14 September 2004

Alan Johnson MP, Secretary of State for Work and Pensions

Humber Employment Framework Conference

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I’m delighted to be here with you again today. The Humber Employment Framework is playing a crucial role in improving understanding of employment issues and in producing better links between people and employment opportunities in the area.

I would like to start by saying a bit about poverty. At the beginning of this week I was with the Prime Minister at Number 10 to launch “Opportunity for All” – the Government’s sixth annual report into the progress we are making in tackling poverty.

There was some very encouraging news. Over half a million fewer children in relative low income. 300,000 fewer children in workless households. For the first time ever, over half of lone parents in work with over 1 million new childcare places benefiting over 1.8 million children.

And the UK now has highest employment rate of the major industrialised countries with 1.9 million more people in work and long-term youth unemployment – a particular scourge – virtually eradicated.

But the report also focuses our minds on what more needs to be done – the challenges still ahead. One of these is to remove the road blocks to opportunity at regional and national level.

On Monday, I called for us as a Government to fight poverty on a street by street basis and to ensure that we target help to the areas which need it most.

But breaking down barriers – particularly barriers to employment –- at a regional level takes more than Government acting on its own.

In the context of tackling poverty, we need to break the cycle that allows poor children to mature into low paid workers and retire to become poor pensioners.

Nationally, unemployment is the main reason for poverty among people of working age, for children growing up in poverty and for poverty in retirement. Paid work helps families and individuals and improves life chances for children. It also enables people to build security for their future retirement. Work is the best escape route from poverty – it is the best “benefit” we could bestow.

Our priority is to empower people to take up the opportunities of work, giving people the support they need to find employment and develop their skills, and creating employment opportunity for all.

So leading the drive to get people into work is a huge aspect of what my new job is all about.

It means breaking down the physical and discriminatory barriers which prevent people from working – especially those suffering health conditions, especially ethnic minorities, disabled people and older workers.

And it means giving people the skills to meet the demands of employers, so that they are trained and ready for work – and also, crucially, working with employers to ensure that this training doesn’t stop at the factory door – that employees continue to be trained and developed during their careers.

I would like to say a bit more about each of these in the context of our economic success but also in the context of tackling poverty.

This week’s latest employment figures show continued progress, not just on unemployment, but also on economic inactivity. Over the last year, the number claiming each of the main out-of-work benefits is down. Unemployment is down by nearly 100,000 and the numbers on incapacity benefits have now peaked and are actually 4000 lower than a year ago. A tiny fall – but the first fall for years.

Between 1979 and 1997, the numbers on incapacity benefit tripled. Had that trend continued today there would be around 4 million people now on incapacity benefit instead of 2.7 million.

Nine out of ten people who start claiming incapacity benefits want, and expect, to go back into employment. What’s more, their aspiration of a return to work is a real possibility for most if the right help and support is offered to them early in their claim.

Statistics show that once someone has been on Incapacity Benefit for 1 year, they are likely to be stuck there for on average 8 years. Once they’ve been on it for 2 years, they are more likely to die or retire than leave the benefit for a job.

We are currently testing out reforms in pilot areas, seeking to offer this early support. Our “Pathways to Work” pilots are not about forcing sick people into jobs. We recognise that those with the most severe conditions may never be able to work and we will ensure that incapacity benefits continue to provide vital support for this group.

Our analysis and policy development is instead designed to enable people to overcome obstacles to work.

It seeks to enable them to become and remain independent and enjoy the personal, social and financial benefits that come from having a job.

As a Government we are working with disabled people to realise their own ambitions and challenge the dogma that people with health conditions are incapable of doing any work. And we are changing the messages about what it means to be on incapacity benefits so that people coming onto those benefits will be actively and repeatedly encouraged to think about how they can plan a return to work and have the support they need in order to do so.

But finding ways to overcome physical barriers is only part of the challenge.

A crucial barrier facing some people – particularly many disabled people – is discrimination. Since 1997 we’ve been transforming disability rights, and this October we will extend full discrimination protection to 600,000 existing disabled workers and 7 million jobs.

The New Deal for Disabled People and our other New Deal Programmes have helped over 180,000 disabled people into work. And between spring 1998 and 2003, the employment rate of disabled people has increased from 43.5% to 49.1%. So we are approaching the point where old preconceptions will be challenged by the stark fact that most disabled people are actually in work.

Our Age Discrimination legislation is also important in breaking down barriers that prevent older people from working. Combined with other measures in the Pensions Bill, such as voluntary State Pension Deferral, we are breaking the cliff-edge between work and retirement.

But opening up opportunities to work throughout life will only be successful if people have the skills that employers need and if they are continually stretched and developed throughout their careers.

