Sickness drags down UK economy as job vacancies go unfilled

Rishi Sunak wants growth, but ONS figures show rising levels of inactivity because of ill-health.

Unwelcome though it is for a government facing strikes by doctors and nurses in the months ahead, the message from the latest labour market figures is clear: Britain is already the sick man of Europe.

More than 2.5 million people who are economically inactive cite long-term sickness as the reason why they are not looking for a job – and the number is rising sharply.

Data from the Office for National Statistics shows the total number of people inactive because of ill-health up by more than 150,000 in the past year and by 89,000 in the three months to February.Clearly this matters for the individuals affected and the upward trend appears to reflect the lingering impact of the Covid-19 pandemic. But it also matters for the economy at a time when – despite a fall in inactivity overall as a result of more young people working – there are still more than 1m job vacancies.

As Jane Gratton of the British Chambers of Commerce noted, the unfilled posts represent a drag on firms, preventing them from taking on new work and leading to upward pressure on pay. Annual private sector earnings growth is running at just under 7%.

Ideally, the prime minister, Rishi Sunak, and the chancellor, Jeremy Hunt, would like to have the NHS working at full speed to reduce the record numbers of people waiting for hospital treatment. In England alone, the figure is more than 7 million.

In reality, the opposite is the case. Strikes over pay and conditions will lead to even longer waiting lists, making it harder to reduce the number of people inactive because of long-term sickness.

Ben Harrison, the director of the Work Foundation at Lancaster University thinktank, said: “The OECD recently found that the UK has suffered the biggest decline in workforce participation of any G7 economy since the pandemic.”

Tony Wilson, the director at the Institute for Employment Studies, said: “Figures for long-term ill-health are particularly worrying, rising again in the latest data to a new peak of over 2.5 million. This is being driven in particular by people staying out of work longer, rather than more people leaving work now.

“So we need to focus in particular on how we help those who want to work to get back in – with specialist employment support, faster access to health services and more inclusive recruitment and workplace support.”

Reducing NHS waiting lists was one of the five policy pledges made by Sunak to voters at the start of the year, and a summer of strikes will make it harder to meet that promise. It will also make it harder to meet one of the prime minister’s other objectives: to return the economy to growth.

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