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Health and wellbeing are in retreat, stalling the UK’s economy says former Bank of England economist




By Frances Marcellin November 14, 2022

Declining health impacts UK economic growth / Shutterstock/Agenturphotografin

The declining health of the British is holding back the country’s economic growth. That’s the key message from Andy Haldane, chief executive of the Royal Society of Arts (RSA) and former chief economist at the Bank of England, who spoke at the think tank’s annual Real Challenge conference. The Health Foundation.

“We are in a situation for the first time, probably since the industrial revolution, where health and well-being are on the decline,” Haldane said. A well-being accelerator for 200 years, health is now acting as a brake on the growth and well-being of our fellow citizens.

Haldane said that although the workforce had already shrunk before the pandemic, a further reduction in the UK workforce, as a result of COVID-19, is also a critical factor.

According to The Health Foundation, economic activity in the UK has shrunk by 700,000 people since before the pandemic. About 300,000 people aged 50-69 are most at risk of never returning to work and of 3.5 million working people aged 50-69 in the second quarter of 2022, 1.6 million said the poor health was their main reason for not working.

“It is therefore not surprising that we are seeing macroeconomic headwinds such as record vacancies,” Haldane said. “We don’t have enough people”

Haldane also pointed to the government’s lack of investment in health care. “When looking at spending on health systems, at least compared to the G7, the UK is at the bottom of the pack,” he said.

In 2019, the UK spent £177bn on healthcare (£2,647 per person), which was below the G7 average (£3,523). In comparison, France’s healthcare spending was £3,308 per capita and £4,131 per capita in Germany.

UK government spending on healthcare, including spending by the NHS, local authorities and other public bodies funding healthcare, increased to £213.4 billion in 2020, or 3 £181 per person.

The UK has seen its employment rate fall over the past two and a half years, while other major economies have seen employment rise. It is currently at 75.5%, after dropping 76.1% in 2019.

Outside of Latin America, only the UK, Iceland, Switzerland, Latvia and the US have seen employment fall since 2019, with most other EU countries rising on average 2% since the start of the pandemic.

Haldane did not comment on the impact of Brexit.

Liz Terry, editor of HCMsaid: “We have argued for some time that the health, fitness and physical activity sectors in the UK should have cross-cutting support from both the Department for Business, Energy and Industrial Strategy, as well as the Department for Culture, Media and Sport This statement from Andy Haldane – one of the world’s top economists – shows why this is so vital.

“Having a fit and healthy workforce is essential to economic success and if the UK government recognized this and really supported the physical activity sector, it would make a huge difference to the country’s economic output” said Terry.

“As we await the budget this week, we call on the government to recognize the bigger picture in terms of the vital role played by the health, fitness and activity sector in providing health and vitality to the nation and to give the sector the financial support it needs to thrive.”

A report from the Commission on the Future of Supported Employment has found that if current trends continue, then by the first quarter of 2023 the UK will be the only developed economy with an employment rate lower than before the pandemic.

About 600,000 people have left the labor market, including 200,000 who have been out of work for five years or more due to health problems.

Around 30,000 people with long-term COVID are unable to work and around 50,000 have taken early retirement since 2020, while the number of people who have never worked has increased by 250,000 to include students and people in poor health or with disabilities.

The situation is exacerbated by the retirement of the baby boom generation and the declining rate of migration, with 500,000 fewer non-UK-born workers than there would have been if the UK Uni had continued to follow pre-2016 trends.