Biggest jump in people out of work long-term since 1980s, study shows

The number of people off work long term has seen its highest jump in more than 40 years in the course of this Parliament, according to new research.

Almost 9.3m people aged 16-64 were economically inactive in the last three months of 2023. This marks an increase of 670,000 – about 8 per cent – compared to the start of the current Parliament in 2019.

Economic inactivity is defined as people not in employment who have not been seeking work in the past month, or are unable to start work within the next fortnight.

It is distinct from unemployment, which measures the number of people who are not in work but are looking for work and are available to start in the next fortnight.

Economically active people are those in employment, and those who are unemployed.

The UK unemployment rate decreased to 3.8 per cent in the latest quarter, marking the lowest point since late 2022. The employment rate is currently 75 per cent.

Analysis by the House of Commons Library, commissioned by Labour, said the latest figures on economic inactivity mark the biggest leap in the number of people off work long-term since 1983.

Around 9.1m people of working age were economically inactive following the 1983 election, which saw Margaret Thatcher re-elected in a landslide victory for the Conservatives.

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That marked a jump of 794,000 compared to the start of the previous parliament in 1979 – a rise of around 10 per cent. That was sparked by soaring unemployment during Mrs Thatcher’s first term as prime minister, as the economy sank into a recession.

The latest figure of 670,000 people moving into economic inactivity is almost double the second-highest jump – 378,000 – seen between the 2005 and 2010 general elections. This was around the time of the world financial crisis.

The most recent rise has been in part fuelled by record sickness-related economic inactivity, with 2.8m people currently out of work due to long-term illness.

Around 235,000 people aged 16-24 are off work for the long term because of ongoing sickness, compared to around 116,000 in 2010.

It comes as the Office for Budget Responsibility (OBR) said earlier this month that while economic inactivity among G7 countries rose “everywhere bar Germany” at the outbreak of the pandemic, it then fell “everywhere but the UK in 2021 and 2022”.

The OBR said it meant Britain’s post-pandemic rise in inactivity “stands out” compared to other developed countries. It added that ill health playing a bigger role in the number of people out of work in the UK “than in most other advanced economies”.

The Office for National Statistics (ONS) warned last month that a sharp rise in people neither in work nor looking for a job was holding back economic growth in Britain, as the UK fell into recession at the end of the year.

A separate report published by the Resolution Foundation this week found that poor mental health has been a significant factor in rising numbers of young people off work long-term due to illness.

Around a third of people aged 18 to 24 reported symptoms of a mental disorder such as depression, anxiety or bipolar disorder in the UK in 2021/22, according to the report.

A Government spokesperson said its £2.5bn Back To Work plan aimed to help one million people find jobs, including those with long-term health conditions and disabilities.

“This sets out tailored support to get more young people into work, with work coaches and youth hubs offering advice and guidance helping young people find a role right for them,” the spokesperson said.

They added that ministers offered “record levels of support for mental health” totalling £16bn last year, including £1bn earmarked specifically for children and young people.

A Conservative spokesperson added: “There are over four million more people in work than in 2010, inactivity is lower than the G7, OECD and EU averages, and our £2.5bn Back to Work Plan will help over a million people to find, stay and succeed in work.”

i revealed in November that ministers are also drawing up plans to launch a “111-style” phone hotline offering support to the more than 2.8m people classed as long-term sick, to nudge them back into work.

Liz Kendall, the shadow Work and Pensions Secretary, said: “A record number of people are locked out of work due to long term sickness, and the number of young people economically inactive is spiralling – at huge cost to them, to business, and to the taxpayer too.

“Labour’s plan will tackle the root causes of worklessness by driving down NHS waiting lists, reforming social security, making work pay, and supporting people into good jobs across every part of the country.”

Labour has pledged to use AI to speed up benefit claims and match unemployed people to job vacancies.

Shadow Pensions Secretary Jonathan Ashworth has said the party would ensure job centres help broker flexible work options, including for older workers with chronic conditions and caring responsibilities.