The workforce has lost more than one million people since the pandemic began, with 400,000 out of jobs because of health issues such as long Covid.
Disruption to care and declining mental health is also driving Britons out of jobs, the Institute for Public Policy Research said.
‘Deep’ health inequalities in the UK mean people live shorter lives, suffer more illnesses and face greater barriers to work, the thinktank’s report claimed.
If the issues were not resolved, they would drag down economic activity this year by an estimated £8 billion, it added.
Warning of the UK’s ‘terminally low’ productivity, researchers said those in the most economically deprived parts of the country, including Blackpool, Knowsley and Barking and Dagenham in London, can expect to fall into poor health in their late 50s.
This is five years earlier than the national average.
The gap is partly down to low-quality housing, low wages and chronic stress, found the think-tank, which is launching a cross-party Health and Prosperity Commission to study links between health and the economy.
Former chief medical officer Dame Sally Davies said the ‘scars’ of the pandemic still remain deep on the nation’s health and our economy.
‘Not only are we facing a severe cost-of-living crisis, driven in part by pandemic-induced inflation, we’re also experiencing a workforce shortage driven by poor health that’s holding back the economy,’ Dame Sally, who is chairing the commission, said.
‘It has never been more important to put good health at the heart of our society and economy, and our commission will bring forward a plan to do just that.’
A Government spokesperson said tackling health disparities is a ‘priority’, adding they have committed £224 million to support people with long Covid.
‘Our Health Disparities White Paper, due later this year, will set out bold action to reduce the gap in health outcomes between different places, so that people’s backgrounds do not dictate their prospects for a healthy life,’ the spokesperson said.
‘We provided unprecedented support to the economy during the pandemic, which protected millions of jobs and businesses – and unemployment is now back below its pre-pandemic levels.’
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