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THE DAILY BRIEFING - from the Reaction Life team by Mattie Brignal, News Editor – 15.11.22

A record-breaking 2.5m people are unable to work due to long-term illness, the highest tally since records began in 1993, new ONS data shows, writes Mattie Brignal.

The latest figures add to concerns about the state of Britain’s job market. Although unemployment is at 3.6 per cent - its lowest level for half a century – Britain’s workforce is shrinking as people stop looking for work. The jobs are certainly there for the taking. Firms are desperate for workers, with vacancies close to a record high at 1.23m. Yet employment fell by 52,000 – twice the expected amount - in the three months to September. It’s no coincidence that the NHS is also breaking records. Its waiting list topped 7m at the end of August amid widespread warnings from health leaders that the system really is at breaking point this time. Commenting on the new data, the ONS made a direct link between the two: “During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high." Andy Haldane, chief executive of the Royal Academy of Arts and a former chief economist at the Bank of England, warned last week that Britain is paying a high economic price for years of underinvestment in healthcare, compared to the rest of the G7: “Having been an accelerator of wellbeing for the last 200 years, health is now serving as a brake in the rise of growth and wellbeing of our citizens." The Confederation of British Industry (CBI) has put a number on it, calculating that ill-health keeping people out of work is costing the economy £180bn a year. Sickness isn’t the only thing keeping would-be workers at home.

100,000 civil servants set to join train drivers and nurses in voting for industrial action. While the number of days lost to strikes this year is dwarfed by the peak years from 1968 to 1990, the uptick reflects a creaking, inefficient labour market.

A resurgence of industrial action comes at a terrible time for Jeremy Hunt, whose grim task is to reign in spending enough to appease the markets, but not so much as to tank the economy. Bargaining power may have tilted in workers’ favour, but public sector pay is growing at 2.2 per cent a year compared to 6.6 per cent in the private sector.

Closing the gap will be very low on Hunt’s priority list. But Britain's diminishing workforce cannot be ignored. For Hunt, Britain’s longest-serving health secretary, the link between ill-health and economic damage will make for uncomfortable reading.

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