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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 failures over critical labour market data.
Sir Ian Diamond, the UK’s national statistician, told MPs on Tuesday that the ONS was “very confident” in data showing that the number of people neither in work nor looking for work due to ill health had risen to some 2.8mn since Covid.
In post since 2019, Diamond has come under fire from politicians, the Bank of England and analysts over deep-seated problems with the ONS’s labour force survey, a key input to the central bank’s decisions on interest rates.
Policymakers are unable to place any weight on figures based on the survey at present because a sharp drop in response rates, which led to bias in the results, has made it unreliable.
“Please, please, please don’t think I am being complacent. I lie awake at night worrying about this the whole time,” Diamond told the House of Commons Treasury select committee.
But he said that even though bias had crept into the data, he was confident the rise in health-related inactivity shown in the numbers was real.
“What we are seeing in consistent surveys . . . we are continually seeing this as a factor of the post-Covid years in our country,” he said, adding that the increase reflected rising mental ill health among young people and a “flight from the workforce” among the over-50s.
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 ONS’s 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.
Despite the problems with the survey, Diamond said 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.
Diamond’s role in the breakdown of the UK’s labour market data has come under sharp scrutiny, following an internal ONS review that blamed a lack of strategic leadership and an in-house culture that made staff at lower levels reluctant to raise concerns.
He told MPs that declining response rates to the LFS were a long-running concern, which the ONS was “watching very, very carefully and controlling”. But he said he became aware of the survey’s fragility only in October 2023, when his agency abruptly pulled publication of results that were clearly implausible.
Asked about the Resolution Foundation’s findings that suggested no surge in the rate of economic inactivity since Covid, Diamond said comparing the think-tank’s figures with those of the ONS was “like trying to compare Torquay United with Manchester City”.
The ONS had since almost doubled the number of households it contacts to overcome “very high levels of flat refusals” to respond, increased incentives from £10 to £50 and recruited more interviewers, Diamond said.
He added that while the agency’s aim was to expand its field force to 1,000, it would not have enough funding to hit the level of 1,500 a review had found necessary “to get great statistics across all surveys”.
Meanwhile, the ONS is working to overcome problems with the online-first “transformed” labour force survey intended to replace the LFS, following delays owing to issues with the length and design of the questionnaire.
Diamond said this TLFS could be ready to replace the LFS earlier than the date of 2027 the ONS gave last year — potentially from early in 2026. “My professional view is that I’m super-hopeful,” he told the committee.
However, he acknowledged that the ONS was still struggling to recruit and retain interviewers and other staff, partly because the agency pays lower salaries than private sector research companies and other departments.
“There is a market within the civil service. We are relatively low payers,” he said, adding that the ONS was trying to promote experienced interviewers to a better-paid grade and had asked HM Treasury to support this.
The ONS had felt the effects of rising inactivity among older workers in its own field force, Diamond admitted, noting: “Our best interviewers . . . not all of them have come back to the labour force since the pandemic.”
This story has been amended to clarify the rise in people deemed economically inactive since Covid