Can a ‘Budget for working people’ finally ‘Get Britain Working’?

When all is said and done, we are all going to be affected by such a wide-ranging and significant Budget, whose main task was laying the groundwork for longer-term investment in things like infrastructure, housing and public services.

Photograph: iStock/stocknshares

All of which will take time to bear fruit. During which, we’ll have another election and plenty of other events to contend with. The political choice the Chancellor made was to target the more immediate benefits on the least well off in society, with increases to the National Minimum Wage, certain in-work benefits, and the state pension next year.

A perhaps more hidden, but nonetheless important group, is the growing number of people who are classed as being ‘economically inactive’ and who, for a range of reasons including their health, are no longer in or seeking to be in work.

This issue is partly a legacy from the pandemic which, although the numbers were rising beforehand, Covid accelerated. Now, over nine million people aged between 16 and 64 are neither in work nor looking for a job, which is 700,000 more than before the pandemic.

The implications for the UK economy and employers of this cannot be overstated. We have lost a sizeable chunk of our workforce at a time when we need to be growing our economy and becoming more productive. In fact, the UK is the only G7 country with higher levels of economic inactivity than before the pandemic, with 2.8 million people out of work due to long-term sickness.

There is also the personal cost to individuals, and although most are between 50 and 64 years old, long-term sickness is on the increase across all age groups.

British Safety Council chief executive Mike Robinson FCA: "We have lost a sizeable chunk of our workforce at a time when we need to be growing our economy and becoming more productive."

Which is why a new £240 million package was announced two days ahead of the Budget to help people back into work and drive down levels of economic inactivity. Some of this will pay for the Government’s so-called ‘Get Britain Working trailblazers’, or pilots, in which local areas will offer both disabled people and those with health conditions help to access both existing and new support.

We will also get a ‘Get Britain Working’ White Paper from the Department of Work and Pensions this autumn, setting out further reforms to welfare and employment support. Nearly a million people on the older health and disability employment benefit will move to Universal Credit three or four years sooner than planned. And underpinning all of this will be what the Government is calling a “high expectation and high support” approach.

All of this will also require something else, of course, which is for employers to be able and willing to provide jobs to people who may have been out of the labour market for some time, and to support them once they return. This is asking something else of businesses, many of which will already be paying more tax and facing tighter employment regulation. However, the prize could be significant.

Get this right, and not only will people with long-term health conditions receive better and more timely support through the health system, they will be able to earn more in decent jobs that bring better rewards and protection. At the same time, employers will benefit from skills and talent that would have otherwise gone for good.

Clearly, none of this will just happen. It requires a national focus, on a greater scale than the initial ‘trailblazers’ and trials the Government is currently planning.

In some ways, the good news is that none of this is particularly new. But maybe, finally, we can start to turn the tide on this hidden and growing challenge which is holding not only our people back but also our economy.