Tackling economic inactivity a challenge and opportunity
Date published:
The Chamber’s latest column for The Journal by Josh Maratty, policy advisor
Six years ago, Boris Johnson led a Conservative government fresh from a thumping general election win, promising to “Get Brexit Done”. Liverpool were on their way to a long-awaited league title, and Stranger Things had everyone glued to their screens.
Fast forward to today, and the political landscape has shifted. Keir Starmer is Prime Minister, Arsenal are chasing the end of their own title drought, and Stranger Things still has everyone glued to their screens. But unlike television series, an economy should not stand still for this long.
Between 2020 and 2026, growth has slowed to a crawl. Analysis from the Resolution Foundation showed that by the end of last year, the economy had taken six years to grow by what would previously have been expected in around seven months pre-pandemic. That is not a temporary wobble. It points to something deeper and more structural.
One of the contributors is the UK’s persistently high level of economic inactivity. Almost one million young people are now not in education, employment or training (NEET). That represents a huge loss of potential, both for the economy and for the individuals affected.
In the North East, the picture is even more acute. The region has the highest economic inactivity rate in Great Britain among those aged 16 to 64, with around a quarter of people in this group classed as economically inactive. That is an extraordinary proportion of the working-age population whose skills and experience are not being fully realised.
For too long, there has been an assumption that ‘market forces’ would correct this. If vacancies existed, people would naturally move into them. In reality, many face barriers that go far beyond job availability: long-term health conditions, caring responsibilities, limited transport, inflexible working patterns or a loss of confidence after time away from work.
At the same time, employers continue to report real recruitment difficulties. This creates a paradox at the heart of the UK’s growth problem: businesses struggle to find staff, while a significant share of the population remains excluded from employment.
At the Chamber, this tension is heard regularly. Many employers want to widen access to work and build more flexible and inclusive roles, but the system of support around skills, health and employment is often fragmented and hard to navigate.
If the UK is serious about restoring growth, economic inactivity cannot remain a side issue. It is not only a social challenge, but a productivity and growth challenge too.
But it is also an opportunity. An opportunity to rethink how work is designed and how people are supported back into employment. Done well, tackling economic inactivity is not just about improving the numbers. It is about giving more people the chance to contribute, progress and build secure futures, while helping regions like the North East play their full role in driving national growth.