- There was no evidence to support Chancellor Philip Hammond’s statement to the Treasury Select Committee that employing workers with disabilities lowers national productivity, the Treasury has admitted.
- Hammond had made people angry last month when he said: “far higher levels of participation by marginal groups and very high levels of engagement in the workforce, for example of disabled people – something we should be extremely proud of – may have had an impact on overall productivity measurements.”
- He doesn’t actually believe that, and the data don’t support it, the Treasury said in response to an FOI request last week.
LONDON – Chancellor Philip Hammond had no evidence to back his statement that disabled workers lowered British productivity, the government has quietly admitted.
Hammond made the statement to the Treasury Select Committee in December, during a discussion about why productivity rates had fallen in the UK, and the effect of that decline on British GDP.
Last week, the Treasury admitted there is no evidence to suggest that employing workers with disabilities lowers national productivity.
“There is no evidence of a relationship between aggregate productivity measures and an increase in workforce participation of people with disabilities. It has however helped to increase economic growth and it is something we can be very proud of as a country,” the Treasury said in a response to a Freedom of Information request by Steve O’Hear, a writer for Techcrunch.
At the committee hearing, Hammond had been asked why UK productivity was near zero in 2017. He replied:
“It is almost certainly the case that by increasing participation in the workforce, including far higher levels of participation by marginal groups and very high levels of engagement in the workforce, for example of disabled people – something we should be extremely proud of – may have had an impact on overall productivity measurements.”
He was heavily criticised for the statement by opposition MPs, who felt that it suggested that employing workers with disabilities was unproductive.
“The Chancellor was not suggesting – and does not believe – that increased participation by people with disabilities has had any negative impact on the economy.”
The Treasury declined to comment when reached by Business Insider. However, a spokesperson pointed to a section in its FOI response that says:
“The Chancellor made a broader point about economy-wide labour productivity. Both the Institute for Fiscal Studies and the Office for Budgetary Responsibility have suggested that increasing overall employment may have influenced measures if productivity. The Chancellor was not suggesting – and does not believe – that increased participation by people with disabilities has had any negative impact on the economy.”
In an interview last week with Business Insider, IFS Director Paul Johnson confirmed there was no economic evidence that disabled workers lower overall productivity. The issue, Johnson says, is that economists generally believe that when a country reaches full employment as the UK has, then the extra workers being pulled into employment tend to be “the number 10 and number 11 batsmen” – a cricket metaphor suggesting that industry will already have employed the most productive workers. It may have been that belief that Hammond was clumsily reaching for in his December testimony, a Downing Street source suggested to Business Insider.
“But even that [analogy] doesn’t work,” Johnson said, “because the employment rate in Germany is similar to ours and their productivity is much higher. In the short run, if we were to employ a large number of lower-skilled or disabled people this year that might drag average productivity down a little bit, but that is not the underlying reason we have low productivity,” he said.
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