussion paper on using subjective well-being data as a route to value public goods and services. I think that is a potentially promising application to mainstream the use of subjective well-being data into the environmental valuation agenda. It may in fact find applications in a policy context, such as the one that has been described about broader well-being, and feelings associated with litter or other environmental externalities, that are perhaps more difficult to value through conventional valuation approaches.

Chair: Have you finished?

Mark Lazarowicz: I think that is probably as far as we can go, but if I could get a written response in due course.

Mr Hurd: Yes, sorry about that. I will have to write a letter.

Chair: I think we were also just going to look at a comparison with Wales, but what we have established is that each Department has champions for the environment and maybe there is scope here for the champions in each Department to look at ways of bringing these different policy areas together. That might be something that we each need to reflect on. On that happy note, I think it is almost time for the Division. Can I thank each of you for coming along this afternoon? Thank you very much indeed.