Attempted cuts to PIP had left northern communities “feeling under attack,” a report says
People in the North of England are twice as likely to stop working due to ill health as those in the South, costing the economy billions in lost productivity, a major report claims.
It says that tackling regional inequality could deliver £18.4bn more to the economy a year – and health must be the central focus of the government’s push for economic growth – experts and academics have said.
They argue that repeated efforts to restrict benefits are “self-defeating” by undermining people’s health further, which costs the taxpayer more in the long run.
It comes ahead of the Budget next week, in which the Chancellor is expected to outline cuts and tax rises as she seeks to close a £20bn-£30bn hole in the nation’s finances.
The government has also set out wide-ranging reforms to benefits, with an overhaul designed to encourage those on benefits due to ill health to go back to work.
But Rachel Reeves has been urged to avoid “tokenistic” Budget measures and benefit cuts and instead focus on investing in health and employment support.
Crisis ‘far greater’ than MPs understand
The report by Health Equity North, a research institute of academics and health professionals, said the scale of the crisis of people out of work due to ill health is far greater in the North of England than is commonly understood in Westminster.
It claims that regional inequalities in health, wages and economic inactivity have deepened in the last seven years.
Speaking to The i Paper, institute director Hannah Davies said the scale of the crisis is “worse than acknowledged” and there is a lack of recognition in government “that health is an integral part of the productivity equation”.
“You can’t increase productivity without improving the health of the population,” she explained.
“That’s a fundamental fact that I don’t think is acknowledged enough. If you look at cutting welfare, for example, I don’t think that the Exchequer has paid enough attention to the fact that this supports people into better health and that improves productivity and the economy.
“If you stop getting people ill, you immediately are stopping a massive drop in productivity.”
She praised policies such as the expansion of breakfast clubs and said the government should also scrap the two-child benefit limit, something Reeves is considering ahead of the Budget.
Workers in the North of England are twice as likely to lose their job due to ill health – and nine times as likely if they do not have educational qualifications, the report says.
Attempted cuts to PIP made people “feel under attack”
Since 2018, all three northern regions – the North West, North East and Yorkshire – have experienced, on average, more than double the rise in people out of work due to ill health compared with London – rising by 22 per cent compared with 10 per cent respectively.
Amongst people with long-term health conditions, the gap in joblessness between the North and the rest of England has nearly quadrupled since the start of the Covid-19 pandemic – increasing from a 1.1 percentage point difference to 4.2 percentage points.
The report explains: “At the start of the pandemic (2020), 49.6 per cent of individuals with long-term conditions were likely to be economically inactive in the North vs. 48.5 per cent in the rest of England. By 2024, the gap between the North and rest of England has nearly quadrupled with, 51.2 percent vs 47 per cent.”
It adds: “Individuals living in the northern regions are two times more likely to lose their job following a spell of ill-health than those in the rest of England.”
Attempted cuts to personal independence payments (PIP) – which ministers were forced to shelve earlier this year – and restrictions to the winter fuel allowance payments had a “psychological impact on communities in the north of England,” she added, because people felt the support systems they rely on were “under attack”.
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The research, produced by a coalition of university academics based across the North of England, said specific measures to improve mental health support could be transformative. In the north-east of England, for example, improving population mental health alone could add £6.6bn to the economy, the research said.
The authors said growing inequality is “not inevitable, nor is it the fault of individuals – it’s the result of policy choices”.
In her speech to the Labour conference in September, Reeves outlined her plans to get young people back to work.
“I will never be satisfied while too many people’s potential is wasted, frozen out of employment, education, or training,” she said.
“There’s no defending it. It’s bad for business, bad for taxpayers, bad for our economy, and it scars people’s prospects throughout their lives.”
And in March, the Government announced a £1bn package to help sick and disabled people get into work. Then Work and Pensions Secretary Liz Kendall said: “Millions of people have been locked out of work, and we can do better for them. Disabled people and those with health conditions who can work deserve the same choices and chances as everyone else.”
The Government was contacted for comment.
