Office for Budget Responsibility to give evidence to Lords inquiry on economic inactivity

At 3pm on Tuesday 5 November, the House of Lords Economic Affairs Committee, as part of its short inquiry on the relationship between the welfare system and long-term sickness, will hear evidence from:

• Richard Hughes, Chair, Office for Budget Responsibility (OBR)
• Tom Josephs, Member of the Budget Responsibility Committee, Office for Budget Responsibility
• Prof. David Miles, Member of the Budget Responsibility Committee, Office for Budget Responsibility.

This evidence session, which is open to the public, will be held in Committee Room 2 of the House of Lords. It will also be streamed live and on demand on Parliament TV.

Questions the committee is likely to cover in this session include:

• What risks has the Government taken on in swapping Public Sector Net Debt (PSND) for Public Sector Net Financial Liabilities (PSNFL)?
• How do witnesses view the retention of the rolling-year target for debt – albeit changed from five to three – in light of the committee’s concerns that it can be easily gamed?
• What guidance has the OBR been given on the definitions of investment?
• What is the overall impact of long-term sickness on the economy?
• What impact has changing conditionality in the benefits system had on individuals’ incentives to work over the years? Would witnesses consider the benefits system to be flawed?

What changes to the benefits system, if any, would witnesses advocate for in order to get people back to work?

More about the Economic inactivity: welfare and long-term sickness inquiry

As a follow up to its 2022 inquiry into economic inactivity, the committee is carrying out a short inquiry on the relationship between the welfare system and long-term sickness in Great Britain.

Rates of economic inactivity – measured as a proportion of people of working age – fell steadily from 2012, reaching an all-time low of 20.7 per cent in early 2020. However, the COVID-19 pandemic saw a sudden and dramatic reversal of this trend with rates of long-term sickness becoming an increasingly important factor as the pandemic wore on.

The committee is seeking to understand the impact, if any, that changes in the benefits system have had on trends in long-term sickness and inactivity. It will hear views on what is being done in this area, and what should be done, to mitigate elevated levels of long-term sickness-related inactivity and the associated rising costs of welfare.