Britain has a sick economy. That’s not a metaphor for the flatlining of growth over the past year, but a statement of fact. Never before have so many people been out of the labour force due to long-term sickness or disability. Never before has there been such a loss of human potential.
Better health is desirable in itself. Ill-health makes people miserable, so it shouldn’t really matter whether or not there were economic benefits from reducing the number of people who might want to work if they fell well enough to do so. Gross domestic product is not everything.
But in this instance, fewer people inactive because of health issues would be good both for personal wellbeing and for the economy. It is a win-win as opposed to the current lose-lose.
Here’s how things currently stand. The number of people who say they are not looking for work because of long-term ill health rose by 86,000 in the first three months of 2023 to 2.55m and is now 438,000 higher than it was before the start of the pandemic three years ago.
Clearly, Covid-19 represented a serious blow to the nation’s health and put pressures on an already severely stretched NHS. Of that 438,000 increase, some will be suffering from long Covid, while others found the stress of lockdown followed by the cost of living crisis affecting their mental health.
There are two things that would help instantly: an end to the strikes that have been affecting the NHS for months, and extra investment to start clearing the patient backlog. The government’s long-running battle with nurses and junior doctors has been a spectacular own goal.
At the start of 2023 Rishi Sunak made five pledges. One was to have shorter NHS waiting lists, currently running at more than 7 million for England alone, by the end of the year, while another was to get the economy growing.
The two are linked. A quarter of the 2.55 million people inactive due to ill health say they want a job; better and speedier treatment would help them find one, fill some of the million job vacancies in the economy and boost growth.
To make a real difference will require more than the cosmetic measures contained in Jeremy Hunt’s “back to work” budget. As the Chartered Institute of Personnel and Development has rightly noted, radical reform of statutory sick pay is needed to expand coverage to those on the lowest incomes and increase its generosity so that it is closer to the level of someone earning the “national living wage”.
One thing is certain: toughening up the eligibility criteria for long-term sickness benefits will do nothing other than make the lives of some of the most vulnerable people even harder. The deep-seated nature of Britain’s ill-health problem means a punitive approach won’t work.
It would be wrong to assume that the UK went into the crisis a healthy nation. Rather, the Covid-19 shock aggravated worrying pre-pandemic trends. A recent report from the left-leaning Institute for Public Policy Research thinktank said the death rate from all causes fell between 1990 and 2011, but then started to rise. The prevalence of cancer, diabetes, depression and hypertension all increased in the 2010s. In 1960, the UK ranked 7th for life expectancy among the rich nation members of the Organisation for Economic Co-operation and Development. By 2020 it had dropped to 23rd.
According to the IPPR study, poor physical and mental health is costing individuals close to £2,000 a year in lost earnings and reducing the size of the economy by £43bn. Illness is, unsurprisingly, unevenly distributed geographically and by class, gender and ethnicity.
Times have been hard for the past 15 years. The 1990s and the early 2000s saw a long economic upswing in which real incomes grew and – under the Labour governments – spending on the NHS grew faster than at any time since it was created in 1948. Since 2007, there have been two deep recessions that have left wages – in inflation-adjusted terms – lower than they were 15 years ago.
Jobs have been reasonably easy to come by during this period, but they have often been low-paid, insecure and non-unionised. More than 50% of those living below the official poverty line are in a working household, and the constant struggle to make ends meet has taken its toll, both physically and mentally.
At the same time, spending on the NHS has become far less generous, with nugatory increases in funding since 2010. The need to make savings did not just mean that there was a shortage of capacity when Covid struck, it also meant underinvestment in prevention and mental health.
This is a bad place to be, and rather than setting itself the modest target of reducing waiting lists by the end of the year, the IPPR says the government should show more ambition and commit to a 30-year mission to turn the UK into the healthiest country on the planet.
That’s a worthy aim, but achieving it won’t be easy. It will require – among other things – better paid and more secure jobs; a greater role for unions in the negotiation of working conditions; a willingness to embrace new ideas such as hybrid working and shorter working weeks; and a recognition that the NHS needs to become a genuine National Health Service rather than a national illness service dealing with problems that could have been prevented.
Above all, it will require a recognition that inactivity as a result of ill-health is a symptom of a deeper malaise: the unhealthy state of modern British capitalism.
Larry Elliott is the Guardian’s economics editor
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