What is the economy for?
It’s a simple question. But how we answer it underpins everything else in politics.
We created the economy to serve us – to make life easier, safer, better. It is a human system, designed to help people thrive.
But somewhere along the way, that relationship has become inverted. Too often, it feels as though people and communities are expected to bend themselves around the demands of the economy, rather than the other way round.
For decades, we have treated GDP growth as the ultimate measure of success. If the number goes up, we assume things are getting better. But most people instinctively know that isn’t the full story.
GDP can rise while people feel less secure, less connected, and less hopeful. It can rise while our rivers are polluted, our soils depleted, and our public services stretched. It can rise while inequality widens and communities fracture.
It tells us how fast the economy is moving. It does not tell us whether it is heading in the right direction.
A better way of thinking about progress
What if we started somewhere else – not with the economy, but with people’s lives?
Are people healthy?
Do they feel safe?
Do they have meaningful work?
Are they connected to their communities?
Do they have the opportunity to fulfil their potential?
Are we leaving the natural world in a better state for the next generation?
Taken together, these questions point to a single idea: wellbeing.
Wellbeing is a practical way of judging whether a society is working. It brings together economic security, health, community, environment and purpose – the things that make life feel worth living.
If those are improving, we are making progress. If they are not, we are not – whatever GDP says.
This is deeply liberal
For Liberal Democrats, this should feel familiar.
The preamble to our constitution describes a society where no one is held back by poverty or inequality, where freedom is balanced with fairness and community, and where every individual can thrive.
That is not a high-GDP vision. It is a high-wellbeing one.
Liberalism is about enabling people to live full, meaningful lives – removing barriers and ensuring that power supports human potential.
Wellbeing economics is simply the practical expression of that philosophy. It restores the proper relationship: the economy serving people.
Why GDP is no longer enough
GDP was never designed to measure wellbeing.
It measures activity, not outcomes. And when we treat it as our primary measure of success, we distort our priorities.
We reward activity, even when it is harmful.
We undervalue care, prevention and community.
We ignore environmental damage until it becomes a crisis.
And we treat growth as an end in itself.
This matters more now than ever.
We are living through overlapping crises – climate, nature, health, inequality. These are not isolated problems, but symptoms of systems no longer aligned with human and planetary wellbeing.
We have not yet decoupled growth from environmental harm at the scale required. So continuing to chase growth alone, without asking what kind of growth and at what cost, is not just inadequate – it is dangerous.
The direction of travel
Across the world, governments are beginning to recognise this.
They are developing wellbeing frameworks, measuring what matters, and embedding long-term thinking into decision-making. There is growing recognition that intergenerational fairness must sit at the heart of policy.
This is not about abandoning growth. It is about putting it in its proper place.
Growth can be a tool. It is not the goal. The goal is wellbeing – measuring health, security, connection, sustainability and opportunity – not just output.
It means using those measures to guide decisions. It means embedding long-term thinking into our institutions. And it means trusting communities to define what wellbeing looks like for them.
A clearer liberal story
There is also a political opportunity here.
Too often, politics feels like a competition over who can best manage a failing system. But people are looking for something more fundamental: a sense of direction. A sense that the system is working for them.
Wellbeing economics provides that.
It allows us to say, clearly, that the purpose of the economy is not simply to grow, but to serve human flourishing. It connects the issues people care about – the cost of living, the NHS, their community, their environment – into a single, coherent story.
A new compass
GDP has been a useful tool. But it is no longer fit to guide us through the complexity of the 21st century. We need to restore the right relationship between people and the economy.
We need a better compass.
Wellbeing offers one.
Because it asks whether the economy is doing what we created it to do.
And whether people are truly thriving. And for a Liberal party, that is surely the point.
* Dr Roz Savage is the Liberal Democrat MP for the South Cotswolds.
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66 Comments
Hear, hear. There is a political opportunity here. However, I would suggest we could go further and say there is a political imperative for someone (and it should be us) to promote well-being economics as the antidote to Reform and its ilk.
To do this, well-being economics would need to deliver measurable changes in economic outcomes for the squeezed middle and the poor. Sadly this government set a budget that makes inequality worse. People understand this and are looking for parties who will articulate their pain.
And we need to see measurable reductions in carbon emissions and other byproducts of our industrial culture to head off radical environmental degradation – degradation which is not only bad for wildlife but will, again, have a disproportionate impact on the less well-off here and around the world.
A stimulating and well-structured article. Thanks. Indeed the very obvious problem with national GDP data (apart from the unreliability of the statistics) is that it is not a measure of mass standard of living, dispersal/concentration of economic power, political elite dominance (capture of ‘growth’ by the elite) , environmental, prodctivity, fiscal or social sustainability, pollution, economic freedom, or quality of life more generally, inter alia. The fundamental issue is not the measure itself but a lazy over-emphasis on this one measure as a yardstick of ‘economic performance’. Beneficial economic change can and should be seen via a range of indicators, avoiding esoteric mathematical macroeconomic measures easily subject to manipulation.
The party leadership seem to be adopting the usual obsession with ‘growth’ without asking the question of growth of what and for whom. The social and environmental destructiveness of a model of growth that focuses on GDP alone. It is ultimately self-defeating as it leads to reduced economic growth as well, as decades of that model have shown.
