Jeremy Hunt has called on people who retired early during the pandemic to rejoin the workforce, saying Britain needs them. But an expert has said employers need to “step up to the plate” to help get people back into work.
Mr Hunt said at an event hosted by Bloomberg: “If companies can’t employ the staff they need, they can’t grow.”
He said one fifth of working age adults are economically inactive with around five million people who do not want to work.
The Chancellor said: “It’s time for a fundamental programme of reforms to support people with long-term conditions or mental illness to overcome the barriers and prejudices that prevent them from working. We will never harness the full potential of our country unless we unlock it for each and every one of our citizens.”
He continued: “So to those who retired early after the pandemic, or haven’t found the right role after furlough, I say Britain needs you. And we will look at the conditions necessary to make work worth your while.”
But Professor Irena Grugulis, Chair in Work and Skills at Leeds University Business School, said business also has a role to play.
She told Express.co.uk: “The big barrier is it is quite hard for the Government to persuade employers to do stuff.”
The Department for Work and Pensions is currently reviewing economic inactivity, a term used for people neither in work nor seeking or being available for work, with a white paper planned.
Professor Grugulis explained ministers tend to focus on supply side reforms to education and the benefits system because these can be controlled by the Government.
Conservative former minister Esther McVey has called on the Government to make sure welfare payments maintain strict conditions on benefits after these were relaxed during the COVID-19 pandemic.
Ms McVey told the Commons on Monday she feared conditionality has not returned to pre-Covid levels. She urged the Work and Pensions Secretary Mel Stride to assure her pre-Covid levels would return as a matter of urgency.
Mr Stride said conditionality plays a central role in the way the benefits system works and the Government’s drive to get people back into work, adding he will be looking at it as part of the review into economic inactivity.
Professor Grugulis said a high proportion of those missing from the labour market are too ill to work full time, in part due to the long term effects of Covid and also because of the NHS backlog. She added a significant number of those on benefits are actually in work.
She said: “A lot of people on benefits are already in work, which is quite shocking – that so many people can’t live on what they are paid by their employer.”
Issues with social care also prevent the over-50s joining or rejoining the workforce as many care for elderly parents. But those over the age of 50 would make ideal employees.
Professor Grugulis said: “They are a very successful group. They’ve got work experience. They’ve got skills. They are used to going into work. They’ve worked for decades. They are a very convenient group to target. But work needs to be attractive.”
She explained someone on a decent but not luxurious pension might be tempted to go back to work, particularly because prices are rising, adding: “But you certainly wouldn’t be tempted to go back to a very poorly paid, repetitive, dull job where you’re simply working long hours and burning out.
“Make jobs better paid and more people will be attracted to them.”
Asked how higher wages would affect inflation, Professor Grugulis said the way to raise pay in a reasonable way would be to boost productivity.
She added: “Although there have been massive productivity improvements over the last decades, most of the share of these have gone to shareholders and business owners rather than workers… At the moment, inflation is not being pushed by wages, it’s being pushed by excess profits.
“We’re not seeing a re-run of the 1970s where people said it is wages [pushing up inflation]. Those demanding increases in wages are very much responding to the fact that in real terms, what they can spend has plummeted.”
A Government spokesperson said: “We recognise one of our biggest challenges is how to support people to start or return to work, which is why the [Department for Work and Pensions] is thoroughly reviewing workforce participation to understand what action should be taken on increased economic inactivity, which extends beyond Universal Credit claimants.”
In the first half of 2022, the Government supported half a million claimants into work and is helping people in work by raising the Administrative Earnings Threshold so more claimants will receive intensive support.
The spokesperson added: “We’re also investing an extra £22million in employment support for people aged 50 and over – expanding our Jobcentre Mid-Life MOT service and providing personalised support through our Older Worker Champions – and are looking at plans to improve support for disabled people and people with health conditions.”