Surge in long-term sickness is stumping living standards and growth: Beckie Hart

According to CBI research, two-thirds of businesses admit struggling with labour shortages over the past year. Add in an ageing population, as well as acute skills shortages, it’s clear the labour market in Yorkshire & the Humber is hamstrung.Those whose health prevents them from earning a living are disproportionately affected by the cost-of-living crisis compared to those who can work. As the government halts covid support payments, they will feel the pinch further. And some more acutely depending on where they live given that regional inequality in healthcare provision persists.

Getting to grips with labour outflow due to ill-health is key to raising living standards and unlocking poor productivity in an economy already weighed down by high inflation and high interest rates. The CBI’s suggested reforms ahead of the Spring Budget would provide more support for employees with

health issues to help them stay in work by prioritising prevention. Starting with making all Employee Assistance Programs a fully taxable benefit.

Other easy wins would be to enable tax-free reimbursements of eye tests and vaccinations, and by removing the one per employee per tax year tax-free limit for health screening and medical check-ups.

Beyond this, tax relief for medical treatment recommended by a health professional should be made more preventative by removing the ‘28-day unfit for work’ condition and scrapping the £500 cap. To ensure people are supported back into work we urge the government to deliver its Autumn Statement commitment to an SME occupational health subsidy.

Businesses in our region simply cannot afford to take the health of their workforce for granted. They not only have to find, attract and retain talent but also seek preventative measures that address the long-term strains on people from increasing caring responsibilities to those living with physical and mental disabilities.

This means the government must carry through the planned expansion of eligibility to 30 hours funded childcare to allow parents to increase the hours they work and also to improve the Access to Work Scheme by allowing employers to play a more proactive role. This would incentivise firms to actively invest in more inclusive work environments.

Beyond the immediate challenges, a long-term strategy should look to future proof the workforce for generations to come. Adopting technology wherever possible, to help people achieve more in every hour they work, has the best chance of ameliorating shortages and boosting living standards. We will, however, need to ease pressures in the short-term with a more pragmatic approach to immigration to get there. As we fast approach a General Election, political leaders setting out with growth agendas and to solve the productivity puzzle must prioritise the wellbeing of employees and recognise that the foundation of a wealthier country is built on the health of its people.

Beckie Hart is regional director, Yorkshire & Humber at CBI