Britain is running out of workers. The UK population may be growing, but the share of that population that is economically active is falling. More than 9.2 million working-age adults are out of the labour market today, and the number is growing.
This might be the biggest story in today’s Budget, and certainly one that deserves more attention from politicians and businesses alike.
The Office for Budget Responsibilty’s fiscal analysis accompanying the Budget contains some pretty bleak data and projections on economic inactivity and participation the workforce.
In headline terms, the OBR has abandoned its previous optimism that the spike in economic inactivity that followed the pandemic would be temporary. Based on data showing that inactivity rates remain stubbornly high, the forecasters now expect the participation rate to go on falling from its pre-pandemic peak of 64.3 per cent to 62.8 per cent by 2028.
Why? Why are fewer British residents making themselves available for work? The biggest single drag on participation visible in the OBR forecasts is poor health.
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in