Economic growth is often described in the dry language of statistics: GDP figures, productivity rates and trade balances. But these numbers collectively represent not just the wealth of a nation; they profoundly affect how life feels for all but the most affluent, filtering through into wage growth and thus living standards, affecting tax revenues and so the character of public services and the generosity of the welfare safety net. So the UK’s laggard economic performance in the 15 years since the financial crisis, underpinned by poor productivity growth, matters very much. Together with the economic shocks of Brexit, the pandemic and rising global energy prices, it means real wages are not forecast to return to the levels they were at before the 2008 crisis until 2027: two lost decades for living standards.
Economists have dubbed the UK’s anaemic growth its “productivity puzzle”. There are multiple factors that are probably suppressing growth in the UK more than elsewhere, including low levels of business investment, the self-imposed economic harm of Brexit and a lack of investment in key infrastructure such as transport and broadband. But in turning a spotlight on the nation’s health, the pandemic has forced us to confront the fact that we are an increasingly unwell country, and that is having a significant impact on economic growth.
The number of working-age people who cannot work because of long-term sickness is at a record level of 2.6 million, a number that significantly increased after the start of the pandemic. In addition, more workers than ever have health conditions that limit their ability to do their job: 3.7 million in total. Almost one in five people aged between 16 and 64 now report having a work-limiting health issue. While rates are highest for older workers – 28% of those aged 55-64, compared with 15% of those aged 16-34 – poor health has risen most quickly in the youngest groups; someone aged 16-34 is twice as likely to have such a problem as they were a decade ago.
Britain cannot fix its growth problem without reducing the number of people who have left the labour market altogether because of ill health. This is also key to tackling not just health inequalities – the gap in life expectancy for the most and least affluent has increased in recent years – but also to reducing the UK’s gaping economic inequalities between the regions; the more deprived an area, the higher rate of working-age ill health it is likely to have. The growing numbers of younger people with long-term health conditions, including mental health concerns, who have many years of their working lives left, suggests that if this issue goes unaddressed, the problem will get worse.
Improving working-age ill health must be an urgent priority. This is partly about addressing the parlous state of the NHS: the UK does not spend nearly enough on healthcare per head compared with other affluent, ageing societies. Waiting lists for treatment are at record highs, with knock-on impact for people’s ability to work, and the longer people are out of work because of poor health, the more difficult it is for them to re-enter the labour market. Demand for the NHS cannot be reduced without spending more on social care for older people; a lack of care in the community means patients who do not need to be on hospital wards are spending too long there because of a lack of other options. Mental health services are in a particularly bad state; young people with such needs are having to wait months, sometimes even years to access clinical care after a GP referral. More funding for talking therapies is welcome, but only a modest start.
Yet fixing the NHS is nowhere near enough. Employers need to be encouraged to provide more support for employees who are struggling with their health to help them stay in work. And the UK’s higher than average preventable mortality rate – deaths that could be avoided through treatment – is not just a matter of improving levels of acute care. Covid affected the UK more as a result of a poorer public health baseline, including internationally high levels of obesity and related conditions such as diabetes, blood pressure and cardiac conditions. Reducing the incidence of long-term health conditions among the working-age population also requires a sustained focus on improving the nation’s health through diet and exercise.
The prize for any government that achieves this is immense: a happier, healthier workforce, and a wealthier country with better public infrastructure and a more generous safety net. There is a self-reinforcing positive dynamic at play here: spend more on the services that improve health and wellbeing and there are rewards to be reaped. Yet both the Conservatives and Labour have committed themselves to ferociously tough spending plans for the next parliament. Labour has said that, if it wins the next election, its route to spending more will be through higher growth. But what if higher growth cannot be achieved without lifting workers out of poverty and improving their access to healthcare first? That is the unenviable conundrum the next government will face.