There does seem quite a lot of sentiment along the lines of:
“GDP has been a useful tool. But it is no longer fit to guide us through the complexity of the 21st century. We need to restore the right relationship between people and the economy. We need a better compass”
But what is this “better compass”? What is “Well-Being” exactly? It all sounds rather vague.
Froma socialist perspective, I would argue that GDP isn’t quite as bad an indicator as some make it out to be. One of the problems, though, is that it doesn’t indicate how our total wealth and income is shared out. So, before we throw out the baby with the bathwater, why not have a disussion about that?
@Peter M
I don’t think it’s difficult to make “well-being” more precise.
In a recent paper on whether it is possible to raise everyone out of poverty without overstraining the world’s natural resources, Jason Hickel and Dylan Sullivan argue that the answer is yes, but only if we adopt a different economic model. In doing this they spell out what “well-being” might mean in terms of nutrition, housing, hygiene, clothing, healthcare, education, communications and mobility. They explain why such a needs-based approach could succeed, and why a conventional “raise the third world’s GDP” policy cannot.
And yes, we do not need to look at GDP in detail, distinguishing between its good and bad components. One specific criticism of GDP is that a significant fraction – I think about 10% – consists of the completely notional rent that homeowners might be having to pay if they didn’t own their houses. This component was added into GDP to make our figures more comparable with countries like Germany that have a very different balance between home ownership and renting, but for all that it’s a nonsense.
Really enjoyed reading this. We are absolutely right to call out economic policy that prioritises GDP alone. GDP is an economic indicator, a single data point that cannot diagnose a complex problem alone. I’d be concerned if my doctor diagnosed a new condition from a single data point.
I strongly support linking the strategic vision to a broad range of economic indicators as well as other “less traditional” measures of success. However, I believe that a new vision with unorthodox measures needs the radical policy to have cut through with the electorate. The changing media landscape demonstrates how shorter form media and pithier vision and policy statements are needed now more than ever. For a wellbeing vision, how about radical environmental or inequality policies? Liberal values would be in the shop window, but not as values to digest, they would be actionable policies that solve the problems of the day.
they spell out what “well-being” might mean in terms of nutrition, housing, hygiene, clothing, healthcare, education, communications and mobility
Surely the very idea of ‘spelling out’ what well-being might mean is antithetical to the very core premise of liberalism?
Isn’t it the essence of liberalism that it is up to each individual person to decide for themselves what their well-being might involve, and that the government’s role is not to try to enforce any particular conception of well-being but just to get out of the way and allow people to pursue their own ideas of well-being, in whatever ways they wish, and to adjudicate on an individual basis whenever this means that two or more people come into conflict?
Absent from from this interesting and important discussion is military spending. We’ve been told a massive increase in what the King told Congress was the action of turning ploughshares into swords will boost our economy in Europe, and perhaps it would.
But it’s worth counting the number of people whose behaviour is driving the absurd belief that this would make us safer: Benjamin Netanyahu and Vladimir Putin – two. I’m not including the arms manufacturers (the Masters of War, according to the Pope, quoting Bob Dylan) who just see higher profits, or the US administration, most of whom don’t know whether they are coming or going over the Iran problem.
Admittedly there are some fanatics in Iran who relish war, but they are responding to the hatred aimed at them by the principal actors, Netanyahu, and his sometime puppets in the White House.
Couldn’t we speak for the billions in Britain and around the world who reject that kind of madness?
Always great to hear Roz championing a wellbeing economy and how deeply aligned with liberal and Lib Dem values it is!
We are at our best, as Liberal Democrats, when we have radical vision, challenge the status quo, AND have the plan to match.
The question is not just what a new economy looks like, but how we unpick the old one and move forward.
Here are thoughts on exactly how to change the system from within itself and the beginning of a step by step roadmap: https://www.libdemvoice.org/a-uk-wellbeing-economy-the-start-of-a-liberal-democrat-vision-and-plan-79550.html
A wellbeing economy matches our party’s deepest values: liberty, equality, community, democracy, and environmentalism.
Freedom, fairness, and equality of opportunity also cut across Liberal Democrat values and form the core of what a wellbeing economy could be:
A platform and the freedom to live your version of a best life.
Freedom in a fair society that works especially for the least advantaged.
Genuine equality of opportunity, not just theoretical opportunity written in law.
That new economy needs a practical route from the current, complex, globally connected system to a better one, built from inside the institutions, incentives, and fiscal realities we have now.
@ Denis,
” …….{Jason Hickel and Dylan Sullivan} spell out what “well-being” might mean in terms of nutrition, housing, hygiene, clothing, healthcare, education, communications and mobility.”
Fair enough, but all of us in this society know these are affordable, if we have money, but we have to do without if we don’t. These all have to be paid for, either directly, or indirectly through the process of taxation and government spending .
There are problems with the definition of GDP, as you’ve suggested. Another problem is the amount of unpaid work that may be relied upon. Putting your child into a commercial nursery, for example, adds to GDP whereas having a relative or friend do it for free does not. These are matters to be discussed rather than throwing out the concept entirely with nothing of any substance to replace it.
Lib Dems still seem reluctant to discuss the most fundamental problem with GDP. Which is not so much as how it is defined as how it is shared out.
