How spiralling worklessness among British-born adults is fuelling a migration crisis
As Sir Keir Starmer seeks to deliver economic growth, the worklessness crisis he inherited from Rishi Sunak is getting markedly worse.
Around 9.5m people of working age are neither in work nor looking for work – they are economically inactive, in the parlance of the Office for National Statistics.
That is terrible news for the Prime Minister, who will struggle to drive up GDP if so many of the nation’s adults are not even interested in working.
The figures also show the causes of another crisis: migration levels.
Bosses are desperate to hire more staff – but as British-born adults drop out and stop seeking employment, companies and the public sector are forced to offer jobs to those born elsewhere instead.
More than a million foreign workers have come to Britain since the eve of the Covid crisis, fueling concerns about migration, adding to stress on public services and leaving the UK at risk of a labour market crisis if it suddenly becomes a less attractive place for emigrants.
Since the pandemic struck, the number of economically inactive people has jumped by more than 1m.
Splitting that figure up by place of birth, UK-born people account for 833,000 of the increase, with 230,000 people born in other countries. That is to say, the overwhelming rise in worklessness has been driven by those born in the UK.
The biggest driver of the increase in inactivity since 2019 is long-term sickness: people who say they are too ill to work. The number of students has also risen sharply. Most of the increase in inactivity among those born in other countries can be accounted for by the rise in students. But that only applies to one-third of the increase in worklessness among those born in the UK.
At the same time the number of British-born people in work has fallen by 967,000 since late 2019, while there has been an increase of just over 1m in those in employment in the UK who were born elsewhere.
It means that UK-born people account for just under 80pc of all employment in Britain, down from 82pc on the eve of the pandemic and 92pc at the turn of the century.
This plunge in UK-born employment has come despite bosses being desperate to hire.
At the peak of the frenzy to hire in 2022, there were 1.3m job vacancies available.
That has dropped to 884,000 now, but is still above pre-pandemic levels of around 810,000.
It means the economy is still being held back by worklessness as employers find themselve unable to tempt people into the jobs that desperately need to be done.
Petra Tagg, director of the recruiter ManpowerGroup UK, says “employers are struggling to fulfil their ambitions to grow”.
“A lack of workforce participation from those who are of working age is still constricting economic growth,” she says.
Alexandra Hall-Chen, of the Institute of Directors, says “the availability of skills and labour remains a pressing issue for employers, and economic inactivity remains significantly higher than prior to the pandemic”.
This is a big enough issue to affect the whole economy.
“Without effective action to bring more people back into the workforce, sustained economic growth will be all but impossible,” she says.
Rachel Reeves, the Chancellor, has promised action, sounding tough on benefits claimants.
“Today’s figures show there is more to do in supporting people into employment because if you can work, you should work,” she says.
“This will be part of my Budget later in the year where I will be making difficult decisions on spending, welfare and tax to fix the foundations of our economy so we can rebuild Britain and make every part of our country better off”.
Although the net fall in employment and rise in inactivity among UK-born workers appears to almost match, it is not simply a matter of the best part of a million people moving from one status to the other and staying there.
Every year some retire, some move abroad, new workers enter the jobs market from school and university, Britons working or travelling abroad return home, so there is plenty of churn in the numbers.
Similarly the rise in the number of migrants in work in the UK closely matches the drop in British-born employment. That does not mean those migrants are doing precisely the same jobs that previously-employed Britons held – individuals move, change jobs and climb the career ladder, while bosses’s needs and requirements change, so some jobs are created and others disappear over time.
But in terms of an overall economic pattern, the picture is clear. Fewer British-born people are working. And foreign-born labour is filling the gap.
Neil Carberry, chief executive of the Recruitment and Employment Confederation, says it employers have little option but to look overseas.
“Someone who is willing to change country to work is highly motivated to work – they are coming in and engaging in the job search,” he says.
