Labour should forget about rejoining the EU and focus on returning sick people back into work, the Government’s employment tsar has said.
Sir Charlie Mayfield, who led a review into the UK’s worklessness crisis last year, said tackling economic inactivity because of long-term sickness and disability was “probably one of the biggest opportunities we have to drive growth in this country”.
“You don’t have to join the EU, you don’t have to overcome [the issue] of building houses, you don’t have to introduce any rules on immigration, you don’t have to wait for a whole cohort of young people to leave school and join the workplace.”
The latest figures show that 2.8 million people in the UK are out of work as a result of ill health. Sir Charlie said: “If you can get, let’s imagine 1pc of [them] working, or even 10pc … that’s the size of a major city in terms of the workforce.”
Speaking on Tuesday at an event organised by the Work Foundation, a think tank, Sir Charlie said: “I would say for the Government now and in the future this is a massive growth opportunity.
“It is very rare that you get an opportunity that doesn’t cost you a lot of money, basically benefits employers, benefits employees, saves on welfare costs.”
His comments about the EU came on the 10-year anniversary of the Brexit referendum and as debate regarding Britain’s future relationship with the EU rages.
It came as British and European business groups representing 20 million firms urged the British prime minister and Ursula von der Leyen to set out an “ambitious” plan for deeper economic, defence and security ties.
The letter, co-authored by the Confederation of British Industry, called for greater cooperation on cars, energy and pharmaceuticals, arguing it was crucial for the global competitiveness of both the UK and the EU.
The letter also said: “Closer cooperation on energy security, including in the North Sea, is vital to reducing critical dependencies and enhancing our collective economic security and resilience.”
Sir Keir Starmer has pursued closer alignment with the bloc, while Andy Burnham has said he would like the UK to rejoin the EU in his lifetime. Mr Burnham, who is now the presumptive next prime minister, has more recently downplayed his desire to reverse Brexit.
The Mayfield review found that worklessness caused by ill health was now costing the UK £212bn per year. That figure is expected to rise unless the Government manages to stop the rapid increase in the number of people who are economically inactive because of sickness.
At a separate event organised by the Social Mobility Commission on Tuesday, Lord Blunkett called for “a complete transformation” of Britain’s welfare state.
Lord Blunkett, who was work and pensions secretary under Sir Tony Blair, said: “I don’t think it helps those with mental health problems to say, instead of, ‘We’re going to actually work with you to connect you to a voluntary placement or a training place or the beginnings of a job’… ‘We’re going to pay you to stay at home’.”
He said a failure to address the issue would lead to a forgotten generation, with official statistics showing there are now 1.01 million 16- to 24-year-olds not in education, employment or training – or Neets.
Lord Blunkett said: “It’s a crisis that’s been building for a decade. People have ignored it until the last few months, and at last we’re talking about a generation, a generation who need us to be alongside them.”
Britain’s growing worklessness crisis means welfare payments linked to ill health are forecast to climb from £75.7bn in 2024-25 to almost £100bn by the end of the decade, according to estimates by the Office for Budget Responsibility (OBR).
Britain’s fiscal watchdog warned that welfare overpayments caused by benefits cheats or administrative errors were on course to reach £11bn by 2030.
The OBR said payments resulting from fraud and error were projected to reach a record £10.8bn at the start of the next Parliament.
This is despite the anti-fraud budget being increased to almost £1bn, up from £150m a year in 2020.
The watchdog’s analysis estimated that less than £2 of every £10 in welfare paid through fraud and error will ever be recovered, with the total welfare bill now on course to rise above £400bn in the coming years.
The OBR added that lockdown could have prompted a “greater willingness to commit fraud among potential claimants”, with “some evidence that societal views towards fraud were softening, and that fraud and error across society was on the rise. The onset of the pandemic may have accelerated these trends”.
It said the suspension of face-to-face assessments had also helped fuel an increase in fraud and error.