I get £1,300 a month and all my housing costs paid. Why would I need the hassle of having to wake up every morning and go into work? A shocking insight into the lives of the economically inactive

It is a mid-week afternoon in the Essex seaside resort of Clacton. Under heavy grey skies, a biting wind howls through the almost empty streets of the town and waves crash onto the deserted beach.

Despite the cold, a group of five men have gathered in the town's main square. None of them are in work. Sitting on a bench with a can of beer in hand, 38-year-old James explains that he has not had a job for eight years and is content to live on welfare.

'At the end of the day, working — it's not worth it for me,' he says. 'I get my housing costs paid for and I get £1,300 a month. To be honest, I'm better off not working. I just don't want the hassle of waking up at a certain time in the morning and going through that energy.' His companions nod in agreement.

On the nearby seafront, four men in their 20s and early 30s can be seen laughing as they stroll along the pier. In contrast to James, who did have a job until he suffered an injury and subsequently developed tinnitus and mental health problems, none of this quartet has ever been employed or had any ambitions to take an occupation or career.

All are on benefits and living with their parents. 'I don't feel ready; I just couldn't work,' says one. 'I can't handle the pressure. I find it overwhelming,' says another.

What is particularly striking is that all four now claim disability payments because of poor mental health, citing problems such as depression and anxiety.

Another young man, Tom, 25, who is standing at a bus stop, says he has been out of work for more than a year and lives on benefits. 'I also get PIP [Personal Independence Payment] for my ADHD and autism.' He blames 'the economic crisis' on his inability to find a job.

Such conversations provide an alarming insight into the epidemic of worklessness that has swept Britain in recent years, hindering economic growth, pushing up welfare bills, making it hard for employers to fill vacancies and throwing millions of people on the economic scrapheap.

It is a disastrous waste of talent and human capital — and the crisis is becoming worse. In 1979, the Conservatives won a famous election victory under Margaret Thatcher, helped by an award-winning advertising campaign by Saatchi & Saatchi that featured billboard posters with an image of a snaking dole queue, accompanied by the slogan, 'Labour Isn't Working'.

Today, 45 years later, it could be said that after 14 years of Tory rule, 'Britain isn't working'.

The depressing experience of Clacton is replicated across the country, as welfare dependency accelerates and a swelling army of citizens abandons the labour market, many of them arguing that they need to protect their mental health.

For a country that once pioneered the Industrial Revolution and was known as 'the workshop of the world', the scale of the worklessness phenomenon is shocking.

A total of 9.4 million people of working age are now economically inactive, meaning they are neither employed nor looking for work.

Of this huge group, around 5.5 million are claiming benefits.

And yesterday it was revealed that more than 2.8 million of these are on long-term sick leave — the highest figure ever.

At the end of last year, 4,000 applications for sickness benefits were being made every single day. In such circumstances, it is no wonder that the costs of social security are soaring.

Currently standing at £297 billion, the overall welfare bill is projected to climb to £360 billion over the next five years — the equivalent of 11 per cent of Britain's entire economic output. Over the same period, spending on sickness benefits is expected to rise from £66 billion to more than £90 billion.

Particularly striking is the pattern of worklessness among young people. One recent survey by this paper showed that in the 16 to 24 age group, 280,000 people are in receipt of unemployment benefits — twice as many as a decade ago, and 50,000 more than before Covid struck.

And it appears that the younger generation are more likely to be afflicted by negativity about their mental health.

Research by the Resolution Foundation revealed that the number of 18 to 24-year-olds who are economically inactive due to mental health has more than doubled in the past decade from 93,000 to 190,000.

Strikingly, the think tank found that some 12 per cent of people in their 20s and early 30s say they are 'disabled' because of their mental health — more than in any other age group.

In the late 1970s, before Margaret Thatcher swept to power and embarked on a programme of national renewal, Britain was nicknamed 'the sick man of Europe' because of the prevalence of strikes and unemployment under Labour.

There is a real danger that such a label is becoming appropriate once more as too many Britons turn their backs on the world of work.

A recent study by King's College London, found that a fifth of Britons did not feel that work is important to their lives — the highest proportion out of the 24 countries surveyed, which also included France, Sweden, the U.S., Nigeria, Japan and China.