We launched our Skills Strategy in July 2003. It set out our programme to tackle the skills gap between the UK and its main economic competitors. It commits the Government and its partners to a radical strategy of demand-led provision of skills:

We want these partnerships to link the needs of regional economies with the skills of the people who live and work in these areas and I am delighted that Yorkshire and Humber are taking the lead on this Partnership initiative.

So engaging with the needs of employers is central. Jobcentre Plus seeks to engage effectively with employers as customers and the employer engagement strategy supports our welfare to work mission by guiding the development and support of individual customers to meet employers’ requirements.

The New Deal has helped over 3500 people into work in my constituency alone. And between October 2001 and the end of August this year, the Kingston upon Hill Action Team helped 1536 disadvantaged people into work.

We have recognised that some groups of people are more likely to face relative disadvantage in the labour market, so we have set PSA targets to raise employment rates and reduce employment gaps for a range of groups including those with low or no skills, disabled people, lone parents, ethnic minorities and people aged 50 or over.

A lack of basic skills significantly increases the probability that an individual will be unemployed or economically inactive. So Jobcentre Plus has appointed a basic skills co-ordinator in each of its 90 Districts.

We announced the New Deal for Skills in the Budget last March. This will build on the Skills Strategy to improve support for the low-skilled, particularly those moving from welfare to work, inactive benefit recipients and jobseekers for whom a lack of skills is the principal barrier preventing a return to the labour market.

It will improve the support to the low-skilled by creating a new intensive skills coaching service, co-located with Jobcentre Plus where possible.

It will improve the mechanisms of financial support for those whom longer duration training provides a route back to work. And it will investigate how to build on the Employer Training Pilots and look at developing skills passports to help make the move from welfare into sustainable work easier, to make individual entitlements more tangible, build a record of skills and competences gained and to help transfer skills between jobs.

In the past Jobcentres were only really for those classified as unemployed. That meant writing off other inactive people who wanted to work and so could benefit from doing so.

The new Jobcentre Plus Offices – the roll-out of which will be completed in Hull and East Riding by the end of March 2006 – are really transforming this. They’ll provide the same high quality support to people regardless of the benefit they happen to be on.

The Skills Strategy provides greater incentives to employers – giving them a voice and real influence. But we must ensure that voice is heard by colleges and other providers.

Efforts have been made to meet the skill needs of employers, so that training is delivered where, when and how they want to get it.

The Humber Employment Framework is playing a leading role in driving this agenda forward.

Work-related learning is the most effective way of increasing the status of vocational training, which has for too long in this country suffered from not having the same status – certainly as compared with academic qualifications.

So we’ve been taking active steps to develop a network of high quality Centres of Vocational Excellence across England to meet a whole range of employers' needs at every level.

Half of England’s colleges now have such a Centre of Vocational Excellence – and I’m particularly pleased that Hull College has achieved this status in its Construction and Food Technology departments.

It was particularly encouraging that Hull College received the very first Learning and Skills Council Beacon Award for College Engagement with Employers. This national accreditation for the college puts Hull on the map for teaching and learning excellence in this field.

Feedback from employers tells us that they want to be taking the lead when it comes to developing training for their particular business.

Our Employer Training Pilots provide a package of financial support measures to improve access to training and enable employees to attain basic and NVQ level 2 skills.

I would just like to say a word about Trade Unions and their Union Learning Representatives – who have a valuable role to play. In the last year, the Union Learning Fund helped to encourage over 25,000 workers back into learning.

Over 3500 new Union Learning Representatives were trained this year – in this year alone there are around 1050 helping to bring learning to their members and raising the level of employability overall.

Lifelong learning is at the heart of the European framework. Lisbon set the strategic goal for more and better jobs and greater social cohesion. It also identified the development of skills and lifelong learning as key elements and the progress we have made in delivering the Skills strategy will feature prominently in this year’s National Action Plan.

We welcome the important contribution that the European Social Fund is making to our national policies to promote employment opportunities for all and to increase skills levels. The Fund mirrors a number of features of the Skills Strategy – giving priority to the long-term unemployed, as well as those lacking basic skills and qualifications.

Yorkshire and Humber appreciates the £450 million which the European Social Fund has targeted on the region in 2000–-06. Over 100,000 people have already benefited from the regeneration programmes this funding has facilitated.

Our vision for breaking down barriers to work is crucially dependent on a skilled workforce – where communities are flourishing and helping drive local regeneration. We are bringing real change to this country – we are bringing real change to Hull and the Humber – the opportunities and support that will benefit all our citizens, regardless of their background or their circumstances.

We need to do this is in partnership and this forum is an excellent opportunity to forge this partnership ever more closely.

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