Rise in UK economic inactivity since Covid is genuine, says ONS chief

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A rise in UK economic inactivity since the pandemic is not an illusion created by faulty data, the head of the Office for National Statistics has said, in his first public defence of the agency’s handling of deep-seated problems with a key survey.

Sir Ian Diamond, the UK’s national statistician, told MPs on Tuesday that the ONS was “very confident” in official data showing a rise since Covid of some 2.8mn people neither in work nor looking for work, driven by ill health.

Policymakers are unable to place any weight on figures based on the ONS’s labour force survey at present because a sharp drop in response rates, which led to bias in the results, has made it unreliable.

Ministers had previously seen the rise in inactivity — unique to Britain among developed economies — as a key constraint on economic growth and a factor fuelling inflation.

But independent research has cast doubt on the findings, and the Bank of England has said it is no longer convinced that there has been any rise in overall inactivity since the start of 2020.

Diamond said that despite the problems with the survey, he was confident of the overall trend, which was consistent with records of benefits claims held by government, and reflected concerted efforts by ONS interviewers to reach people in more deprived areas.

“Please, please, please don’t think I am being complacent. I lie awake at night worrying about this the whole time,” he told the House of Commons Treasury select committee.

Diamond’s role in the breakdown of the UK’s labour market data has come under sharp scrutiny, following an internal review conducted by the ONS that called attention to a lack of strategic leadership and an internal culture that made staff at lower levels reluctant to raise concerns.

Diamond, in post since 2019, told MPs that declining response rates to the LFS were a long-standing concern, which the ONS was “watching very, very carefully and controlling”. But he said that he became aware of the survey’s fragility only in October 2023, when his agency abruptly pulled publication of results that were clearly implausible.