One major international investor, Neeraj Kanwar of India-based Apollo Tyres, has said that he would not open a factory in Britain because the welfare state has bred a spirit of idleness here. 'British workers hardly work — they go down to the pub,' he complained.

The disturbing reality is that Britain is in retreat from the political achievements of recent governments — most notably David Cameron's Tory-led coalition, which talked of supporting 'the strivers, not the skivers' — in rolling back the frontiers of the welfare state and promoting the work ethic.

In place of ambition and personal responsibility, there is now a mood of entitlement, fatalism, lethargy and fragility, epitomised by demands for more generous benefits and attacks on politicians who attempt to address the issue.

Last month, when Mel Stride, the Work and Pensions Secretary, expressed his concern about the rise in benefit claims related to mental health, warning that the 'normal anxieties of life' are now being labelled as psychiatric disorders, his comments were met by a chorus of disapproval led by opposition MPs, pressure-group campaigners and experts.

The reaction of Dr Lade Smith of the Royal College of Psychiatrists summed up the attitude of his detractors. Stride, she said, had 'diminished and misrepresented people with mental illness'. She added that people 'are not pretending to be sick, they really are sick'.

Dr Smith might be right in some cases — but something does seem to have gone badly wrong in modern Britain, and the damage is being felt right across the country.

Even in supposedly booming Manchester, 18 per cent of the adult population in the city is on out-of-work benefits. This figure rises to 20 per cent in Birmingham and Liverpool, 23 per cent in Middlesbrough and 25 per cent in Blackpool, once the jewel in the crown of British holiday resorts but now falling on hard times.

Indeed, as Clacton and Blackpool show, there is a particular problem with the UK's seaside towns, which have never recovered from the loss of custom to overseas package holidays and often suffer from poor transport links.

In fact, Clacton is reportedly the most deprived place in England, with 47 per cent of the population economically inactive, compared with a national average of 21.7 per cent.

But why has the problem become so much worse in recent years? Why has the traditional work ethic been so badly eroded? One explanation is the impact of Covid, which encouraged people to re-evaluate their priorities and place more emphasis on aspects of their lives beyond work.

The introduction of the £97 billion furlough scheme, under which millions were effectively paid to stay at home, broke down the stigma of claiming something for nothing. The whole nation was doing it with the express approval of the Government, and that spirit still lingers.

Covid also pushed up property prices by 20 per cent, discouraging many young people from working to get up the property ladder. They see their modest incomes being swallowed up by exorbitant rents and take the view, with some justification, that they may never own a home no matter how hard they work.

Meanwhile, the obsession with 'mental health issues' has a twofold impact.

First, it is undoubtedly true, whatever the Royal College of Psychiatrists says, that there are perverse incentives to claim disability benefits such as the Personal Independence Payment (PIP) because they are both more generous and, once awarded, impose fewer conditions on the claimants.

A single adult aged over 25, deemed fit for work, will receive £393.45 a month in Universal Credit. But if they are found by a Work Capability Assessment to be unfit for work, they could be entitled to an extra £416 on top of this standard rate.

And this payment does not even include additional subsidies for housing, travel, child support and council tax discounts.

Once in place, the money from PIP keeps flowing. Since April 2019, out of 2.4 million Work Capability Assessments conducted, no fewer than 65 per cent of them concluded that the claimant would never have to work again.

The second consequence of the current neurosis about mental health is it has robbed too many young people of their resilience. With all the emphasis on 'trigger warnings', 'victimhood' and 'safe spaces', they inevitably feel daunted by challenges rather than determined to overcome them, particularly in the wake of the disruptions and isolation they had to endure during the pandemic.

'It's a difficult arena out there for them,' says Vicky Head of the charity Catch22. 'Covid hasn't helped and I don't think there was enough put in place at the time. They need a bit of hand-holding.'

The rich irony is that the best antidote to mental health problems is actually to enter the workplace, as a job helps people find purpose and spend less time mulling over their troubles.

And in that reality lies the hope of conquering the worklessness. One of those who has recently escaped the ranks of the inactive is 20-year-old Elysha, who gained work experience via the Prince's Trust and has since taken up a post at Sainsbury's. 'Being out of work negatively affects you mentally,' she says. 'It is not good. If you suffer from mental health issues, it makes them worse.'

Since she found employment, her life has been transformed. 'I am interacting with people and have opportunities to progress. I wouldn't change it for the world. I am feeling much more confident about the future.'