Everyone’s talents must be included in growing our economy
The Budget must help British businesses to grow, and British people to succeed. The Chancellor can do both if he can help more people into jobs.
Three quarters of UK companies struggle with labour shortages - although we aren’t alone in this internationally. With over a million job vacancies, employers have to find talent in new places. They should be open to the nearly nine million people who have not recently looked for work. In the jargon, they’re “economically inactive”.
This is more than one in five people of working age. It includes people who have retired early, are long-term sick or disabled, or have caring responsibilities.
1,700,000 people among the nine million say they want jobs. If businesses don’t match those people with their 1,100,000 vacancies then the country is stunted. And too many people are being wrongly written off.
Jeremy Hunt is right to look at why fewer Brits are participating in the economy. Taxes must stretch to pay for every person who is on benefits rather than in work. Immigration is not the solution to businesses’ gaps if billions of pounds are spent in failing to get British workers fit for where their talents can take them.
And every unfilled vacancy now is a missed chance for a person to gain skills and experience. So the cost of having millions of people who are not in work but who could be in work is both billions of pounds and an appalling waste of opportunity. The human price of two and a half million people out of work with long-term sickness is an even greater tragedy: we should be moving heaven and earth to treat them and help them be well.
We know that work is good for health, but the NHS does not particularly link up with work. Musculoskeletal problems and mental ill health are two of the most widespread constraints on people’s functional ability, but in many cases are treatable. As Hunt correctly prescribes: “The NHS must help people into work.”
So we have to bust the NHS backlogs, and consider all ways to get quicker treatment to those who have a chance of being in work. Simple things like GPs’ guidelines should link to managing at work, as the Federation of Small Business argues.
Businesses should invest in occupational health, to help people stay healthy in the workforce. The government is funding the best ideas.
Work will not be right for all. But too many people are being written off from even trying a job. At the budget, Hunt should reform benefits to separate eligibility for money from what work a claimant could do with the right help, and reduce assessments. Instead let’s help people to try work where they wish to, so their talent is not wasted. A disability employment endowment fund could back the best practice too.
We need a range of solutions, because people’s motivations and incentives vary, but make no mistake that we are facing an urgent imperative.
Even taking some small steps right now will contribute to the Prime Minister’s valuable goals of growing the economy and halving inflation, because continued labour shortages block growth and bring inflation. Rishi Sunak is morally right to cut NHS backlogs anyway, but he must also do so with this urgent need in mind, to get British people and the British economy back on their feet together.
Some estimates suggest we could boost GDP by thirty billion pounds every year if we properly addressed this problem - that’s the size of the whole defence budget. So we should aim high.
We could learn from Sweden, where 15% more people aged 55-64 are in work than here. We could learn from Japan’s ageing society, which could lose 20% of its workforce in the next 20 years so values its older workers. On ill-health and disability, we could look to Australia, which has reworked welfare to provide people with reasonable and necessary supports and has clear participation expectations so that people get help to find and keep suitable work. And making sure the workplace is open to all, Canada sets a clear vision of a country with no disabling barriers by 2040 through its Accessible Canada Act.
Everyone’s talents must be included in growing our economy - and everyone should have the chance to grow. But government can only do so much. Businesses must invest in both skills and health to get the workforce they need.
Together, the government and employers can bridge this gap. Without action starting at next week’s Budget, the gap will get even bigger - and that would be a tragedy for millions of Britons.
Chloe Smith is the former Conservative MP for Norwich North and a former Secretary of State for Science, Innovation and Technology.
