Liverpool shows Labour how long-term illness destroys lives and the economy
Wes Streeting was right on target when he announced his intention to prioritise cutting NHS waiting lists in areas with the highest rates of sick leave. Liverpool, where the Health Secretary spoke at Labour’s annual party conference on Wednesday, is at the top of the list.
More than a decade of austerity, an ageing population and the impact of the Covid pandemic have left Britain with deep health problems. Economic inactivity – the number of working-age adults who neither have a job nor are looking for one – has risen sharply, reaching more than 9 million, with around a third of those cases due to record levels of short-term and long-term illness.
In Merseyside, the challenges are particularly acute. Four of the top 10 parliamentary seats in England and Wales with the highest health and disability-related inactivity rates in the 2021 census were in the region, the Health Fund thinktank. The Walton constituency in Liverpool city centre – within walking distance of Labour’s annual conference and one of the party’s safest seats – came in first, with around one in 10 of the local population aged 16 and over inactive.
Tackling this problem was a top priority for the previous government, but significantly more emphasis was placed on strengthening the benefits system, alongside tax cuts and childcare reforms to encourage work.
However, Labour is more willing to accept that a crumbling health service and a wider decline in the public sector are among the most important issues that need to be addressed – both for reasons of social justice and to restart economic growth.
Figures published this month show that there were 7.62 million people on the NHS waiting list nationwide in July, with more than 40% waiting for more than 18 weeks. In Merseyside, that figure is almost 300,000.
While it’s not easy to prove a direct link, it’s not a big leap to draw the line between these sky-high waiting lists and record health-related inactivity. Some experts, including Andy Haldane, the former chief economist of the Bank of England, have done just that.
Streeting’s plan to tackle hospital waiting lists in areas with the highest rates is a clear recognition of this. Yet experts warn the problem will require more than a flying squad of senior doctors to solve.
As Rachel Reeves’ first budget approaches late next month, it is clear the government is aware of the challenge. Speaking at a fringe event at Labour’s conference on Tuesday, the Chancellor of the Exchequer said rebuilding the NHS would be a top priority in her tax and spending decisions.
“One of the things we’re looking at is reducing economic inactivity,” she told the event, which was organised by the think tank IPPR. “There’s something terribly wrong, both in our welfare state, which doesn’t encourage work enough, and in our health system – both mental health and physical health – which is leaving too many people excluded from the workplace.”
The economic cost of tackling inactivity would be significant. The IPPR estimates that losing 900,000 people from the UK workforce since the pandemic this year will cost HMRC £5 billion in lost revenue, while improved health would save the government £18 billion a year by the mid-2030s.
Streeting’s announcement in Liverpool is the first step in a plan that will encompass the whole of government. It is perhaps the clearest example of Keir Starmer’s ‘mission-driven’ approach to getting all parts of the Whitehall machine to pull in the same direction on certain issues.
The prime minister told the BBC on Wednesday that people on long-term sick leave who are claiming benefits should return to the workplace “where they can”, adding that he wanted more schemes to support people in finding jobs.
Work and Pensions Secretary Liz Kendall is consulting with labour market experts, businesses and unions to draw up plans to support his aim, which will be published this autumn. The process is expected to focus on health, education and employment support, and will include a new Youth Guarantee for 18-21 year olds and an overhaul of jobcentres by merging them with a national careers service.
Not everyone who is inactive in the health service will be able to work, which ministers say they accept. But there are also concerns that the benefits bill is rising unsustainably. On current trajectories, the Office for Budget Responsibility predicts that the bill for sickness and disability benefits will rise by £30 billion over the next five years.
However, as well as helping those who cannot work, the benefits system will remain crucial to helping those who want to find a job. Reforming job centres to provide more active assistance – rather than just policing the benefits system – will be crucial, as will getting employers to offer more flexible working arrangements and training opportunities.
There are clear reasons why it is a priority. Without strong health fundamentals, the UK economy could be in trouble.