Battered by the financial crisis and pandemic, Britain has lost its culture of risk-taking. In the third of a special election series, The Telegraph examines how this has affected the economy and whether Labour can bring swashbuckling back to the City.
When Stuart Forrester and his wife founded their business and marketing consultancy in 2006, they turned to an unlikely place to source new recruits: the school playground.
The couple began hiring mothers who they met on the school run as freelancers, with the company using eight regular contractors by 2019. However, as their business grew, they hit a wall with recruitment.
The Forrester Corporation needed people to do more work but their freelancers started turning down the hours. “We started to get told, ‘I’m at 16 hours [a week], that’s where I want to stay’,” Forrester says.
Many of their freelancers were on benefits, which they would start losing if they worked more than 16 hours a week, as well as spending less time with their children.
Forrester had to find other ways to fulfil their client contracts. Today, he regularly uses a network of 13 contractors who are based primarily in the Philippines and charge 50pc to 80pc less than their British counterparts.
This is emblematic of a deep-seated problem that is crippling British business and poses an existential threat to Labour’s headline pledge to achieve the highest sustained growth in the G7 if they win the July election: the UK’s workforce has lost its dynamism.
Since the financial crisis, productivity growth has been the slowest since the mid 18th century. The UK has had the lowest business investment in the G7 for three years in a row. And economic inactivity has soared since the pandemic began, with nearly 1.1 million working-age adults dropping out of the labour market.
There are now 9.43 million people who are neither employed nor looking for work, a 13-year high.
This workforce exodus has left businesses scrambling to find staff. In the spring of 2022, the number of job vacancies in the UK hit a record high of 1.3 million, up 59pc since before Covid.
This number has been falling steadily since, but this spring there were still 904,000 unfilled jobs, more than at any point since the financial crisis – and a figure that roughly matches the post-pandemic rise in economic inactivity.