Putting a stop to volunteer work and telling people to hit the streets to take up sex work and drug dealing would drive up GDP, a former Whitehall chief said as he savaged the Government’s botched growth plans.
The “radical” tongue-in-cheek suggestion was made by Lord Gus O’Donnell at Westminster as he argued maximising the economic measure was “really, really stupid” and “not something any grown up wants to do”.
The independent crossbencher gave his scathing assessment in the House of Lords after new Chancellor Jeremy Hunt junked the bulk of the Tory administration’s tax-cutting plans, aimed at bolstering UK growth, in the face of financial turmoil.
Let's stop anybody volunteering and tell them they have all got to get on the streets, take up prostitution, start selling illegal drugs. Because both of those things count in GDP, volunteers don't— Lord Gus O'Donnell
The mini-budget fiasco triggered a backlash which led to the political downfall of Prime Minister Liz Truss after 44 days in Downing Street.
Speaking in a parliamentary debate on the impact of the cost of living on public wellbeing, Lord O’Donnell, who headed the civil service for six years, said: “I have been very dubious about the idea of growth and maximising growth.
“Let’s be clear, maximising GDP growth is really, really stupid. This is not something any grown up wants to do.
“GDP basically measures a pound irrespective of who gets it.”
He added: “How do you reconcile levelling up with maximising GDP growth? They are just wildly inconsistent.”
The peer said the economist who originally created GDP specifically warned against the measure of activity being used as a gauge of success.
German energy usage is down by 20%. They are turning off the lights at 9pm in Berlin. Public buildings have been ratcheted down. There are lots of things you could do. We need to get on with this. We should be doing it now— Lord O'Donnell
Lord O’Donnell, who previously served as permanent secretary at the Treasury, told the upper chamber maximising GDP growth is “completely straightforward”.
He said: “I can concrete over the south east of England, build lots of houses, or, if you want something a bit more radical, I could explain this stuff about charities and volunteers – let’s get rid of them.
“Let’s stop anybody volunteering and tell them they have all got to get on the streets, take up prostitution, start selling illegal drugs.
“Because both of those things count in GDP, volunteers don’t. You’d have to be stupid about maximising GDP.”
Lord O’Donnell said a “far superior goal” is maximising wellbeing and reducing inequalities, which he said would be harder with any cuts to public spending.
Spelling out a wellbeing approach to tackling the current cost-of-living crisis, he urged a rethink of the energy support package.
He said: “You are giving a lot of money to a lot of very rich people. You could target that support much better and get a massively bigger wellbeing impact.”Lord O’Donnell also stressed the need to improve the country’s energy efficiency.
He said: “We are being far too timid and far too slow.
“German energy usage is down by 20%. They are turning off the lights at 9pm in Berlin. Public buildings have been ratcheted down. There are lots of things you could do. We need to get on with this. We should be doing it now.”
Following the recent chaos, he also pressed for “stability and predictability” in Government and called on ministers to think about the wellbeing of civil servants, who have faced political criticism in the past.
He said: “The prospect of cuts in real pay and redundancies is bound to damage morale. Treating them with respect and thanking them for their work would cost nothing and be a very good start.”
