LABOUR’S cost-cutting welfare reforms are unlikely to improve the skyrocketing cost of work-related ill-health, currently valued at over £415 million a week, the TUC and campaigners have warned.

The union federation pushed back against No 10’s claims last week that the “broken social security system is holding our people back” ahead of an anticipated welfare overhaul.

In analysis published today, it stressed that a boom in insecure employment has coincided with a major increase in the number of productive days lost to work-related sickness, totalling 34m between 2023 and 2024.

This is a third more compared with 22m in 2010 — topping an eyewatering £415m a week.

TUC general secretary Paul Nowak said: “Work related ill-health is costing us hundreds of millions each week — that’s billions of pounds down the drain every year. 

“That’s why the government’s Employment Rights Bill is so important. 

“We need to turn the corner on Britain’s low-rights, low-pay economic model that has been tested to destruction over the last 14 years. 

“Giving working people more control and predictability over their lives will help create a happier, healthier and more robust workforce.” 

A new report by the Commission for Healthier Working Lives is warning that poor-quality work can harm employee health.

“Most health conditions develop outside work, but for a significant number of people, work itself is the cause,” the report says.

“Persistent insecurity, workplace discrimination and extreme demands take a serious toll on health. In some cases, poor-quality work is even worse for health than being unemployed.”

Last Friday, Downing Street said there has been an “unsustainable rise in welfare spending” and promised reforms in the coming weeks.

Chancellor Rachel Reeves has also suggested that the system is currently “letting down taxpayers” due to the costs, ahead of her Spring Statement later this month.

Yesterday, Disabled People Against Cuts co-founder Linda Burnip warned that further austerity would not reduce the number of people out of work due to long-term illness.

She said: “It’s not just job insecurity but the demise of access to treatments, particularly for mental health conditions, that has contributed to this increase in ill-health.

“In turn, the ever increasing cost-of-living crisis has also fuelled further cases of stress, anxiety and depression.

“However, as Labour seem intent on pursuing further austerity and continuing to push forward massive cuts to disability benefits, it seems unlikely that simply reforming working practices will result in fewer people suffering mental health conditions in the future.”

Meanwhile, 10 leading economists and labour lawyers have debunked business lobby claims that the Employment Rights Bill will stifle economic growth, in an open letter published today.

Business groups including the CBI have claimed that the Bill, returning to Parliament this week for its report stage, will cause particular harm to small and medium-sized enterprises (SMEs).

Experts dismissed these as misleading in the letter, arguing that “labour laws do not, on the whole, have negative economic consequences, and may well have positive ones.”

“SMEs especially benefit from effective labour law enforcement and inspection, which limit the scope for undercutting,” the letter reads.

“Ultimately, nobody gains from a race to the bottom.”

One of the signatories, University of Greenwich economics professor Ozlem Onaran, added that British history shows that stronger employment rights contribute to economic stability rather than hinder it.

She said: “The notion that protecting workers harms growth is not supported by serious economic research.

“The idea that weaker worker protections are necessary for growth is fundamentally flawed.

“This does not create a sustainable economic model— it simply increases inequality and instability.

“Labour laws promoting collective bargaining tend to raise wages and stabilise employment.

“Higher wages increase demand for locally produced goods and services, which directly benefits businesses.”

The group argues that “labour laws need not deter private investment and can complement improvements to public infrastructure. Over time, as their effects feed through to the wider economy and government finances, labour laws largely pay for themselves.”

Another signatory, chairman of the Institute of Employment Rights Lord John Hendy KC, added: “Stronger employment protections are not an obstacle to economic growth but a driver of stability, productivity and fairness.

“This Bill is an important first step in addressing the failures of deregulation, but it does not go far enough.

“Without decisive action to close loopholes, strengthen enforcement and deliver the protections workers need, the UK will remain out of step with European and international labour standards.

“This is a once-in-a-generation moment to get it right and rebalance the power relationship between workers and employers in the UK.”