ALEX BRUMMER: Inactivity in the UK workforce will be a major problem for the next occupants of 10 Downing Street
BBC presenter Huw Edwards is far from alone in dealing with mental health issues.
In its latest report on the outlook for Britain’s public finances, the independent Office for Budget Responsibility (OBR) focuses on the rise in mental health problems, arguing that it is responsible for half of the increase in health care-related workforce retirement since the pandemic. .
Overall health-related inactivity in the workforce rose to 440,000 in the three months to April 2023 and is now above the post-Covid level of 350,000.
There are a staggering 2.6 million people of working age (6.1 percent of the population) out of the workforce for medical reasons.
The consequences are terrifying for the next occupants of 10 Downing Street.
Time bomb: General health-related inactivity in Britain’s workforce rose to 440,000 in the three months to April 2023 and is now above the post-Covid-19 level of 350,000
It will contribute to chronic labor shortages (there are still 1 million job openings), raise workers’ wages and make it harder to fight inflation.
Ill-health will add £6.8bn to welfare bills in the 2023-24 fiscal year and deprive HMRC of £8.9bn of tax revenue.
In what may come as a shock to red-haired groups demanding more cash from the public purse, the OBR suggests that the generosity of the benefits system, from universal credit to disability and other benefits, has made it easier to sit on the bench. sofa or walking the dog who are facing poor income growth.
The combination of sizeable NHS waiting lists (striking doctors, mind you) and an overly generous and easily accessible benefits system means that for large slugs of the population, work no longer pays.
The OBR fiscal report as a whole will not be very encouraging for Labour. It’s nice for Sir Keir Starmer to promise fabulous new green jobs, but if the economic slack continues, there will be no one, unless the doors are opened to large-scale migration, to do it.
Looking at OBR’s budget scenarios, it’s easy to see why Labor’s shadow chancellor, Rachel Reeves, is committed to a tight rein on spending.
The UK is facing the triple whammy of an aging population, the loss of fuel taxes as the electric vehicle revolution gains momentum, and larger defense budgets as tensions rise in Europe and the Pacific.
Any hope of reducing current debt levels, close to 100 percent of total output and the highest in 60 years, looks bleak.
The solution is to grow the economy by making investment and entrepreneurship more attractive by cutting taxes and delivering on post-Brexit promises of revolutionary free trade agreements with the world’s fastest-growing economies.
Why are we waiting?
truths
The barriers to building homes in the UK should never be underestimated, which is why successive governments fail to meet their aspirational targets.
No doubt Sir Keir will meet the same fate even if he manages to break through the planning barriers and concrete above the green belt.
The Macmillan Tories of the late 1950s and 1960s managed to hit the mark due to the German gift of bomb sites and the birth of tower blocks, many of which later became dysfunctional.
Just how intractable a housing problem has become is evident from the update on our largest residential builder, Barratt.
By historical standards, mortgages are no more expensive than they were before the great financial crisis of 2008 and well below the late 1980s and early 1990s.
Even with the best buying solutions withdrawn, the deals on offer are infinitely greater than when previous building societies dominated.
Headlines about two-year fixes that spiked as the Bank of England raised interest rates have acted as a behavioral barrier.
First-time buyers withdrew at Barratt by 32 percent in the year through June. It is not clear that this is what the Bank of England intended.
He had hoped to squeeze the consumer, but the May GDP figure, which fell 0.1 percent, and buoyant June retail sales show limited impact.
Instead, Barratt is backtracking on his plans and shares across the sector are tumbling. Not a great result.
sterling bond
In the great battle against inflation, the Bank of England has a new weapon.
The British pound has rallied from a low of $1.03 against the dollar to $1.31 in recent trade as traders support Britain’s resilience and the prospect of higher interest rates.
A stronger exchange rate means cheaper imports, especially oil and gas, all in dollars. Forward and up.
