A new paper argues that Britain's deteriorating health is not only a health problem but a fiscal and growth problem, and attempts to put a number on it.
The Health Foundation estimates that restoring working-age health to its 2014 level would raise economic output by £57bn, around 2 percent of GDP, and deliver a £72bn improvement to the public finances, according to the Guardian.
The two figures are not the same thing and should not be added together. The £57bn is additional output. The £72bn is the fiscal effect, arriving through higher tax receipts and lower spending on social security and health care.
The underlying deterioration is measured, not modelled
The modelling deserves scepticism, but the starting point does not. Two figures in the paper describe something that has already happened.
Healthy life expectancy in the UK fell by two years in the decade to 2022-24. The UK was one of only five of the world's 21 richest countries to record a deterioration over that period, which rules out explanations that apply to advanced economies generally.
Over the same decade, the number of working-age people with a long-term health condition rose from 11.7 million to 15.7 million. That is an increase of four million people in the working-age population living with a condition, and it is the number doing most of the economic work in the argument.
The paper also records a stark distributional gap: people in the richest tenth of areas can expect as many as 20 more years of life in good health than those in the poorest tenth.
How ill health becomes lost GDP
The mechanism runs through labour supply, and it has three distinct channels worth separating.
The first is participation. People too unwell to work at all leave the labour force entirely, which removes their output and their income tax and national insurance contributions.
The second is hours. Many people with long-term conditions work, but fewer hours than they otherwise would, or in less demanding and lower-paid roles.
The third is productivity while working, which is the hardest to measure and probably the largest in aggregate. Someone managing a chronic condition at work is producing less than they would in good health, and none of that shows up in unemployment statistics.
As the paper's authors put it, a healthy labour force "is also the engine that powers our economy", determining "whether people can participate in employment, how effectively they work and how long they remain in the labour market."
The fiscal loop
The reason this belongs on a Treasury desk rather than only a health one is that the effects compound in the same direction.
A sicker working-age population pays less tax, because fewer people are working and those working earn less. It simultaneously costs more, through disability and incapacity benefits and through health care itself. Revenue falls and spending rises together, which is why the fiscal figure is larger than the output figure.
David Finch, interim director of health and inequalities at the Health Foundation, framed it as an investment case: "Restoring the nation's working-age health to 2014 levels could unlock £57bn in economic output and provide a £72bn boost to the public finances through stronger tax revenues and reduced spending on social security."
What to be sceptical about
Three caveats matter, and a reader should hold all of them.
The first is that this is a counterfactual model, not an observation. It calculates what output might be if a variable were different, and the answer depends heavily on assumptions about how much of the health decline is recoverable and how quickly people would return to work.
The second is reverse causality. Poor health reduces employment, but unemployment and low income also worsen health. Any estimate that treats health as the independent variable will attribute to health some damage that runs the other way.
The third is that 2 percent of GDP is a very large claim. For scale, it is the kind of figure normally attached to a major trade agreement or a decade of productivity reform, and it is being attributed to reversing one decade of health deterioration.
None of that makes the direction wrong. The measured decline in healthy life expectancy and the four-million increase in working-age ill health are real, and both have economic consequences whatever the precise multiplier. The number to argue about is the size of the prize, not whether one exists.
