Richard Layard: ‘Money is not the only thing affecting people’s happiness’

How could we become a happier nation? One pioneering economist has spent the best part of a decade arguing that we simply must find an answer to this question – gaining the support of David Cameron, who backed the notion of happiness as “the new GDP”.

That economist won’t let it drop. He wants to reignite the whole debate and go further still. This is why the shocking facts come thick and fast in Professor Lord Richard Layard’s new book, and in conversation when we meet. To give just a few of the many he has stored up:

* Treating someone for depression or anxiety disorders costs on average £650. The success rate is 50 per cent. If they then come off Employment Support Allowance as a result, the saving to the taxpayer is £650 a month. So, a single outlay of £650 can save £650 a month.

* People with mental health problems cost the NHS an extra £2,000 each in their physical healthcare (in trips to A&E, for example), or £10bn in total. Spend more on psychotherapy and the cost would be covered by the saving on physical healthcare.

* Mental health issues account for half of all sick days.

* In Britain today, one adult in six suffers from depression or a crippling anxiety disorder. A third of families include someone who is mentally ill – yet fewer than one in three people suffering from mental health problems will receive treatment.

The argument for change posited by Layard and his co-author, David Clark, professor of psychology at Oxford, in their new book, Thrive, is a strong one. Mental health causes more of the suffering in our society than physical illness, poverty or unemployment – yet we do precious little about it.

Comedian Ruby Wax, no stranger to depression, is quoted approvingly by Layard and Clark: “I’m incredulous that it’s 2014 and in this seemingly evolved culture we live in we’re trying to hide the mentally ill elephant in the room, even though it’s draining the economy, and damaging the lives of [one in six] adults and one in 10 of all children.”

By stigmatising such a prevalent condition, says Wax, “we all are deranged… The fact that none of this information is discussed on a regular basis, publicised and subsequently dealt with, condemns us all to shame.”

I’m sitting with Layard in a coffee bar in west London. He’s best known for his 2005 book, Happiness: Lessons from a New Science. A leading labour economist, based at the London School of Economics, he maintains that government “does not do enough” to ensure the happiness of its citizens, that happiness is a more realistic measure of success than income, and that achieving a work-life balance should be the over-arching goal for public policy.

As befits the father of “happiness science”, he’s got one of those kindly faces that are coursed with laughter lines rather than wrinkles.

This latest work is an extension of the earlier one, pursuing the claim that if the Government cares for the wellbeing of its people, it should tackle the source of so much unhappiness, namely mental health, and secure a huge economic spin-off.

“Ever since I wrote Happiness I’ve been concerned as to what can be done about mental health,” he says. New, evidence-based therapies such as CBT, cognitive behavioural therapy, he maintains, are highly effective, and if the Government fully embraced them and made them freely available, the benefits would be enormous.

It would not, he insists, be a case of splashing out on more counsellors and hoping for the best. “The beauty of these treatments is that their success can be measured. It’s possible to measure the behaviour of a person before, during and after receiving treatment.”

Around seven million people are afflicted by a mental health condition. But only 15 per cent of that total are being treated. “It’s too low, it’s outrageous,” fumes Layard. Taking a hardline approach, it was reported yesterday that the Government cut benefit payments to people suffering from depression who refuse therapy or counselling, though it is unclear if there will be extra money to pay for more treatment.

At present, the funds go to GPs. They’d like to refer more patients for psychotherapy, but there’s a shortage of therapists. Instead, they prescribe anti-depressants – and in record numbers according to figures released last week, with annual NHS spending on the drugs increasing by one third in just a year, rising to £282m. A quarter more prescriptions are being made too, up to 53 million.

“We don’t have enough counsellors. We’ve got to train more people, but they can only be trained in-service,” he says. Training is occurring, in about 30 primary care trusts – but, he says, the urgent need is to cover the whole country. “People are crying off sick from work because of mental health; or people are just absent from work, again because of mental health; or if they’re at work, they’re not performing properly, again because of mental health.”

In all, reckons Layard, poor mental health or mental illness directly accounts for a loss of 4 per cent of GDP. Then, if you add on crime committed by mentally ill people, that is another 2 per cent of GDP. Then there’s the additional cost of providing physical care to those with mental health issues (not mental health beds or counselling, but other care such as visits to A&E) which is a further 2 per cent. The need for greater therapy provision has coincided with increased autonomy for local NHS commissioners. “The key target has to be for local commissioners to understand there’s a major health need in this area; to ensure they’ve got the tools to address it; and to impress upon them that it’s cost-neutral, that savings will pay for the extra treatment.”