“Lib Dems still seem reluctant to discuss the most fundamental problem with GDP. Which is not so much as how it is defined as how it is shared out.”
I don’t think this is right: GDP should be shared out so that nobody is be enslaved by poverty, ignorance or conformity (most directly the first.)
We can and do argue about what “poverty” is and what “enslavement” is, and we also argue about what the effective and just way of doing the redistribution is but the destination is clear enough.
Yet another article on LDV explaining why we should want to be poorer.
Every day our MPs are calling for more money to be spent by the Government. How can we do that without a larger economy?
There may well be differnt defitnions of wellbeing – but we should be looking to make sure people can make their own choices. The past 100 years have taken billions of people out of dire poverty. Living standards in the UK have increased enormously – and with them wellbeing.
With higher GDP we can make choices- we have had a decade without growth – why on earth would anyone think that has been a success.
” We need a better compass” “But what is this “better compass”?
Perhaps a model that maximises capital?
But not just financial capital. It has to include social capital, intellectual capital, and (most importantly of all) maintain and improving natural capital.
Freedom, well being and health for example are social capital. Natural capital describes the ability of the ecosystem to maximise the other kinds of capital.
Somehow the model has to manage and exploit human nature, imagination and ambition on the one hand, and on the other, cope with the worst the past and present monsters of history can throw at it.
Music to my ears, Roz! For me (and, I am pretty sure for virtually all Green Lib Dems) the two key words are “Wellbeing” and “Thrive”! Both of them are already written into the Preamble to the Constitution, so the underlying thesis to this article is correct. Liberal Democrats already know the answer.
What we have to do is to bring this thesis into mainstream economic thinking in a way that we have not yet managed to do in the UK as a whole. It is already there in Wales. It is already there in New Zealand an a handful of other smaller nations, where “thriving” is a positive state of mind.
Strangely, however, it is not yet mainstream even in our own party in terms of Economic Policy – but we have an opportunity to change that later this year. In order to do that we have to either change the minds of, or simply ignore, the dinosaurs who still seem to think that having a bigger GDP makes us better off.
Just one example should suffice … If we were to spend more on Social Care, for example, (involving a small increase in GDP) we would end up REDUCING some of the huge costs of a broken NHS with a consequent reduction in wasted GDP.
@Peter Martin “Lib Dems still seem reluctant to discuss the most fundamental problem with GDP. Which is not so much as how it is defined as how it is shared out.”
Co-incidentally, I was reminded by the answer to a quiz this morning that the first Budget in British history with the express intent of redistribution was a Liberal one.
‘ Simon McGrath, ” The past 100 years have taken billions of people out of dire poverty”.
It wasn’t done inevitably and by stealth through the passing of time, over the past 100 years, Simon. It was done by progressive politicians and those who supported progressive politics against the vested interests of those who then controlled the economy and exploited people. Credit to the New Liberals early in the last century and then their Labour successors, to Rowntree, Keynes and Beveridge particularly , and to the Attlee post war government.
My Granddad went down a Durham pit aged twelve in 1900 (historically a hundred years ago next week his pay was cut and his working day lengthened, he had to fight for what he got to feed his family. Today, all his grandchildren have higher degrees – and that’s no accident of time.
Sure, a single-minded concentration on growth and GDP is misdirected. But I’m not sure “wellbeing” is the answer.
If we cut taxes, cut back on spending, cut environmental protection costs, and cut back on health and social care – But we leave more money in people’s pockets to spend on what they want, including luxuries and expensive foreign holidays – Are we improving wellbeing? No doubt many people would say “yes”.
I feel there is quite a lot of missing the point going on here. I suspect we are creating enough wealth to go round, if it were more evenly distributed. If it is true that the already rich are getting richer, we could theoretically reverse that process without increasing the size of the pot, and remove a lot of financial poverty. By admitting that increasing GDP is not the answer we could focus on the things Rox says would improve wellbeing. Too many politicians can’t think of how to reduce inequality, and blindly hope that more GDP would make that problem go away.
Roz, obviously, despite my spellchecker thinking Rox is a word.
Whilst I wouldn’t say this article was wrong, I think we are going down the wrong rabbit hole here.
The economy is important because people’s economic wellbeing still has an enormous effect on both thier wellbeing and that of their children; the problem is that GDP doesn’t measure this, it’s just a measure of the amount of money changing hands.
Therefore before we even talk about having a non economic metric (which has been talked about for over a decade now and never gets anywhere), we first need to replace GDP with a more useful economic metric.
We do currently have a measure of disposable income, the problem with this is that if people downsize or move to an HMO in order to prevent their rent from going up, then rising housing costs won’t be fully reflected by this measure. It also includes taxes and bills, the size of which aren’t necessarily determined by the size and shape of the economy.
What we need is to measure the median wage relative to a new measure of inflation that better accounts for house prices, which tracks the price of a home of a set size, accounts for the effect on interest of the size of the down payment that an average person could afford one and accounts for the greater long term costs for the proportion of the population being forced to rent.
Large numbers of baby boomers have considerable wealth, often including property from which they derive rent, or to put it another way, they’ve retired, and now own part of the income from a young person who is still working. Younger generations comprise the precariate – their jobs are less secure, stress levels are higher, and they work longer hours than we did. This has nothing to do with how we measure the economy, it’s due to income and wealth inequality.
