Cameron aiming to measure people's happiness

The Prime Minister announced that the Office for National Statistics has been asked to devise measures of progress and will lead a public debate about what matters most to people.

He denied the move was "airy-fairy and impractical" and said it was important to gain a picture "of how life is improving" to inform Ministers in drawing up policy.

"From April next year we will start measuring our progress as a country not just by how our economy is growing, but by how our lives are improving, not just by our standard of living, but by our quality of life," Mr Cameron said in a speech at the Treasury.

He insisted the move did not mean sidelining economic growth as the country tried to recover from the recession but said that Ministers need to take a broader perspective. "We'll continue to measure GDP (Gross Domestic Product) as we've always done," Mr Cameron said.

"But it is high time we admitted that, taken on its own, GDP is an incomplete way of measuring a country's progress."

He quoted the former United States senator Robert Kennedy, who described how GDP "measures everything... except that which makes life worthwhile".

Addressing what he called "the suspicion that all this is a bit airy-fairy and impractical" he recognised that it was impossible to "capture happiness on a spread-sheet".

"If anyone was trying to reduce the whole spectrum of human emotion into one snapshot statistic I would be the first to roll my eyes," he went on. "But that isn't what this is about.

"Just as the GDP figures don't give the full story of our economy's growth – but do give a useful indicator of where we're heading – so this new measure won't give the full story of our nation's well-being but will give us a general picture of how life is improving."

Measuring wellbeing has been championed by Nobel Prize-winning economists and is being examined by other countries such as France and Canada.

Potential indicators include health, levels of education, inequalities in income and the environment.