The Tories are still in denial about the scale of Britain’s benefits crisis

During the lockdowns, I came to know an official involved in the “look him in the eyes” poster campaign. He was uncomfortable about his remit and the lack of research being done about whether all this fearmongering worked, or was even necessary. Worse, he said, there was no discussion about the side effects: the longer-term impact of subjecting a country to such barraging. What about social repair? Did they expect everyone to bounce happily back to work afterwards?

This has turned out to be one of the biggest surprises of post-Covid Britain: we ended up with a huge, debilitating hole in our workforce. There’s the well-publicised issue of the over-50s who lost the habit of working and didn’t fancy getting back into it. But then, also, the more complex question of mental health. There are now 2.5 million off on long-term sick, up 500,000 since the first lockdown. Studies show that most of them are complaining about anxiety, depression or other mental health issues. None of this was expected.

A panic is now on in No 10 after Jon Ashworth, Labour’s work and pensions spokesman, emerged to give a speech to Iain Duncan Smith’s Centre for Social Justice (in which I’ve long been involved). Ashworth sounded just like a Tory circa 2009, talking about the scandal of millions on benefits: a waste of lives, not just money. His speech has, quite rightly, made the Tories sit up: there’s word that they’ll copy his welfare-to-work plan. But when did the roles reverse? When did Labour take the intellectual lead?

In the six years since IDS quit, he has had eight successors, lasting an average of seven months. This excludes Thérèse Coffey, the longest-lasting, whose job in lockdown was to transfer millions of people on to Universal Credit. Just before the first lockdown, the Tories had taken 33 million into work, an historic high. They were, as David Cameron put it, “the workers’ party”. Hence the confidence. “We know how to get people back to work,” Rishi Sunak would say while launching his furlough. “We have the levers.”

This was his big misjudgment. The mental health problems have changed the picture. Lockdown took its toll on mental health provision, so psychological problems that might once have been treatable were left to fester. The overall problem wasn’t obvious until it all ended and Britain was the only country to see its worklessness rate keep rising after lockdown. Only now is the picture becoming clearer.

Since Iain Duncan Smith’s time in office, the number of GP sick notes owing to mental health have jumped by 40 per cent to some 4,000 a day – equivalent to three million working days lost every month. The NHS has been increasing the number of antidepressants it gives out at a similar rate: it now issues them to about eight million people a year. So this is not a question of people exaggerating stress levels to claim benefits. By every available metric, Britain’s mental health caseload has been surging.

But the NHS’s ability to cope with mental health has not. Surveys say almost a quarter of those referred for such help wait at least three months, some more than a year. About half of those report their mental health deteriorating further as they wait. So the general NHS capacity issues feed back into workforce problems. This is what Labour is now trying to focus on. Ashworth wants to make it easier for those on sickness benefit to work as they recover, saying that this will cut welfare, to help the economy.

Monthly disability benefit claims have roughly doubled since the pandemic, with a third of applicants now citing mental or behavioural issues. Pre-Covid, Britain had made huge strides in helping people with disabilities back to work – up 2.3 million. The fastest-rising part of this had been those with mental health problems. What happened?

Mel Stride, the Work and Pensions Secretary, is moving too slowly. He’s promising a White Paper which some say has been ready since the summer but delayed by Tory mayhem. Anything that has to go through Parliament could take ages, perhaps years, given the controversy and likely amendments. Sunak is keen on the overall subject (and was struck, as chancellor, to find out that a third of British households are now claiming welfare of some kind) but he has other battles to fight.

Meanwhile, the welfare problem deepens. The Tories used to criticise Labour for keeping 2.7 million people on Incapacity Benefit, deeming them unable to work, abandoning them on the human scrapheap. Or so Tory reformers would say. But somehow, this problem has returned with the unsnappily titled “no work-related activity requirements” group of Universal Credit. Added to the older, similar benefits, that makes 3.5 million Britons in this category, with 700,000 of them saying they’d actually like to work. Yet the Tories are scratching their heads as to how best to let them. It’s as if the party forgot everything it ever learnt about labour market reform.

The lesson of the last decade was to offer support, both carrot and stick. Those claiming benefits would have to attend a weekly interview to discuss their ongoing job search – unless they found, say, 20 hours of work a week. Why not increase this requirement, given that Britain is midway through a worker shortage crisis? The answer would be comic, if so many lives were not at stake: they can’t find enough people to work at the Jobcentres. So a lack of workers is now slowing up the welfare-to-work drive. “We’re in a bit of a Catch-22,” says one minister.

The only way out of this will be to go back to Plan A. Universal Support was always supposed to go with Universal Credit, a coaching scheme attaching humans to humans, to minimise those lost in a maze of welfare bureaucracy. This was abandoned to save money, but it’s not clear how much we are saving now with a fifth of the people of Liverpool, Middlesbrough, Glasgow and Birmingham on out-of-work benefits. And each of these cities is crying out for workers.

The Tories have yet to admit that there are five million on welfare, so they have some way to go. This is a complex problem, with the mental health element making it especially so. But denial, as a strategy, is not a great place to start.