The hidden costs of furlough

It wasn’t long ago that a Conservative government was congratulating itself for achieving the lowest unemployment figures in half a century. This won’t wash any more, since the wider picture has become clear: while official unemployment figures remain low, figures for ‘economic inactivity’ have seen a sharp rise. We have 9.4 million of working age who are economically inactive – a number that has increased by one million since before the pandemic. It is just that only a small proportion of them show up in the unemployment figures. Many of the remainder – 2.8 million – are on long-term sickness benefits, a number that has risen by 700,000 since the eve of the pandemic. As has been argued many times, including by the Bank of England, so long as we have so many people not working it is hard to see the economy returning to robust growth.