Economic inactivity: welfare and long-term sickness

The House of Lords Economic Affairs Committee is launching an inquiry into the relationship between the welfare system and long-term sickness in Great Britain, as a follow up to its 2022 inquiry into economic inactivity. Rates of economic inactivity – measured as a proportion of people of working age – fell steadily from 2012, reaching an all-time low of 20.7 per cent in early 2020. However, the COVID-19 pandemic saw a sudden and dramatic reversal of this trend with rates of long-term sickness becoming an increasingly important factor as the pandemic wore on. The Committee is seeking to understand the impact, if any, that changes in the benefits system have had on trends in long-term sickness and inactivity. The Committee will hear views on what is being done in this area, and what should be done, to mitigate elevated levels of long-term sickness-related inactivity and the associated rising costs of welfare.