500,000 men quit the workplace

HALF a million men have left their jobs because of generous long-term sickness benefits, a report revealed yesterday.

They have been 'tempted' to give up work by the system, suggests a study by the Bank of England. Many claim to be suffering from conditions such as stress, depression and back pain.

The findings will fuel concern that the benefits system is being abused on an unprecedented scale.

The Bank's analysis found that more than 500,000 men of working age left the labour market during the 1990s. Almost all were unskilled workers aged between 25 and 54 - the same group who reported increasing long-term illness.

The number of women in work, by contrast, appeared to have risen - probably because of increased job opportunities.

The report says: 'The generosity of the disability insurance system relative to that of unemployment insurance appears to have encouraged such workers to exit the labour market.'

The apparent rise in sickness was 'surprising'. The report adds: 'After all, mortality rates for prime-age males have been falling for hundreds of years and continue to do so.

'The decline in labour force participation was most pronounced among prime-age men, with the early retirement trends explaining very little of the change. Very few of these workers entered retirement - the largest flow was into long-term sickness.'

At the start of the 1990s, a total of 398,000 men aged between 25 and 54 were claiming some form of disability benefit. The report says the latest figures suggest this has risen to at least 803,000.

The number of people exiting the job market had been 'almost exactly matched' by the rise in disability benefit claims.

The rise in claimants had been accompanied by a 'large increase' in numbers citing mental and behavioural disorders.

The report concluded that the exodus of men from work to sickness benefits in the 1990s was unlikely to be repeated. It said they were now 'relatively less attractive compared to unemployment benefit'.

Meanwhile the number of adults of working age who are not looking for a job has risen by more than 100,000 in the past year to a record high of almost eight million. There are currently more than two and a half million claiming incapacity benefit - costing the taxpayer £6bn a year.

In some regions one in four men is now on the benefit, paid to compensate for lost earnings. It is the main welfare payment for those too sick or disabled to work. Disability claims for mental and behavioural disorders - paid to those who have problems getting around or need help looking after themselves - have also rocketed.

Doctors admit they are writing sicknotes on demand rather than acting as 'health police'.

The Tories said the report showed that Labour was failing on welfare after pledging to cut the burden.

Shadow Work and Pensions Secretary David Willetts said: 'The system still has enormous incentives to put people on to disability benefits. It's hidden unemployment and it's particularly worrying that these are younger people. The Bank is quite right to say that getting off these benefits and into work is very difficult.'

Economist Ruth Lea, director of the Centre for Policy Studies think-tank, said there was still a clear incentive for people to claim long-term sickness benefit rather than jobseeker's allowance.

Incapacity benefit is worth up to £74.15 a week, compared with the jobseeker's allowance of up to £55.65. The amount paid increases for people who stay on incapacity benefit long-term.

'Once people are on this benefit it is extremely unlikely they will go back into the job market,' said Lea.

She called for independent panels of doctors to assess claimants before they enter the system. 'I'm afraid I don't buy the argument that all these people are genuinely ill,' she said.

The Department for Work and Pensions said the Bank's report was largely based on research from Sheffield Hallam University, with which it disagreed.

The number of incapacity benefit claimants had gone up by 120,000 since 1997, but the rate of increase had fallen sharply.

'The capability assessments for incapacity claimants are among the toughest in the world,' said a spokesman.

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