” The past 100 years have taken billions of people out of dire poverty”.
“It wasn’t done inevitably and by stealth ……… It was done by progressive politicians and those who supported progressive politics.”
Without growth way fewer people would have been taken out of poverty. Business adding value provides jobs and jobs pay wages. Capital accumulated by growth and taken by taxes was diverted and used to support the (economically) unproductive years of education, to pay for health and a myriad of other things.
Ignore it if you must, believe that profit is wicked if you like, consider – like the (historically failed) Marxists – that business is inevitably exploitative, but the bigger the pie the more there is to be redistributed and the richer people get; and that’s an observed fact. It’s why liberals and Liberal Democrats foster growth.
I think some on here have forgotten who their voter base is: leafy suburbia, those in the shires with two cars in the driveway who have done very well in life. I can’t see them downsizing to an HMO! Nobody has explained how you are going to redistribute this wealth and how it’s going to go down with the likes of Margot and Jerry to become more like Tom and Barbara. Tough sell; good luck.
I have repeatedly asked Craig Levene to confirm or deny whether he is or is not a Reform supporter – which matches the repeated flavour of his contributions. He has yet to do so.
Come on, Craig, don’t be shy or disingenuous. Do tell.
It will be a tough sell to explain to people that the false promises of ever increasing income and wealth and constantly improving lifestyles have been fantasy, but it would be wholly dishonest not to tell people the truth. People like Craig Levene who have swallowed hook, line and sinker the myth perpetrated by the uber rich that ordinary people benefit from a few people being very rich and that all one has to do is work hard and you can be uber rich too, will be very angry when they finally realise that they’ve been conned.
Redistribution of wealth and income went on for years from the people’s budget in 1909 until the Thatcher Government in 1979 and most people benefited. If you can’t fund public services and greater equality through growth, then redistribution is the only way. It means the uber rich will pay a lot more tax. Pardon me if I’m not thaty sympathetic. The very wealthy have got away for years with getting wealthier and not paying taxes, all at the expense of the majority of people who now have more insecure jobs, poorer wages, far worse mental and physical health and ever declining public services.
Mr Levene’s comments about HMOs are pathetic and bear no relation to reality. We will never be a radical party if we shy away from telling people how it is and what the real solutions are.
@ Andy,
“I suspect we are creating enough wealth to go round, if it were more evenly distributed…..”.
It is more than a suspicion.
GDP per person in the UK is around £40,000 p.a. GDP is more a measure of income than wealth. If we add wealth into the argument there is even more evidence of the levels of inequality in our society. But if GDP alone were to be divided equally it would mean that a family of 2 adults and 2 children would have an income of £160,000 🙂
That’s not going to happen of course. The economy, as it works at the moment, does rely on most of us having nowhere near this level of income. But we should still be looking to reduce levels of inequality in both income and wealth.
“……but the bigger the pie the more there is to be redistributed and the richer people get”
To some extent this is true, except that the flow of money upwards is usually greater than the flow that trickles down. But, also, it can work the other way.
For one example, London is now just about unaffordable for anyone wanting to take up a job there on a modest or average income. This is because they are always going to be outbid in the rental and property market by the wealthy in our society.
Another would be the unaffordability of land for anyone wanting to start a farming career.
@ Peter Martin
“If we add wealth into the argument there is even more evidence of the levels of inequality in our society. But if GDP alone were to be divided equally it would mean that a family of 2 adults and 2 children would have an income of £160,000”
I really don’t’ follow this. How do you get from income of £40k plus wealth (presumably capital) to an income of £160K?
If you assume income from the additional capital, that means additional income of c£120k which implies capital of (say) £2,400,000 each assuming a yield of 5%. There are of course load of assumptions in this very crude estimate, including the one that says all of the capital a person has produces income.
It’s worth saying that LiberaL Democrats don’t have to obsess about absolute material wealth. What we do do is worry about ensuring people are not enslaved by poverty. That does not require material equality.
Mick; The wealthy pay a considerable amount of tax. Not enough, obviously in you’re book, but we can’t have everything in life. The Ugandan Asians arrived in the UK with nothing – each generation has got wealthier. A strong knit two parent family – high educational attainment and strong work ethic. It’s the best route out of poverty.
Ronald Reagan sold the lie of trickle down economics in the 1980s. I can’t believe some people are still clinging to that neocon nonsense decades later.
We may have 72 MPs off of 12-14% national support (an excellent result), but if we want to shift the dial and double that number, we’re going to have to address the concerns of the squeezed middle and below. I’d we don’t we’ll always be the party of protest, lucky to be third behind the Government and the Opposition.
Tom Reeve 30th Apr ’26 – 10:55am:
Ronald Reagan sold the lie of trickle down economics in the 1980s.
