Labour Economist: Paying More Taxes Will Make People Happier

Labour peer and economist Lord Layard has spent years researching happiness. He tells Sophie Church why putting happiness at the heart of policy will keep Labour in power for longer

Economist Lord Layard has dedicated his working life to the study of happiness. Through writing books on wellness, founding an Action for Happiness campaign, and launching a wellbeing report at the World Economic Forum in Davos, the 90-year-old Labour peer has come to a conclusion: paying higher taxes makes people happier in the long run.

Taxes have often proved a difficult talking point for Labour.

In the recent general election campaign, for example, the Conservatives’ losses were mitigated by warning teetering Tory voters that Labour, by precedent, would raise taxes when in power. But according to Layard, the new Labour government will only be able to make Britain a happier, more prosperous place by increasing taxes to fund public services.

Speaking before the election, he says he is “quite sure” that now-Chancellor Rachel Reeves understands this philosophy.

“We’ve got to really get away from a situation in Britain where people don’t think of services and taxes in the same breath, they think of it in two breaths; they want the services but they think taxation is a robbery,” he says from his office at the London School of Economics (LSE).

“This is a completely hopeless way of thinking. Taxation is a way of helping the community to provide a service.”

Layard warns this debate about raising taxes should not “be done undercover, which is the way, typically, governments sneak up the level of taxes”. So would Reeves, who has only just got her feet under the desk at No 11, be willing to speak openly about raising people’s taxes?

“I’m sure,” he says