A long-term illness crisis is threatening the UK economy

A line of ambulances outside the emergency department of the Royal London Hospital on Nov. 24, 2022, in London. In the UK, the number of “economically inactive” people – those who are not working or looking for work – between the ages of 16 and 64 has risen by more than 630,000 since 2019.

Leon Neal/Getty Images

LONDON – Along with sky-high prices and energy bills, Brexit-related backlogs and ongoing recessions, record numbers of workers reporting long-term illness are weighing on the economy UK.

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 unemployment, an increase of about half a million since 2019.

The number of “economically inactive” people – those who are not working or looking for work – between the ages of 16 and 64 has risen by more than 630,000 since 2019. In contrast to large economies others, recent UK data does not show that these lost workers are returning to the labor market, even if the price of electricity and energy is putting a lot of pressure on family income.

The UK has avoided job losses during the Covid-19 pandemic as government stimulus programs helped businesses to retain workers. But since the lockdown was lifted, the country has seen a labor market exodus of extraordinary proportions among advanced economies.

In its report last month, the ONS said a number of factors could be behind the recent increase, including National Health Service waiting lists at record highs, an aging population and the impact of prolonged Covid-19. .

“Young people have also seen some of the biggest relative increases, with some industries such as wholesale and retail affected more than others,” the ONS said.

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Although the impact of the above-mentioned issues has not been quantified, the report suggested that the increase is “health problems or other disabilities,” “mental illness and anxiety disorders” and “related problems. [the] back or neck.”

The legacy of austerity

Jonathan Portes, professor of economics and public policy at King’s College London, told CNBC that the number of job losses could be a combination of long Covid; other health problems related to illness such as mental illness; and the current crisis in the NHS.

On top of that, he said that factors that directly harm public health – such as waiting times for treatment – may have an impact: people may leave the workforce to care for sick relatives.

“It is worth remembering that the UK has been here in the past, arguably at least twice. In the early 1990s, the UK saw a sharp recovery, falling without employment, after ‘Black Wednesday, ‘ and he saw a large, permanent, rise. The number of people who say that the benefits are related to the inability,” said Portes, adding that working is not bad for health and work.

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“The government is clearly not doing much about this. Apart from solving the problems in the NHS, another key policy area is support for sick and disabled people to return to work, and almost and it will happen with this – instead of this. The Government is threatening people with Universal Credit with penalties and restrictions which we know are not helping much.”

In his recent autumn speech, Finance Minister Jeremy Hunt announced that the government will ask more than 600,000 people receiving Universal Credit – a social security payment aimed at low-income or unemployed families – to meet ” project manager” to set up a plan. increase hours and income.

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Hunt also announced a review of issues that prevent access to the labor market and will invest £280 million ($340.3) to “tackling profit fraud and error” over the next two years.

Although the pandemic has worsened the health crisis and left a hole in the UK economy, the rise in long-term illness claims began in 2019, and economists see many reasons for the country’s be unique.

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Portes suggested that the government’s austerity policies – a decade of public spending cuts implemented when former Prime Minister David Cameron took office in 2010 with the aim of recovering the national debt – had a big part to play in leaving the UK exposed.

“The UK is the most vulnerable due to funding constraints – NHS waiting lists are rising significantly, and performance/satisfaction is falling significantly, before this pandemic,” said Portes.

“The support for the disabled and disability benefits were eliminated in early 2010. Broadly speaking, austerity has led to a sharp gradient in health outcomes by income/class.”

Inequality and waiting lists are growing

That means national data: the ONS estimates that between 2018 and 2020, men living in the most deprived areas of England will on average live 9.7 years less than those in the least deprived areas, and the gap is 7.9 years for women.

The ONS said both sexes saw “significant increases in life expectancy at birth from 2015 to 2017.”

After the pandemic, NHS waiting lists grew at their fastest rate since records began in August 2007, a recent House of Commons report revealed, with more than 7 million patients on waiting lists for clinical treatment conducted in England as of September. .

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

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“Before the epidemic, in December 2019, the waiting list was over 4.5 million – almost two million higher than in December 2012, a 74% increase,” he said.

“In other words, while the epidemic causes the rise of the waiting list, it also takes place years before the epidemic.”

Former Bank of England policymaker Michael Saunders, who is now a policy advisor at Oxford Economics, also told CNBC that Covid has affected the UK significantly in terms of severity, and that some of this may be the result of the country’s population is high. of pre-existing medical conditions – such as obesity – which may have been triggered by Covid.

“The UK is an unpredictable country, and that may be part of the reason that even if we have had the same Covid-19 as other countries, we could have a huge impact on public health, because if I like that you have a large. base of people that it will affect a lot,” he added.

Saunders suggested that any growth plan from the government should include measures to address these health care challenges, which are currently inextricable from the workforce and the economy.

“It’s not just a health issue, it’s an economic issue. It’s important in both ways. I think it’s important enough as a health issue, but it should be more important because of the potential impacts.” creating one that feeds off of these other economic problems.”

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