Sadly, I can believe that some people are still clinging to this left-wing myth decades later. It’s the exact opposite of what actually happens. Many economists have explained this over the years, but non better than Thomas Sowell in his book, “Basic Economics: A Common Sense Guide to the Economy“…
‘Thomas Sowell on the “trickle Down” Myth: Workers Are Always Paid First and Then Profits Flow Upward Later – If at All’:
https://www.aei.org/carpe-diem/thomas-sowell-on-the-trickle-down-myth-workers-are-always-paid-first-and-then-profits-flow-upward-later-if-at-all/
“It will be a tough sell to explain to people that the false promises of ever increasing income and wealth and constantly improving lifestyles have been fantasy, but it would be wholly dishonest not to tell people the truth”
It has been the truth up to (say) 2005 and the financial cash. Not for everyone obviously, but for most people. .Since then Britain’s productivity growth has been rubbish, due to our inability to cope with a series of economic shocks, some self inflicted and others not. In particular Brexit and Trump’s tarrifs have done/will do huge damage.
Ronald Reagan sold the lie of trickle down economics in the 1980s. I can’t believe some people are still clinging to that neocon nonsense decades later.”
The problem for this argument is that most people really did get richer between (say) 1995 to 2005.
For example, in 1985 average salary was around £15,000, which is equivalent to roughly £40,000 in 2025 in inflation adjusted terms.
In 2005: average salary was £44,000 or about £72,500 in 2025.
This is the result of plugging the question “average British wealth adjusted for inflation between 1985 and 2005” into AI assisted Google, so lots of caveats apply, and not everyone would have benefited to this extent but it fits my recollection for what its worth.
On the other hand, here’s the (editted) Google AI generated result for the question ” how many people were below the poverty line in Britain between 1985 and 2005″.
Between 1985 and 2005, the number of people below the poverty line in Great Britain experienced a significant increase. By 2005/06, there were approximately 12.8 million people (22% of the population) experiencing relative low-income poverty.
Poverty increased sharply under the governments of the 1980s, with one in four people in poverty by the mid-1990s. A 1990 survey estimated 20% of households, or nearly 11 million people, were living in poverty, a rise of nearly 50% over 1983.
Early 2000s: while the number of people in poverty fell back by 2003/04 it was still roughly 12 million people.
@ Craig Levene For such a prolific poster, you are remarkably shy about confirming whether or not that you are a supporter of the Reform Party. The regular tone of your comments indicates that you are, so please don’t be diffident or shy. You’ll feel better if you tell.
Tristan Ward 30th Apr ’26 – 1:41pm:
In particular Brexit and Trump’s tarrifs have done/will do huge damage.
Untrue. There’s no evidence that Brexit has caused any significant damage at all. The US Reciprocal Tariffs impact the UK relatively less, precisely because being outside the EU, even this Labour government was able to negotiate a better deal than the EU. The UK has the third best access to the US after Canada and Mexico (CUSMA/USMCA exempt).
‘Brexit was not an act of economic self-harm’ [April 2026]:
https://thecritic.co.uk/brexit-was-not-an-act-of-economic-self-harm/
‘The UK’s resilient post-Brexit trade performance’ [April 2026];
https://www.briefingsforbritain.co.uk/uk-post-brexit-trade-performance/
‘Brexit was not an economic catastrophe. Here’s the proof’ [December 2025]:
https://archive.is/ExK6P
Dream on Mr Levene. My parents had a Ugandan Asian family staying with them and as far as I know they did OK when they moved to North London and set up a business. The late 1960s were of course pre Thatcher and the neocons. Her government started the process of cutting income taxes for the wealthy and made self reliance and working your way up the ladder largely things of the past.
I have little time for the Green Party, but I have some sympathy with the comment of their newest MP that people are fed up with working hard to make other people rich. There are far too many people in the UK who have been left behind when the small number of very wealthy people draw obscene salaries and pile up wealth whilst the precariat exist on poor pay.
Growth is no longer the answer. Greater equality is.
@Tristan Ward “In 2005: average salary was £44,000 or about £72,500 in 2025.”
Is that the mean average or the median one? (because the median is probably a better measure here)
@ Tristan,
“How do you get from income of £40k plus wealth (presumably capital) to an income of £160K?”
The income from capital is already included in GDP. So I’m not suggesting we add it in twice.
The per capita GDP statistic does include everyone from the newborn the very old. So if the GDP per capita is £40k p.a. we can multiply this by 4 for a family of 4.
I agree that this is what we can expect only if we had perfect equality in society and this figure would include the cost of health and education for everyone. Also, as previously said, it’s not realistic to have total equality but nevertheless these figures do give an indication of how far away from it we are.
I just Googled the question of median income in the UK:
“As of April 2025, the median gross annual earnings for full-time employees in the UK is £39,039”
@ Tristan,
“Ignore it if you must, believe that profit is wicked if you like, consider – like the (historically failed) Marxists …….”
Marx didn’t say that profit was “wicked”. He was highly complimentary of capitalism’s creation of increased productive capacity, viewing it as a historically necessary, revolutionary stage that surpassed all previous generations in creatingvastly improved technology, and a truly global infrastructure. He praised its ability to break feudal ties but criticised its exploitation and dehumanising effects on labour.
We see very similar comments on LDV. It’s not at all a contradiction to say that yes Capitalism has created the productive capacity to take many out of poverty but this has come at a cost which we do need to take steps to minimise.
@Peter Martin
“Marx didn’t say that profit was “wicked”.”
I didn’t say he did. I suggested that Marxists “consider …..that business is inevitably exploitative”.
I did suggest that some here (who may or may not include Marxists) think profit is inherently wicked. That’s a bit of a handicap for a politician advocating redistribution since we all depend on business activity and (pre-tax) profit to maintain and increase the size of the pie that can be distributed.
