With millions on benefits, we don’t need mass migration to boost GDP

Westminster hasn’t begun to grasp the scale of this scandal – five million Brits are on out-of-work welfare

Would you like to work for one of Britain’s biggest fashion retailers? If so, Next is looking for staff in its Dearne Valley warehouse near Rotherham. “You could walk five miles a day!” chirps its advert, “constantly pushing and pulling large tote boxes on conveyor belts and working on your feet.” The shift starts at 5am, so you’d need your own transport. And the starting salary? A princely £9.80 an hour, 30p above the minimum wage. Maybe more, if you’re lucky. But I’m not sure I’d bet on it.

But it seems Next is having trouble filling such vacancies. Nearby, Asda is offering £10.10 an hour to pack online shopping at its store in town, or £12.64 to be a shop assistant. Why break your back on a 5am shift for far less cash? It’s a tough market. Might warehouses need to offer more competitive salaries? But Lord Wolfson, chief executive of Next, is asking a different question: where have the Poles gone? There’s only one answer, he says: import more workers. And quickly.

The noble lord was on television yesterday, painting a picture of a country now on its knees for want of immigrants. “We have got people queuing up to come to this country to pick crops that are rotting in fields, to work in warehouses that otherwise wouldn’t be operable,” he said. “And we’re not letting them in!” And yes, he was – once – a big Brexiteer. “But it’s definitely not the Brexit that I wanted, or indeed many people who voted Brexit.” This is where I have to disagree with him.

Perhaps the main reason people voted for Brexit was a feeling that globalisation was in danger of taking a wrong turn, allowing employers (and politicians) to overlook entire chunks of the population. The NHS has been one of the worst: half of new nurses registered last year were from overseas. The fact that we don’t train enough nurses to staff our own National Health Service is almost the definition of short-sightedness. Would it have hurt so much to train more here? Too many employers have become addicted to importing, rather than training, workers. Or saving money on machines by using cheap humans instead (we’re one of the least automated G20 countries).

Instead of doing the difficult job of hiring the long-term unemployed, British employers have been able to pick up the phone to an agency in Gdansk, which would then fly over whoever was needed for the warehouse shifts. Cheaper? Certainly. Did it make our clothes cost less? Probably. But good for the country? Absolutely not.

During the two decades before Brexit, two-thirds of the growth in employment was accounted for by foreign-born workers, so the “jobs miracle” did not help edge-of-town housing estates as much as it could have done. The undoubted progress made by David Cameron’s welfare reform was wiped out by lockdown and today there are 320,000 fewer workers than before the pandemic.

That’s like losing a city the size of Bristol from the economy. No wonder GDP has stalled.

The funny thing is that Brexit did not slow the migrant influx. Visas are being issued at the rate of 8,500 a week at the last count, the highest on record. The newcomers are higher skilled, which is perhaps what irks Lord Wolfson: there isn’t as much warehouse fodder nowadays. But he should direct his ire at the dysfunctional welfare system.

Let’s take Rotherham, whose citizens are showing such little enthusiasm for Lord Wolfson’s 5am shifts. Some 16 per cent of the city’s working-age population are on out-of-work benefits. So this is the puzzle: how can mass vacancies and mass unemployment co-exist in the same town? What can be done to help people from welfare to work? Higher wages, to be sure. But they also need more active government help, whether that be with skills or medical conditions. Remember, there are seven million people on the NHS waiting list.

Rotherham is by no means a welfare black spot. Many of our great cities – Birmingham, Glasgow and Liverpool, to name but a few – now have 20 per cent of the working-age population on out-of-work benefits. In Middlesbrough, it is 23 per cent. In Blackpool, 25 per cent. Across the UK, it’s 5.3 million people: a staggering, scandalous figure that goes almost entirely unreported in the political discussion because the data exist in fragments that no one in Westminster has yet added up.

The Tories have taken a seeno-evil approach, boasting about unemployment being near a 50-year low (technically true, if you take a narrow definition). “Rishi will probably keep using this boast, even if we all know it’s nonsense,” says someone who was recently advising the Prime Minister on the subject. “People won’t see that it’s over five million [on out-of-work benefits] because Universal Credit has made it all harder to understand.” Even Labour thinks it’s only three million – a figure that Alison Mcgovern, the shadow employment minister, used in Parliament last week.

A good chunk of the five million will be genuinely unable to work: longterm sick, or perhaps on the evergrowing NHS waiting list. But Sunak should be optimistic about getting at least a million back to work. It will be difficult, but it’s not clear that he has any other options. We are probably already in a recession that will only be deepened by the tax rises expected in his Autumn Statement next week, so moving people off benefits and into work will be one of the few tools that he has left.

I’d go further and say that his only hope of proper economic growth is to recognise and then reduce the benefits backlog. No country can properly prosper while overlooking 13 per cent of its population. This is one of the basic truths that the Brexit vote was supposed to force politicians and businesses to confront: we have people here, willing to work. But they need training and encouragement – from business, the Government, or both. To ignore them, and import workers instead, would not just be an economic failure, but also a moral one.

So as Sunak plans his Autumn Statement, he should see the massive unemployment figure as the foundations of an economic recovery. With enough imagination, there will be ways of helping people back to work. The economy needs them, and they need the economy. We will see next week if the Prime Minister is able to put them together.

Instead of doing the difficult job of hiring the long-term unemployed, employers have phoned an agency in Gdansk