© FT montage/PA

Ever since Tsar Nicholas I’s rumoured coining of the phrase to describe the Ottoman Empire in 1853, the “sick man of Europe” has been a metaphor for decline. But for the UK in 2022, it is a precise diagnosis of an underlying problem that appears exclusively British.

By the time the Covid-19 pandemic had roiled on for a year of repeated viral waves, with their attendant cycles of social and economic restrictions, a significant exodus from the labour force was visible everywhere from the UK to the US, the EU and even Oceania. Millions dropped out of the workforce to recover from a bout with the virus, to care for a vulnerable relative or homebound child, or to take early retirement.

So it is not surprising that Britain’s labour force is smaller than it was in late 2019. But until now it has not been clear quite how exceptional the UK is in this regard, nor the cause of the malaise.

Chart showing that the UK is the only developed country in the world where the share of working-age people outside the labour force has kept rising after the initial pandemic shock

In country after country, almost as quickly as people left the labour market, they returned. In the EU, there were 5.8mn missing workers by summer 2020, but by late 2021 inactivity rates were back on the pre-pandemic trend. All but one of the 38 OECD member countries had either completed their labour force rebound or were well on the way there by the first quarter of 2022.

Not in the UK. As 37 countries saw an ascent and descent in inactivity rates, Britain’s line kept climbing. Uniquely among developed countries, the number of working-age Britons who are neither employed nor seeking work has risen in almost every quarter since the end of 2019, and was higher in the first quarter of 2022 than at any time since the pandemic hit.

Chronic illness is the main driver of this stalled labour recovery. Of the roughly half a million Britons aged 15-64 missing from the workforce, two in three cite long-term illness as their reason for not holding or seeking a job. It would be easy to point the finger of blame at Britain’s handling of the virus, but the data suggest otherwise.

Chart showing that whereas other countries saw only a short-term exodus from the labour market, inactivity levels have remained high in the UK due to mounting chronic illness

First, almost all countries have been hit by the same waves of the virus over the past two years, with very similar outcomes in terms of hospitalisation. If the same levels of viral transmission are not causing chronic worklessness elsewhere, it cannot explain the UK phenomenon.

Second, in Spain, a country whose pandemic trajectory has closely tracked Britain’s, not only have all missing workers returned to the labour force, but levels of economic inactivity due to long-term sickness did not budge at all during the pandemic. The same is true of other European countries.

Third, Britain’s rise in chronic illness predates the onset of the pandemic.

With direct impacts of Covid ruled out, the most plausible remaining explanation is grim: we may be witnessing the collapse of the NHS, as hundreds of thousands of patients, unable to access timely care, see their condition worsen to the point of being unable to work. The 332,000 people who have been waiting more than a year for hospital treatment in Britain is a close numerical match for the 309,000 now missing from the labour force due to long-term sickness.

Difficulties in accessing primary care will almost certainly be contributing too, since this is the gateway to diagnosis and treatment. Forty seven per cent of Britons now find it difficult to get through to someone at their general practitioner’s practice, up from 19 per cent in 2012, and 27 per cent said they avoided making an appointment this year because they found the process too difficult (up from 11 per cent).

Covid is undoubtedly a factor in the NHS’s ongoing crisis, through staff absences, additional pressure on hospitals and limiting the capacity to work through backlogs. But where other countries’ healthcare systems are proving resilient, the UK’s is on its knees.

The virus may be the proximate cause of economic inactivity, but it’s not the ultimate one, and the latter must be addressed to heal Britain’s workforce.

john.burn-murdoch@ft.com, @jburnmurdoch

Letter in response to this article:

NHS will struggle as long as chronic disease persists / From Christine Hancock, Founder and Director, C3 Collaborating for Health, London NW1, UK

Copyright The Financial Times Limited 2023. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article