OPINION - Will Jeremy Hunt’s ‘back to work’ budget work?

 (Ben Turner)
(Ben Turner)

One of my favourite questions in headlines of recent years was posed by the Daily Mail, which in 2014 asked: “Is there no one left in Britain who can make a sandwich?” This followed the news that a company supplying Marks & Spencer and Tesco was “forced” to recruit 300 staff in “HUNGARY” (capitalisation theirs).

But a crunch in the supply of labour doesn’t only impact lower-skilled, lower-paid roles. Between the start of the Covid-19 pandemic and the end of 2022, economic inactivity rose by more than half a million, according to the House of Lords Economic Affairs Committee report with the somewhat more laid-back title, “Where have all the workers gone?

There are of course different varieties of economic inactivity, the level of which varies substantially depending on the region. For example, as of census day 2021, the local authority with the lowest percentage of employment was East Lindsey (45.8 per cent) while Wandsworth had the highest percentage (69.6 per cent), according to the Office for National Statistics.

There are lots of reasons why people do not work, from childcare responsibilities to health issues, both physical and mental. There have been some successes in this area, particularly in reducing worklessness among young people since the 1990s, but this has been driven almost entirely by young women, suggests this report by the Resolution Foundation.

Undeterred, Jeremy Hunt has advertised tomorrow’s set piece as a ‘Back to Work’ Budget. The chancellor will set out reforms to encourage hundreds of thousands of people back into the workforce, with his sights set on parents, those with disabilities and older people.

We already know that work capability assessments will be scrapped, helping people with disabilities to work without the fear of losing income support. Parents claiming Universal Credit will also receive more help to subsidise childcare costs. But it is action on older people and in particular pensions that has excited editors of a certain vintage today.

Many in their fifties and sixties left the workforce at the onset of the pandemic. Hunt wants to entice them back. To achieve this, the chancellor is set to raise the pension allowance for higher earners, frozen for nearly a decade, from £40,000 to £60,000. He will also increase the tax-free lifetime allowance.

One group this is likely aimed at is doctors. At present, many higher-paid and older consultants are leaving the NHS, citing pension restrictions which leave them with little financial incentive to stay on. Raising pension allowances is a direct, albeit expensive way to achieve this.

Getting more people back to work is the dream of all governments, and is particularly important following the end of free movement of people. These changes show the government is alive to the economic gains potentially on offer, but no single Budget is likely to address the far harder cases surrounding long-term sickness, made far worse by the pandemic itself.

In the comment pages, “Lead on the economy, but go after illegal immigrants... just in case“ - Matthew d’Anconna warns that Rishi Sunak is playing a cunning – and morally dubious – double game. While Anna van Praagh says her life is already a 24/7 Armageddon alarm – she doesn’t need a government one too.

And finally, while the methodology behind this poll may not necessarily meet randomised control trial standards, it would be churlish not to mention that London has been named the world’s most scenic city in springtime. All we need now is spring.

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