@Mick Taylor
“I have some sympathy with the comment of their newest MP that “people are fed up with working hard to make other people rich””
Substitute “to pay scroungers/immigrants/minorities/slackers bills” and you have the essence of the populist right’s appeal.
That is what we have to counter, and it’s not at all easy .
@Mick Taylor
” [Thatchers] government started the process of cutting income taxes for the wealthy”
It’s worth recalling that Jo Grimond (among others) criticised the vey high top rates of income tax of the 1970s.
It’s also fair to mention that the basic rate of income tax also came down from 33% in 1979 to 25% by 1988. That rate was of course subsequently cut further and is now 20%.
We should also recall the increased nil rate band – Lib Dem policy of course, as it remans as public finances allow.
Where I suspect you and I do agree is that we are doubtful whether the capacity of the environment can sustain growth and the current economic set up.
@Jeff
“In particular Brexit and Trump’s tarrifs have done/will do huge damage.
“Untrue.”
You’re evidence is not convincing. All it does is to say that trade has increased since Brexit.
The true thought experiment is to compare what has happened with the hypothetical of what would have happened had Brexit not taken place. Those studies are (so far as I know) unanimous in showing that Britain’s GDP is much lower than it would have been had there been no Brexit, including in one case that the UK is down £80 billion a year in tax revenue.
Your (weak) economic argument also ignores the changed attitude of the US in Trump’s second presidency. There’s safety in numbers when a bully is about.
Mick Taylor 30th Apr ’26 – 3:07pm:
[The Thatcher] government started the process of cutting income taxes for the wealthy…
The Thatcher governments cut income tax rates. As a result, tax revenue from the wealthy, even as a share of total income tax paid, rose strongly…
‘Under the Thatcher governments of the 1980s did tax revenue from the wealthy rise when Income Tax rates were cut?’:
https://gemini.google.com/
@ Tristan Ward You’ve forgotten the other bit of Jo Grimond, Tristan : his enthusiasm for worker-owned firms and profit-sharing.
@ Jeff You’re having a bit of a Laff (er), and conveniently omit that, under Margaret Thatcher (1979–1990), UK unemployment soared to over 3 million by 1983–1984, representing a peak rate of 11.9% to 13.7%, the highest levels since the 1930s. The rate hovered around 10% for much of the 1980s, largely driven by a sharp decline in manufacturing, before decreasing towards the end of her premiership. Hundreds of pit villages were allowed to rot.
@ Jeff
“There’s no evidence that Brexit has caused any significant damage at all”
I’m familiar with the articles you refer to purporting to show this. The evidence presented is flawed. All they suggest is that Brexit has not completely stopped UK growth in exports.
To show that Brexit really did cause no significant damage to the UK economy, you need to show that there would have been no difference between the UK economy as it now is, and the economy had Brexit not happened. None of your three references address this.
The analyses that do are to my knowledge unanimous in finding that Brexit did great damage. The November 2025 NBER working paper estimated that by 2025, Brexit had reduced UK GDP per capita by 6–8% (*) for example. That’s up to £90 billion lost taxes a year – which would come in pretty useful.
Perhaps more importantly, in a world where the dominant superpower is running amuck, we have lost the safety in numbers that membership of the EU would have brought.
(*) https://cepr.org/voxeu/columns/brexits-slow-burn-hit-uk-economy#:~:text=Brexit%20has%20had%20a%20large,resources%20away%20from%20productive%20activity.
@ David Raw
“You’ve forgotten the other bit of Jo Grimond, Tristan : his enthusiasm for worker-owned firms and profit-sharing.”
I haven’t forgotten anything of the kind.
I see no reason why those who want to use such structures should not do so (bonus schemes including employees related to profits are out there in many service industries), but I don’t think it would be liberal for the state to impose those structures on business. You probably know better than I do: did Grimond suggest these should be mandatory?
As to worker owned firms – there are plenty about, typically for professional services, but we call them partnerships.
@ Tristan Ward, “did Grimond suggest these should be mandatory ?”
He advocated generous tax concessions to encourage them………….. which I’m sure you knew. My own M.P., Donald Wade (Huddersfield West), at one time Deputy Leader of the Party, was on the board of the John Lewis Partnership. In his youth My Dad worked at Theodore Taylor M/P/’s Mill in Birstall (look him up if you’ve never heard of him) which practised co-ownership. I wish our current Leader would advocate such schemes as a change from falling in the water.
Tristan Ward 1st May ’26 – 4:10pm:
The evidence presented is flawed.
All three articles I cited present data from the UK Office of National Statistics. In what way do you think the ONS data is “flawed”?
All they suggest is that Brexit has not completely stopped UK growth in exports.
They don’t “suggest” that. They show that UK exports to the EU have continued on a similar trajectory to when the UK was a member.
…you need to show that there would have been no difference between the UK economy as it now is, and the economy had Brexit not happened.
