It comes amid growing concerns over the worklessness crisis gripping the country, with 9.25 million adults of working age currently economically inactive.
Catherine Mann, a senior Bank of England official, warned in March that the shrinking labour force had become a “very significant issue” for the economy.
Other countries including the US have seen a rebound in people in the labour force after the pandemic. However, Ms Mann said there had been a “dramatic deterioration in the estimated potential supply for the United Kingdom”.
It threatens to pile pressure on businesses that have been struggling to recruit. Jane Gratton, policy director at the British Chamber of Commerce said last month: “We are concerned by the growing number of people not looking for work, with a large chunk of those out of action due to long-term health issues. Until we get more people permanently back into the workplace then the upside risks of higher inflation and interest rates will remain.”
It comes as the Government attempts to deal with the surge of long-term sickness by cracking down on GPs being able to sign people off work.
Rishi Sunak last month vowed to end Britain’s “sick note culture”. Benefits paid to people of working age currently cost the taxpayer £69bn a year.
Speaking to The Telegraph on Sunday, the Government’s new occupational health tsar Dame Carol Black said the GP sick note system was no longer “fit for purpose” given the pressures on the NHS.
She said the current process of being signed-off meant people were able to “lose contact” with the idea of going back to work.
A government spokesman said: “Our £2.5bn Back to Work Plan will help over a million people, including women with long-term health conditions, break down barriers to work.
“We are also reforming the benefits system so that it’s fairer on the taxpayer and makes sure those who can work, do work.
“This includes enhancing support for people with health conditions and disabilities through programmes like WorkWell and reforming the Fit Note process so people can return to and stay in employment.”
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