UK Faces Long-Term Challenge in Addressing Worklessness Crisis

Lord Rose, chairman of Asda and former chairman of Marks & Spencer and Ocado, has issued a stark warning about Britain's worklessness crisis, suggesting it could take decades to resolve. The Conservative peer emphasized the need for benefits system reform and increased productivity to address the growing number of economically inactive individuals in the UK.

According to the Office for National Statistics (ONS), 2.8 million working-age people cite long-term sickness as the reason for their inability to work or seek employment. This figure has increased from 2.2 million before the pandemic. The total number of economically inactive individuals aged 16-64 has risen from 8.4 million pre-Covid to 9.3 million currently.

"We can't just become a state now where people just live on handouts. We must increase productivity. We must tackle these 2.8m people who are economically inactive. We must make sure that we've got the benefit system in balance."

The UK's welfare system, known as Universal Credit, was introduced in 2013 to streamline benefits and encourage work. However, the current situation suggests that further reforms may be necessary to address the worklessness crisis effectively.

Youth unemployment has also seen a concerning rise, reaching 13.3% in the three months leading to July 2024. This marks the highest level since early 2021 during the lockdown period. Over 500,000 young adults are currently out of work, raising alarms about the potential long-term consequences.

Mental health issues are playing a significant role in this crisis. The NHS Confederation and Boston Consulting Group report that many students are transitioning directly from university to long-term sickness due to mental health problems. This trend is particularly worrying, as mental health issues cost the UK economy an estimated £118 billion annually.

To combat these challenges, Lord Rose suggests a comprehensive approach:

• Reforming the benefits system to encourage work
• Improving education to equip people with future-relevant skills
• Changing perceptions of the workplace as a positive environment for learning and self-esteem

The UK government has responded to these concerns, stating their commitment to creating more jobs, making work pay, and transforming skills. They also plan to reform job centers and empower local areas to tackle economic inactivity.

Addressing this crisis is crucial for the UK's economic future. The country's productivity growth has been slower than other G7 countries since the 2008 financial crisis, and the current situation could exacerbate this trend. Additionally, the UK faces skills shortages in various sectors, including healthcare and technology, which could be partially alleviated by reducing worklessness.

As the UK navigates this complex issue, it's clear that a multi-faceted, long-term approach will be necessary to reverse the trend of increasing economic inactivity and ensure a prosperous future for all citizens.