Nobody can do that, anymore than we can say what the UK would be like if Germany had won the Second World War. Since leaving the EU, UK GDP has grown faster than the eurozone, Germany and Italy, and similarly to France. Prior to Labour’s record tax rises, the UK was forecast, by the IMF, to continue with this faster growth…:
https://x.com/wesstreeting/status/1880323079869723001
There is no reason to believe growth would be faster if the UK was in the EU. For more growth, the UK needs to use the freedoms that come from being outside the EU…
‘I was a Remainer — this is why I was wrong’ [The Times, April 2026]:
https://archive.is/Fkhfg
Tristan Ward 1st May ’26 – 4:10pm:
The November 2025 NBER working paper estimated that by 2025, Brexit had reduced UK GDP per capita by 6–8% (*) for example.
These hypothetical ‘doppelgänger’ studies create a counter-factual fantasyland, typically heavily weighted, as in this case, by the United States. As in other fields, such computer models are often used to launder preconceptions, prejudices and opinions to produce the results desired.
Do you seriously think that if the UK had stayed in the EU, GDP would have grown twice as fast as the eurozone (almost as fast as the US) despite having the highest energy prices in the developed world (industrial gas and electricity four times more expensive than the US), closing down the North Sea, record high taxes (32nd. out of 38 in the International Tax Competitiveness Index even before Labour’s record tax increases), being encrusted by EU regulation, etc.?
For an analysis of that NBER paper (and a unicorn on a graph) see my earlier comment:
https://www.libdemvoice.org/rejoining-the-eu-part-2-what-12-trillion-really-means-for-britain-79498.html#comment-612730
Tristan Ward 1st May ’26 – 4:10pm:
Perhaps more importantly, in a world where the dominant superpower is running amuck, we have lost the safety in numbers that membership of the EU would have brought.
With a near €200bn trade surplus, the EU is in no position to stand up to President Trump. As any retailer that’’s survived for a while will tell you: the customer is always right. The EU’s weak position has been widely acknowledged…
‘This EU is finished’ [Die Welt, July 2025]:
https://archive.is/LRIDd
Do you want the UK to give up our better trade agreement with the US (now with tariff free access for Scotch whisky) and abrogate all our other trade agreements, just to join some sort of customs union of losers with the EU? It would be like putting on a diver’s weight belt and joining a sinking ship.
Safety comes through diversifying trade and the UK can now do that much better outside the EU. For the reasons why see my earlier Comments:
https://www.libdemvoice.org/rejoining-the-eu-part-2-what-12-trillion-really-means-for-britain-79498.html#comment-612467
and:
https://www.libdemvoice.org/rejoining-the-eu-part-2-what-12-trillion-really-means-for-britain-79498.html#comment-612472
@ Tristan,
“To show that Brexit really did cause no significant damage to the UK economy, you need to show that there would have been no difference between the UK economy as it now is, and the economy had Brexit not happened.”
Is there a name for this kind of logical fallacy? This is the unjustified shifting of the burden of proof and/or the raising of the bar to an impossible height. Short of moving to a parallel universe, in which the UK was still an EU member, it isn’t really possible to “show” or prove anything.
LibDems may well think their party would be doing far better with some other leader than Ed Davey but how can they “show” it? That, again, would require taking a look at what is happening in some other parallel universe.
In the case of the UK and Brexit, we can take a look at how other comparable sized EU economies, such as Germany and France, are faring and make a case around those.
I don’t see any former remainers actually doing that though.
It’s interesting that an article on whether GDP growth is a useful measure has evolved into a discussion on whether closer ties to Europe would increase GDP rather than when it would increase wellbeing. I’m pretty sure that it would increase both but it would not be a game changer for either. One reason we should look at policies that increase wellbeingrather than GDP is that nobody really has any idea how to increase UK GDP growth by more than a fraction of a percentage point. There are policies which would boost wellbeing significantly without much impact on GDP.
“It’s interesting that an article on whether GDP growth is a useful measure has evolved into a discussion on whether closer ties to Europe would increase GDP”
“It’s interesting that an article on whether GDP growth is a useful measure has evolved into a discussion on whether closer ties to Europe would increase GDP”
Interesting but not surprising. I agree with Peter Davies as far as his comment goes.
Turning to the article itself. I agree that GDP is not an adequate measure. But it is an relevant and important measure. We are not yet at a stage where technology allows us not to work. Well being, however measured is all very well but is not really a way of seeing an economy. Rather it is a way of distributing a surplus.
@ Peter Martin and Jeff
I will leave you both to your poor logic (*). other than to say that all models are wrong but some (here the theory of economics and free trade in particular) are useful. Meanwhile the options for Britain appear to be:
1 when Trump says “jump”, answering “how high?”
2 drifting around in mid-Atlantic
3 New military and economic alliances with the other European States, where we will have more arguments in favour in getting what we want than following the US into stupid wars on demand and sending the King over to beg for special treatment.
(*) I commend this blog which unpicks the (often contradictory) sillinesses of the arguments purporting to show Brexit was a good idea: https://chrisgreybrexitblog.blogspot.com/
@ Tristan,
Lib Dems supposedly do pride themselves on being rational and forming opinions based on observable evidence. Except when it comes to the EU and Brexit perhaps?
How about asking an impartial source how well or badly we’re doing? Like Google’s AI?
It does present a balanced picture and, I would claim, supports my view that Brexit has hardly made any difference, one way or another. I don’t agree with Jeff that It has actually improved anything that is clearly measurable, but I would say that a move away from the EU’s neoliberalism creates the freedom to actually improve matters if only our leaders would choose to make use of it.
