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Number of households that have never worked hits 12-year high

Houses
Houses

The number of households in the UK that have never worked has hit a 12-year high as the labour crisis gripping Britain’s economy deepens, official data shows.

In the first three months of this year there were 269,000 non-student households where no adult had ever been employed, the highest since spring 2012 – the aftermath of the global financial crisis.

It also represents a 12pc jump compared with the same period a year earlier, the Office for National Statistics (ONS) said.

Between January and March, there were 4.3 million 16 to 64-year-olds living in households where no adult was employed. This is almost 300,000 higher than the end of last year and the highest total in seven years.

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It comes amid a wider worklessness crisis that experts warn is crippling Britain’s growth as Rishi Sunak gears up for a general election in July.

Nationally, there were 9.4 million working-age adults who were economically inactive at the beginning of the year, meaning they were neither employed nor looking for work, up by 832,000 compared with pre-pandemic levels.

Sir Jacob Rees-Mogg, the Tory MP and former business secretary, said high levels of economic inactivity were a “huge problem” for the country.

He said: “If you have people who are not in work, they’re not going to be helping to boost GDP per capita. So it means the state has less money to pay either for tax cuts or public services.

“It also encourages people to make the argument that we need mass migration because there is work that needs to be done and the people who work for us aren’t obviously doing it.”

Tony Wilson, director of the Institute for Employment Studies (IES), said the surge in jobless households was likely driven by an increase in worklessness among young people.

He added: “If that is the case, then what it likely reflects is that there are too many young people who are slipping through the cracks.”

Official data published last week found the number of 16 to 24-year-olds who are not in education, employment or training (NEETs) hit a nine-year high of 900,000 at the start of this year. This was up by 18pc since before the pandemic and the highest level since spring 2015.

Experts warned this risks creating a snowball effect as young people who are NEET are more likely to stay out of the workforce long-term.

Mr Wilson said: “Spending a long period out of work and education when you’re young causes lasting harm. And it doesn’t just harm those people, it harms society and the economy.”

He added that long periods of worklessness among young people is more likely to mean they have poor health in later life and to have permanently lower incomes.

Mr Wilson said: “They are also more likely to have kids who are then disadvantaged.”

The Prime Minister is seeking to address worklessness with a campaign pledge to introduce National Service for 18-year-olds.

However, Mr Wilson said the scheme would be funded by diverting cash from other programmes that are helping economically inactive people get back into the labour force.

The Tories have said the scheme would cost £2.5bn and will be funded mostly via the UK Shared Prosperity Fund, which provides financial support for community organisations.