A happiness index tends to make for sound economics

Policy-makers could allocate more income to psychological overall health – cognitive behaviour therapy has a achievement charge of in excess of 50 per cent. Ah, I hear you cry, this is all a stealthy plea for increased public investing. Yet, as Lord O’Donnell says, much better government doesn’t have to suggest bigger government. Unemployment has a disastrous affect on psychological well being. Assist men and women to turn into mentally powerful and they are significantly more very likely to find work, which implies they come off benefits and shell out tax.

Previously some departments, including Perform and Pensions and the Treasury, are starting up to use life satisfaction ratings to carry out a social price-benefit analysis of policies. It should be the way forward. In the longer term, the ideas in the Legatum report may have much more effect on our lives and politics than this week’s Spending budget.


Egyptian-born Nemat Shafik, the new deputy governor at the Bank of England, roused passions when she was a Whitehall official. Known as Minouche, she was the most senior civil servant at the Department of Global Affairs, where she did not hesitate to speak reality to energy. “When you grow to be a cabinet minister, your first everlasting secretary is constantly rather unique and she was mine,” says Andrew Mitchell. “She’d place her head on one side, repair you with her beady eyes and make clear precisely why she disagreed with you.” He sighed. “She was wonderful.”

His see is broadly shared. One particular of her former civil support colleagues, a quite senior lady, advised me: “Minouche is glamorous, classy, funny, a brilliant economist and her American accent can make her a global figure.” So, is she a potential Governor of the Financial institution? “Oh, I hope so!”

UNCIVIL Services

George Osborne, in his Budget speech, praised the independence of Robert Chote, head of the Workplace for Price range Accountability. Mr Chote, who is married to Sharon White, 2nd permanent secretary at the Treasury, surely doesn’t hold back when it comes to speaking publicly about this Government’s reforms in Whitehall. There have been significant tensions amongst some ministers and their senior civil servants, not least in the Home Office and the Division for Operate and Pensions, whose prime official had to endure the politicians briefing against him.

I comprehend that throughout a seminar at Manchester University Mr Chote said: “Those engaged in civil services reform must ask themselves regardless of whether, at the end of the approach, any sane, competent person not under the influence of drink or medicines would want to be everlasting secretary of DWP or the Property Office.” You have been warned, minister.

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