Lord Flight is Chairman of Flight & Partners Recovery Fund, and is a former Shadow Chief Secretary to the Treasury.
Many of our great cities – Birmingham, Glasgow and Liverpool to name but a few – now have 20 per cent of their workforce age population on out-of-work benefits. In Blackpool the figure is 25 per cent, and in Middlesborough 23 per cent.
The total across the UK is 5.3 million people, a staggeringly scandalous figure which has been going virtually unreported.
The Conservatives have been boasting, unwisely, about unemployment being near a fifty-year low – true taking the narrow definition, but a nonsense in reality; people may not see that unemployment is over five million (on out-of-work benefits) because Universal Credit has made it all harder to understand.
A significant proportion of the five million out-of-work is genuinely unable to work – either long-term sick or members of the growing NHS wating list. But Rishi Sunak should be positive about getting at least a million back to work.
He has little other option here. We are probably already in mild recession, which is only worsened by the tax rises in the Autumn Statement. Moving people off benefits and into work will be one of the few tools still available to the Government.
Behind this lies the harsh fact that the benefits backlog needs to be reduced. A country cannot prosper while overlooking 13 per cent of its population. This is a territory which the Brexit vote was supposed to address, forcing politicians and businesses to confront the position.
We have people willing to work, but they need training and encouragement from business and government.
At the same time, it is still necessary to import a proportion of workers from overseas. We have people queuing up to come to Britain to pick crops, otherwise rotting in the fields; to work in warehouses, otherwise inoperable. Half of new nurses registered last year were from overseas.
It should not be that difficult for us to train enough domestic nurses to staff our NHS. Too many employers have become addicted to importing rather than training, or saving money on machines by using cheap humans.
British employers need to hire and train the long term unemployed and not just use (expensive) overseas agencies.
This is not a new problem. During the 20 years before Brexit, some two thirds of the growth in employment was accounted for by foreign-born workers. Horrifyingly, today there are 320,000 fewer recorded workers than before the pandemic. Yet Brexit has not so far slowed the migrant influx: visas are being issued at the rate of 8,500 a week.
The crucial negative is the proportion of the working age population in our main cities on out-of-work benefit: between 15 and 20 per cent. There is urgent need to move these individuals from welfare to work. Higher wages should serve as one incentive, but government help is needed with skill training. Out-of-work benefits are more generous than makes economic sense.
In the near-term, the Government cannot avoid allowing more foreign workers into the UK to ease chronic so-called labour shortages. Currently our immigration policy is holding back economic growth.
However, Lord Wolfson has suggested a tax payable to hire foreign staff to encourage employers to recruit from the UK first.
In summary, we need appropriate tax incentives to encourage more of the six million citizens not working to get employed; we also need to learn what foreign workers have skills we need and to facilitate work permits for them.
For migrants, Britain is a most attractive destination, not least because healthcare is free. But we must ensure that being in work significantly more financially attractive than living on Universal Credit. We may need imported labour, for the time being, but they need us to provide the jobs.