You can't legislate for happiness, but you can try

What do we want for the new year? Most of us resolve to be thinner, fitter and better (probably in that order) but there's not much a government can do to help us there. Those of us obsessed with the daily doings of government often forget how peripheral it is to most people's general happiness.

Government may marginally affect how much money we have in our pockets. But sophisticated research into happiness suggests that there is no correlation between increases in cash and increases in happiness for most people. (Yes, all those old homilies really are true.) Once lifted above penury, money doesn't much matter. Yet money is the only way governments measure what they do. We have economic, trade and production indicators, nice, easy tallies of national success and failure, but those tell us very little about how we feel, individually or as a nation.

Alongside those figures, perhaps we should collect National Happiness Ratings (NHR) as the true measure of our state. Annual figures would have to be seasonally adjusted, since monthly figures might dip sharply at this low ebb of the year with many suffering from SADness ( seasonal affective disorder), or just post-Christmas gloom. But NHR could be a critical test of a government's stewardship. After all, a prime historical purpose of government is to secure the greatest happiness for the greatest number: the American constitution even has the pursuit of happiness as a right. But the pursuit of wealth seems to be all governments can manage - a more modest ambition.

Lifting the national spirits is a difficult business. Simply by being elected, this government gave us a good couple of months' euphoria. The most unlikely people, who hadn't even voted for it, found themselves surprised by an unexpected glow of optimism. It wasn't just glee at seeing the previous incumbents slinking away in all their shabby, mean-minded, valueless tatters. Inchoate and maybe unreasonable hope was in the air.

Then events began to eat into Labour, the way events always do. Have they lost their way? Do they still know what they are there for? Can we remember what we hoped for and why we hoped so much? Yes, is the answer. There is still plenty to hope for. OK, so the lone-parent benefit fiasco suggests they lost the plot, if the plot was to make the lives of the poorest better. It was, though, a bungled botch, not an emblem of their true intent. But it has left them with twice the obligation to prove their good intentions and recover that spirit of hope and generosity people felt at their election.

What could this government do to push up the National Happiness Rating? The easiest place to start is by tackling those who are unhappy for the most obvious and tangible reasons - the poor for whom money really does matter. Start, say, with the 1.8 million poor pensioners living on income support. They are no use to anyone, their productivity and employment irrelevant on every other national indicator. But if happiness counted, the NHR would get a terrific boost by giving a large pensioner supplement on income support, easily financed out of the billions to be saved by abolishing National Insurance benefits for all the better off. Ditto the severely disabled and anyone else who, for whatever reason, will never work again. That would make everyone feel better.

But most people are not poor. So if the Government could really persuade itself to believe that money is not everything, it could be less fearful of taxes and more ambitious about generating public hope, pleasure and pride. Every pound spent well on the public good stands a far better chance of improving the NHR than each extra pound in the pocket. The right says the individual will always spend his or her own money better than the state - but over 18 years they have proved themselves conclusively wrong.

The Conservatives left behind a public squalor and dilapidation which demoralised and degraded us. While the huge growth in home ownership was one of the few Tory achievements, it was partly soured by the growing shabbiness and lack of pride in all the public places and spaces where people spend so much of their time once they leave their front doors.

Children spend years in seedy, run-down schools; it's hard to make them believe that what goes on in the classroom is valuable if the school itself is like a leaking, run-down dosshouse with stinking lavatories and no books. Doctors and nurses may still be heroes, but if people visit grubby, understaffed hospitals that run out of sheets, they don't feel the pride they did in a national health service.

How are people to feel good about work, when travelling there grows more hellish every year, with chaotic railways, crammed carriages and a London tube system fast becoming a nightmare? (Last week I spend half an hour comforting a distressed elderly woman panicking as we were stuck in a tunnel while she was missing her long-awaited hospital appointment.)

Governments can do little about personal happiness: some people are naturally disposed to be happy, others never will be. Try as they foolishly might, governments can do nothing to create the stable, happy families most people want. Nor can governments do much to ease people's anxiety about insecure working conditions in this global market.

But out there, in the public part of our lives, this government could do much to raise spirits. First it has to believe it itself. It's time the Government started to say that well- being depends at least as much on public spending for the common good as it does on private spending. It is not old socialist redistribution, but an obvious truth: some of the things that make us feel good can only be bought communally. If no one dares say that, certainly no one will dare do it.

The economic gains of the past 18 years - most people are 30 per cent richer - were invisible to the public eye. Video recorders, foreign holidays, mobile phones, new cars, video cameras, all these were private pleasures. Meanwhile, out on the streets and in the public places, we looked and felt seedy and run-down. It wasn't just the obvious signs - new battalions of beggars and rough sleepers, the peeling paint on every public building - there was a deliberate denigration of civic pride, public values, public service.

Now is the time for a good government to make our public wealth match our private riches. If that means spending a few more public pounds and a few fewer private ones to redress the balance, so be it. Good public transport, beautiful parks, bright streets, inspiring school buildings, museums, public sports centres and gleaming hospitals would make us all feel better about ourselves.