Of course things weren’t great when we were in the EU which is why the vote went as it did.
This is what I get when I ask the question: “has Britain fared worse, economically, than France since Brexit?”
“Evidence on whether Britain has fared worse than France economically since Brexit is mixed and highly dependent on the metrics used. While some analyses indicate France has experienced better growth per head and lower inflation, others show the UK sustaining a higher nominal GDP and similar overall growth rates to major European peers …..”
You might want to take a look at the full answer for yourself.
@Peter Martin “You might want to take a look at the full answer for yourself.”
Interestingly, I asked Google’s for “the economic costs of Brexit”, and I got (amongst other things):
@Peter
You are still asking the wrong question. In determining whether Brexit was a sensible thing to do you have to create a counterfactual – what would have happened to Britain had we stayed “in”. That’s basic logic, sorry, and applies across all sorts of disciplines. You and Jeff are comparing apples and oranges; I am trying to compare apples with apples in the next door orchard receiving a different management regime.
As to Google AI, if you ask the question ” Would Britain have faired better economically had it stayed in the EU compared to staying out” you get:
“Economic analysis by 2026 overwhelmingly suggests that Britain would have fared better economically by staying in the EU,…………..” etc etc.
And if you ask ““has Britain fared worse, economically, than France since Brexit? What difference did Brexit make?” you get:
“As of early 2026, evidence suggests that Britain has economically underperformed relative to its potential and experienced a slower recovery than some G7 peers, though direct comparison with France is complex due to differing sectoral strengths and calculation methods” etc etc.
“I would say that a move away from the EU’s neoliberalism creates the freedom to actually improve matters”
The Corbynista view. Hard to square with that of the Brexit ultras that the Eu is a socialist distopia.
@ Tristan @ Daniel,
If there’s no real evidence that the UK has done worse than France after Brexit, and we’d probably still get the same answer if we used Germany as a comparison, but there is evidence that we’re 7% or so worse off because of Brexit, I suppose it could mean that Brexit has also cost Germany and France 7% of GDP!
I’ll have ask my ChatGBT what it thinks. It will probably tell me that I shouldn’t take any notice of Gemini (Google’s AI).
I wonder if one has more Remain sympathies than the other?
Yes, it is curious about what you call the “Brexit Ultras”. They have it all wrong about the EU but they still get the right answer.
@ Peter
If we must try to compare two different countries with each other, it makes sense to compare the two countries whose economies are most similar. According to the Economist, Britain is most like Spain.(*)
I asked Google AI “Is Britain doing better economically than Spain. Did Brexit make any difference?”. Here’s the answer:
“As of mid-2026, Spain is performing better than Britain in terms of economic growth, with its economy leading in Europe, while the UK faces lower growth projections and ongoing structural post-Brexit challenges. While the UK retains a larger overall economy and lower unemployment rate, Spain has seen higher GDP expansion and better recovery momentum since the pandemic”
and
“In short, while the UK has a larger total economic size and higher per capita wealth, Spain is considered a “top performer” in 2026 in terms of growth pace, while the UK’s growth is being constrained by the structural changes brought by Brexit.”
Hey ho.
(*) https://www.economist.com/britain/2025/11/27/which-country-is-most-similar-to-britain
@ Tristan,
You’re cherry picking. But, not very well. Spain has an unemployment rate of 11%. Even Mrs Thatcher only had it this high, in the UK, very briefly and it has been much higher. Some 25% + in the years after the 2008 GFC.
As is often said on this forum, there is more to economic wellbeing than economic growth.
I would have though Poland might be a better pick for you.
@ Peter
Cherry picking would be ask “which countries inthe EU are doing best economically?” and then compare those with Britain. I didn’t do that. I asked “which country in the EU is most like the UK economically. I then compared that country (Spain) with the UK without knowing the answer.
To test this – what is your response to the following statement?
Poland and Spain, (members of the EU) are both doing better economically that the UK following Brexit. That proves Brexit was a bad idea.
Logically this statement is the same as: “Germany and France, (both members of the EU) are both doing worse economically that the UK following Brexit. That proves Brexit was a good idea.
(Of course one can quibble about whether any of those countries are doing better than the UK or not.)
To pick up the fruit analogy, if Britain is an apple, Spain is a pear – more similar to the British apple than the Polish cherry is – even though Poland is said to be on course reach the same GDP per head as Britain by 2030.
I say the comparison of an apple with another apple in a different (hypothetical) orchard is useful and significant.
@ Tristan,
I agree with your logic. As I’ve previously stated, I don’t believe Brexit has made a measurable difference -economically. Most of the problems we’ve faced in the last 5 years or so have been caused by the effects of the Covid pandemic and wars. Firstly in Ukraine and now in Iran and the wider region.
It wouldn’t be quite so bad if your fellow Remainers did argue along the lines that countries like Poland and Spain were doing relatively well in the EU. Although it’s highly debatable, to say the least, that these newer economies are directly comparable with the older and more established economies of Germany and France.
However, what we typically get are statements claiming that Brexit has cost us £N amount of lost GDP, like £1.5 trillion for example, with no real observable supporting evidence whatsoever. At best these are based on some computer projection of what some highly optimistic model claims we would have done had we stayed in the EU