Sir Keir Starmer must confront the crisis of idle Britain
The UK is the only developed country where people are still dropping out of the workforce after the pandemic. The PM’s hopes for growth and social improvement depend on a solution
Two Covid-era lockdowns have left their traces in human and economic terms in ways we are only now starting to fully comprehend.
One is worklessness and a dependence on welfare, which looks like leaving a damaging long tail — a legacy which Keir Starmer urgently needs to address, if he is to make good on his claim to restore the nation to social as well as economic health, let alone produce the growth he has pledged to deliver.
But you can search the new government’s speeches in vain for honest engagement with this looming shadow over the country’s prosperity.
The facts I have discovered chairing the Social Justice Commission are even more disturbing than I realised. Month by month the figure for the economically inactive population of the UK creeps up towards the ten million mark. That’s almost one million more than before the pandemic. Nearly three million of those left idle are registered as long-term sick. Those statistics are the legacy of lockdown. Britain is the only country in the West where more people have continued to drop out of the workforce since the pandemic.
Across the political spectrum, figures as diverse as Andy Burnham, Labour mayor of Greater Manchester, the former Bank of England governor Mervyn King, the ex-Liberal Democrat leader Tim Farron, Conservative Miriam Cates, the Labour minister Stephen Timms, business executives and charity directors have come together to form a cross-party commission to examine the consequences of lockdown.
The Social Justice Commission’s first report, Two Nations: The State of Poverty in the UK, revealed that disparities in wealth and education had widened. We all agreed that the creation of an underclass detached from mainstream society, as in Victorian times, is a real danger.
In our follow-up, United Nation, we have formulated proposals to create safe streets, support fragile families and help young people who lost out when their schools were closed. Above all, this report wants to show how to make work pay — and that is a topic which should be high on the agenda of Liz Kendall, as work and pensions secretary, and Starmer himself.
The so-called “great resignation” of the over-50s who decided that going back to work just wasn’t worth it after the pandemic is well known. Less publicised is the plight of the young, the chief victims of lockdown. Between 2019 and 2022 the numbers of those off work due to long-term sickness aged 16-24 years and 25-35 years increased by 29 per cent and 42 per cent respectively.
In lockdown so many mental health problems were left untreated that there is a backlog of misery for those suffering. A quarter of patients referred to the NHS still have to queue for three months or more for treatment. In the interim, another 500,000 people have been designated as long-term sick.
Once adults lose the habit of work it is very hard to come off benefits. Unless addressed, the Centre for Social Justice estimates that the cost to the taxpayer will be £12 billion of additional spending over the next five years.
About two thirds of those not seeking work between the ages of 25 and 34 are young men. Last month’s riots took place in seven out of the ten most deprived urban areas in the UK, where worklessness is high. Racist agitators feed on such misery.
It is easy to blame the victim and overstretched GPs — diagnoses of mental ill health and disability are grey areas and perhaps some conditions are too readily medicalised — but the good news is that 700,000 people on benefits say they want to go back to work given the right encouragement.
Labour has to tackle the evil of worklessness as a core mission. Too often, however, our monoglot politicians troop off to the United States for solutions. Of course American enterprise has much to teach us, but often north European health and welfare systems are smarter than their Anglo-Saxon equivalents.
So my advice to Liz Kendall, the ambitious work and pensions secretary, who has been entrusted by Starmer and chancellor Rachel Reeves with an overhaul of the system, is to look for a model closer to hand. The devolved system of employment support in the Netherlands offers one humane but efficient way forward. The Dutch have been three times as successful as the British in getting people back into the workforce since the pandemic.
As Going Dutch, a new report for the Centre for Social Justice observes, local governments and communities in the Netherlands commission “the right support for the right people from the right organisations” at the lowest possible level. Since 2011 the Dutch have split welfare administration and employment support, devolving the latter along with adult education and associated services. Similar schemes work in Denmark.
Local bodies can provide the carrot, but central government still plays a role in the administration by making benefits conditional.
This plays directly to our new government’s agenda. In the King’s Speech, Labour committed to devolving large areas of housing, transport and energy policy to metro mayors and local governments — and employment support.
In that light the Social Justice Commission’s final report recommends switching £6 billion from distant Westminster to town halls across the country. This is not a plea for more money. As Andy Burnham, who has piloted a similar programme, argues: “Local solutions are far better and much cheaper than those invented in Whitehall.”
A bipartisan reform for a country yearning for consensus is surely too good to ignore.