His first battle is to raise awareness. “One third of all families, all households, contain someone who is mentally ill, but people simply don’t think about it. There’s never been a study on the effects of mental health on the workplace, on the daily lives of working people. Then, there’s the unquantifiable links between mental health and domestic violence, family conflict, drug and alcohol abuse, and child misbehaviour.”

Layard was made a Labour peer in 2001. He’s married to Molly, the ex-wife of Labour MP Michael Meacher. A social worker, she was created a life peer in her own right as Baroness Meacher in 2006.

His career, as he puts it, divides into three. “In the 1980s, I worked with Stephen Nickell on employment. There was complete confusion about unemployment, its extent and its effect. My best book was Unemployment, which said you could have lower unemployment if you gave more help to unemployed people to get them into work, and made that help conditional on them trying to get work. That became the basis of the European ‘Welfare to Work’ approach, and Labour’s New Deal.”

In the 1990s, he spent a lot of time advising organisations in the newly capitalist Russia, and assisting Labour ministers in opposition, then in government.

Then, in 2001, he started work on Happiness. “It was about making governments realise that the happiness of their country was not measured by the wealth of their nation. It was about measuring the quality of life as people experience it.”

There are, he says, “many problems with just focusing on national wealth. Money is not the only thing affecting people’s happiness. Money is not the whole story; it’s not remotely the whole story. It’s important we try to get a better balance between income, and human relationships and mental and physical health. People must understand that they would do well to preserve their human relationships; they should give them a higher priority than how much they earn.”

Our leaders must pay more attention to this. “It’s very important politicians don’t sacrifice the human side in the name of economic growth.”

If he had his way, says Layard, he would like to see “a survey of the well-being of employees put on the first page of every set of company accounts. A lot of managers put the stress on the technical side and don’t look at the human side. There’s a lot of evidence that a better working environment is good for a better home environment.”

He’s a leading lights in Action for Happiness, along with thinker Geoff Mulgan and educationalist Anthony Seldon. “We’ve now got 30,000 members and 90,000 followers. It’s about seeing how we can develop real communities and perform some of the functions in their lives that, say, the church, used to perform.” He laughs. “We’re full of high-minded aspirations, and we talk about things that we think really matter. We meet periodically to do that – we’re making real progress on it now.”

And once a year, with John Helliwell and Jeffrey Sachs, he produces the World Happiness Report. It’s produced by an offshoot of the United Nations and ranks countries according to happiness. In the last survey, Denmark was top, with the UK 22nd. “The Report’s had a million hits a year for two years,” he says.

He’s also involved with the Mindfulness movement, aimed at getting more life skills taught in schools and promoting the teachings of the Dalai Lama in the West.

For today, though, his passion is happiness and, in particular, mental health. “I’ve always been interested in happiness. I became aware of evidence-based psychotherapy, which meant that for the first time results could be measured – it was possible for instance to measure happiness of the old people in an old peoples’ home.”

He was one of the drivers behind Improving Access to Psychological Therapies, an initiative to widen access to psychological treatments.

Layard says: “Real evidence makes a big difference. Psychology is now being done in the same way as physical healthcare, through controlled trials and the resulting knowledge being replicable.”

But what about his own work-life balance, does he find any time to relax? His face breaks into a delightful smile. “I’ve always had a rule; I’ve never worked in the evenings. It’s always important to have a happy personal life, and to have other interests beyond work, like sport. And I’ve always made sure to have good holidays, well away from everything – that’s very important. I play a lot of tennis – I’m playing tonight.”

He looks at me and grins. He knows what I’m thinking. He’s 80 and he’s playing tennis tonight.

Born: 1934

Educated: Eton College (King’s Scholar), Cambridge University, London School of Economics

Made: a life peer, Baron Layard of Highgate

He is: a Labour peer but his wife, Baroness Meacher, a peer in her own right, is a crossbencher

Career: Senior research officer to Robbins Committee on Higher Education; Labour economist; founder of the Centre for Economic Performance at LSE; developed “happiness economics”, wrote in 2005, Happiness: Lessons from a New Science; in 2014, co-author of Thrive, advocates expansion of treatment of mental health to help individual and national well-being and economy.