Labour Urged to Launch National Occupational Health Service to Tackle Worklessness

Published: 15 September ‘2025. The English Chronicle Desk

The Fabian Society has called on Keir Starmer’s government to establish a “national occupational health service,” financed by a £2 billion levy on the UK’s largest employers, to address the country’s escalating worklessness crisis fueled by long-term sickness and poor health.

As Labour seeks solutions to record levels of long-term sickness keeping millions of people out of work, the think tank argued that a universal health service for employees could help more individuals remain in employment. The proposal envisions funding the scheme through a health component integrated into the forthcoming growth and skills levy, which will replace the existing apprenticeship levy. This system would address the current patchwork of inconsistent occupational health support provided by employers.

The Fabian Society recommends that the largest tenth of businesses contribute to funding occupational health services that could be accessed by companies of all sizes, with delivery managed by private providers. The initiative aims to support both employees and employers, ultimately boosting productivity and reducing economic inactivity.

Economic inactivity remains a major challenge in the UK, with more than nine million working-age adults, aged 16 to 64, neither employed nor actively seeking work. For nearly three million, long-term sickness is the primary reason, a crisis exacerbated by rising mental health challenges, particularly among younger adults.

Sir Charlie Mayfield, former chief executive of John Lewis, is leading a government review into solutions to improve workforce participation, expected to publish its findings this autumn. Mayfield welcomed the Fabian Society report, noting that its insights “resonate and reinforce many of the findings of the Keep Britain Working review.”

However, proposals requiring increased financial contributions from businesses could provoke resistance, as Chancellor Rachel Reeves faces pressure ahead of her autumn budget. Employers have expressed concerns over additional levies amid fears that rising costs could stifle economic growth and job creation, following tax increases introduced in her first autumn budget.

The Fabian Society’s report, titled “Nye’s Lost Legacy” in tribute to Labour’s transformative 1945 health secretary Aneurin Bevan, emphasizes that a national occupational health system would be beneficial for both employers and the broader economy. The study, supported by the Unison trade union, highlights that keeping employees in work who might otherwise exit the labor market due to ill-health is one of the most effective ways to reduce economic inactivity. Christina McAnea, general secretary of Unison, stressed that establishing a national system “is a win for workers, their employers, and the UK economy as a whole.”

Earlier this year, a PwC survey of 4,000 workers and businesses similarly concluded that stronger occupational health support is crucial. Access to occupational health services currently remains limited, with only 45% of UK employees able to access such support through their employer.

Saskia Otto, senior researcher at the Fabian Society and author of the report, described the proposal as a “generational opportunity” to enhance workplace health support. She noted, “Many employers invest significantly in workforce wellbeing, but the UK’s failing occupational health system often prevents them from seeing a meaningful return on that investment.”

A government spokesperson acknowledged the need to improve workforce participation, stating: “We are taking action to get Britain back to health and into work by giving people the skills and opportunities they need as part of our Plan for Change. Our record £3.8 billion of employment support is complemented by our Youth Guarantee, initiatives to tackle inactivity, and reforms to jobcentres, ensuring young people have access to training and employment opportunities.”

The Fabian Society’s call for a national occupational health service underscores the pressing need for a more coordinated approach to workplace health, aiming to prevent illness, retain employees, and reduce economic inactivity while promoting long-term economic growth across the UK.