Has Universal Credit made People Sick?

The Conservatives have announced new policies to manage a recent increase in economic inactivity (Centre for Social Justice 2024).

“Since the pandemic, total spending on working age disability and ill-health benefits increased by almost two-thirds from £42.3 billion to £69 billion and we now spend more on these benefits than our core schools’ budget or on policing.” (Rishi Sunak 2024)

Official statistics suggest that there has been an increase of something like 850,000 (43%) of economically inactive claimants since the start of the pandemic in January 2000. Successive reports (Kirk-Wade and Harker 2023; Powell 2024) have highlighted the link to long-term sickness absence, and suggested that older-age and ill-health have interacted to cause this trend, with “long Covid” and “Waiting lists” cited as evidence.

“The number of working-age people who were economically inactive, which means they were out of work not looking for work, reached its highest level since 2012 in December 2023 to February 2024. The number of people who are inactive because of long-term sickness increased to a record high of 7% of the working-age population.” (Powell 2024)

 

Source: Office for National Statistics (ONS), INAC01 SA: Economic inactivity by reason (seasonally adjusted), 16 April 2024

The Government narrative is that after the pandemic arrived in the UK on January 30^th 2020, successive lockdowns in March - June 2020, September - November 2020, and January - July 2021 caused damage to the labour market by acceleratinging economic inactivity from which we have never recovered. 

However, official reports from 2022 suggest that while the lockdowns differentially impacted vulnerable people in unpaid and insecure employment at the time, the labour market recovered quickly: 

“Coronavirus: Impact on the labour market

Most affected groups

Some workers were disproportionally economically impacted by the pandemic.

Unemployment rates for minority ethnic groups were higher than average before the pandemic and saw a larger increase between January-March 2020 and January to March 2022. People from minority ethnic group were more likely to experience a loss of income at the beginning of the pandemic. While unemployment rates have risen more for minority ethnic groups over the pandemic, employment rates have also risen due to decreases in economic inactivity rates.

Employment among men has fallen slightly more than among women over the pandemic. An increase in economic inactivity for men means that women made up over 48% of the workforce in January-March 2022, a record high.

The youngest and oldest workers were most likely to lose their jobs or be furloughed at the beginning of the pandemic. Youth employment recovered quickly from spring 2021, and had nearly returned to pre-pandemic levels by January-March 2022. Many older workers opted to retire early.

Low paid workers were more likely to work in sectors most affected by the pandemic, particularly hospitality and non-essential retail, so were most likely to be put on furlough or experience falls in income at the beginning of the pandemic. However, the rise in vacancies in 2021 and 2022 was driven by low paying jobs and by February 2022 unemployment rates in low occupation had almost completely recovered.

The employment gap between disabled people and people without disabilities widened during the pandemic, before returning to close to pre-pandemic levels.” 

(Francis Devine et al 2022)

 

Thus, while the lockdowns may account for things like the small but significant (1%) rise in “discouraged workers” during this time (@86,000) it cannot account for the massive rise in long-term sickness absence, particularly as there is no increase in unexpected deaths that might accompany it.

In addition, the Government narrative does not explain the significant ‘churn’ within the economically inactive figures that begins six months before the pandemic. The Centre for Social Justice data shows that starting in April/May 2019 there was a 4.3% (@370,000) swing in the reasons being given for economic inactivity, from “looking after family/home” to “long-term sick”. Although the swing does not account for new claimants, it could account for the link to ill-health, but this has not been addressed in the official narratives. 

 

April/May 2019 was the start of a period of “managed migration” conducted by the DWP, to switch people from individual “legacy benefits” to the household-based Universal Credit system. Reports from DWP concede that the “managed migration” process differentially affected single people on tax credits, which seems to confirm that vulnerable workers were affected by these changes. However, because the change to Universal Credits has been overseen by the Centre of Social Justice, any damage it has done is likely to be suppressed by the current Government. 

Thus, contrary to the Government narrative, there is an alternative theory to the one that says the NHS is responsible for the recent increase in sickness-related economic inactivity: Rather, the evidence is that the group of people who were on "legacy benefits" have been made ill by transferring them onto Universal Credits starting in 2019. 

This group seems to have included very vulnerable people: single-parent families, unpaid carers, young adults, ethnic minorities and retired people, in insecure employment; who may have been cohabiting with relatives, extended family, or friendship groups as the most viable low-cost housing option. This group's employment had already been affected by lockdown and the imposed changes to their financial circumstances could have been enough to trigger a long-term sickness episode that has been recorded by GPs as something to do with their mental health.

“There were 2.9 million lone-parent families in 2022, accounting for 15% of all families. This is not significantly different to 2012, when there were 3.0 million lone-parent families, equivalent to 17% of all families. While the majority of lone-parent families are lone-mother families (2.5 million, 84%), in 2022, 16% (457,000) were lone-father families. Lone-mother families are more likely to include one or more dependent children (66%) than lone-father families (48%).” (ONS 2024)

“Our results indicated that: (1) British adults with intellectual impairments were more likely than their peers to be exposed to non-standard employment conditions and experience job insecurity; (2) in both groups exposure was typically associated with poorer health; (3) British adults with intellectual impairments in non-standard employment conditions were more likely than their peers to transition to economic inactivity; (4) among both groups, transitioning into employment was associated with positive health status and transitioning out of employment was associated with poorer health status.” (Emerson et al 2018)

There does not seem to have been any consideration within Parliament of the impact of the Government’s changes to the benefits system. The situation is of course complex, but local counsellors within more deprived areas will be well aware of the sorts of families who are being affected in this way. Unless this information is aggregated at the macro-economic level of data analysis, it is unlikely to become part of the official narrative, unless or until there is a change of Government.