A protracted disease crisis threatens the UK economy

A queue of ambulances outside the emergency department at the Royal London Hospital on November 24, 2022 in London. In the UK, the number of ‘economically inactive’ people – those who are neither working nor looking for a job – aged 16 to 64 has risen by more than 630,000 since 2019.

Leon Neal/Getty Images

LONDON – Along with soaring inflation and energy costs, the deterioration of Brexit-related trade, and the ongoing recession, the United Kingdom’s economy is being hit by record numbers of workers reporting long-term illness.

The Office for National Statistics reported that between June and August 2022, about 2.5 million people cited long-term illness as the main reason for economic inactivity, an increase of half a million since 2019.

The number of “economically inactive” people – those neither working nor looking for a job – between the ages of 16 and 64 has risen by more than 630,000 since 2019. Unlike other major economies, recent UK data shows no sign of losing those Workers need to return to the labor market, even as inflation and energy costs put enormous pressure on household finances.

The UK avoided mass job losses during the Covid-19 pandemic as the government furlough scheme supported companies to retain workers. But since the lifting of the lockdown measures, the country has witnessed a mass exodus in the labor market at rates unique among advanced economies.

in that last month’s reportThe Office for National Statistics said a combination of factors could be behind the recent rise, including National Health Service waiting lists reaching record levels, an aging population and the effects of prolonged Covid.

“Young people also saw some of the largest relative increases, and some industries such as wholesale and retail were affected more than others,” the Office for National Statistics said.

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Although the effects of the aforementioned problems were not quantified, the report noted that the increase was driven by “other health problems or disabilities,” “mental illnesses and neurological disorders,” and “problems associated with [the] back or neck.

Austerity legacy

Jonathan Portes, professor of economics and public policy at King’s College London, told CNBC that the extent of labor market depletion is likely a combination of prolonged Covid. other health issues related to the pandemic such as mental illness; and the current crisis in the NHS.

Moreover, he noted, factors that directly harm public health—such as increased waiting time for treatment—could have an indirect effect: People may be forced to leave the workforce to care for sick relatives.

“It is worth remembering that the UK has been here before, arguably at least twice. In the early 1990s the UK saw a sharp recovery, with low unemployment, after ‘Black Wednesday’, but also saw a huge and lasting rise in the number of people claiming with disability benefits,” Ports said, adding that not working is generally bad for health and employability.

“Clearly the government is not doing much about this. Aside from resolving the crisis in the NHS, the other major policy area is to support the sick and disabled to return to work, and there isn’t enough happening – instead the government is harassing people on Universal Credit With punishments and punishments, which we know don’t help much.”

in his speech Autumn statementMinister of Finance Jeremy Hunt announced That the government would ask more than 600,000 people receiving Universal Credit — social security payments tested for the financial means of low-income or unemployed families — to meet with a “job coach” in order to make plans to increase working hours and earnings.

Hunt also announced a review of issues preventing a return to the job market and has committed 280 million pounds ($340.3 million) to “eliminate benefits fraud and errors” over the next two years.

Although the pandemic has greatly exacerbated the health crisis, causing a hole in the British economy, the long-term rise in sickness claims has already begun in 2019, and economists see many potential reasons why the country is uniquely vulnerable.

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Portes noted that the government’s austerity policies — a decade of sweeping cuts in public spending implemented after former prime minister David Cameron took office in 2010 and aimed at curbing the national debt — had had a significant role in leaving the UK exposed.

“The UK was particularly vulnerable because of austerity – NHS waiting lists were rising sharply, performance/satisfaction was falling sharply, well before the pandemic,” said Portes.

“Support for those receiving invalidity and disability benefits was unloaded in early 2010. More broadly, austerity has led to a steeper gradient in health outcomes by income/category.”

Inequality and mounting queues

This is proven in national data: The Office for National Statistics estimates that between 2018 and 2020, males living in the most deprived areas of England lived an average of 9.7 years fewer than those living in the least deprived areas, with a gap of 7.9 years. for females.

The Office for National Statistics noted that both sexes experienced “statistically significant increases in inequality in life expectancy at birth from 2015 to 2017”.

In the wake of the pandemic, NHS waiting lists have grown at their fastest rate since records began in August 2007, according to a recent House of Commons report, with more than 7 million patients on the waiting list for consultant-led treatment in England as of September.

However, the report noted that this is not a recent phenomenon, and that the waiting list has been growing rapidly since 2012.

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