23 November 2004

The Rt Hon Alan Johnson MP

Secretary of State for Work and Pensions

Ethnic Minority Employment Task Force Launch

Tuesday, 23 November 2004

(CHECK AGAINST DELIVERY)

It’s a great pleasure to be here this morning to open this event and to launch the Year 1 Progress Report.

Over the past seven years welfare to work policies have driven a transformation in the UK’s employment market.

Unemployment at is now at its lowest level for 30 years with Long-term Youth Unemployment virtually eradicated. And we have the highest employment rate of the major industrialised nations.

The New Deal has helped over 1 million people back into work. And we’ve worked hard to break down barriers obstructing the employment of ethnic minorities.

Last year we set a 10-year goal: That no-one should be disadvantaged in their employment prospects because of their ethnicity.

One year on, and we are significantly closer to our objective.

But despite this progress, ethnic minorities are still twice as likely to be unemployed and 1.5 times as likely to be economically inactive as the overall working age population.

It’s not just in securing employment that this differential exists. Ethnic minority staff earn an average of 7% less than white staff. And this in itself masks wide variations within ethnic minorities. For some groups – such as Bangladeshis – the average salary is as much as £7000 a year lower than the average for white employees.

Whether it’s because of direct discrimination or, more often, because people don’t have the necessary skills – or because they don’t have the right support to find work and to advance in the workplace – as a society we simply can’t afford to allow these barriers to opportunity to prevent people from realising their potential.

Work can bring a sense of fulfilment – it is the best route out of poverty. Being out of work – or even being unfairly treated at work – can depreciate skills and confidence, increase stress levels and decrease people’s sense of self-worth.

The major result of low employment for ethnic minorities is relative poverty. In Great Britain in 2002/03, 17% of all individuals lived in households with relative low income – but 59% of individuals in households with a Pakistani or Bangladeshi head were below the same low income threshold.

And there is evidence that this shows itself geographically too, with ethnic minority populations being more likely to live in disadvantaged areas.

My first act as the new Secretary of State was to launch this year’s “Opportunity for All” Report – and its call for us to tackle poverty at street level.

Ending disadvantage for ethnic minorities in the workplace is crucial to achieving this. And it’s perhaps never been more important for our society.

Britain’s diversity is one of its greatest strengths. But it’s only a strength because it balances integration with diversity. Maintaining this strength means preventing the isolation of ethnic groups – particularly at a time when there are sinister forces in the world seeking to divide people on grounds of race and religion.

If we can tackle inequality of opportunity, our diversity will drive ever greater social cohesion and build a Britain where each individual feels valued in a multi-cultural community.

What’s more, if we can tackle inequality of opportunity, our diversity will bring economic benefits.

Ethnic minorities will account for 50% of the growth of the working age population over the next 10 years. Our ability to meet the challenges of an ageing population – for example our future pensions provision – will be crucially dependent on the way that we engage ethnic minority people in the workforce.

This is the challenge but also the opportunity that we face. Government can provide a lead – but can not act alone.

I’m delighted that later this morning the CBI and TUC will be making their Joint Statement on Ethnic Minority Under-employment.

It recognises the direct business benefits that companies can enjoy by ensuring access to the widest possible pool of talent and customers - and by building a positive culture in the workplace making prejudice and discrimination unacceptable.

The Ethnic Minority Employment Task Force – in which the CBI and TUC, along with the CRE, play leading roles – is a cutting-edge example of partnership. It’s the first cross-Whitehall strategy of its kind – with five Ministers from five departments working together, across traditional boundaries, to deliver one objective.

All of us must continue to work together to drive progress – in particular in the three areas highlighted by today’s report:

I’d like to say just a few words about each.

Building employability

As a former Minister for Lifelong Learning I am a passionate believer in the importance of skills in helping disadvantaged people get decent jobs.

The early work of the Task Force has focussed on education in schools. We know that, for example, black Caribbean boys have by far the lowest attainment at GCSE level.

So the “Aiming High” Strategy plays an important role in targeting support to some 30 schools nationwide, offering guidance from experts in African and Caribbean issues to help raise educational attainment.

And the new Ofsted inspection framework will ensure that schools which consistently fail their ethnic minority pupils are highlighted.

We know that all Ethnic Minorities Groups on average experience lower returns to higher education than whites – with, for example, Pakistani, Bangladeshi and Black African university graduates having unemployment rates that are double those of their white counterparts.

So we need to encourage employers to make the best use of Ethnic Minority graduates.

Individuals with low levels of basic skills are up to 5 times more likely to be unemployed than the overall population. Over 50% of lone parents and 40% of individuals on Incapacity Benefit have no qualifications at all. An additional 300,000 have English language problems that prevent them finding or keeping work. And almost 2/3 of these individuals are on benefit.

We need the Task Force to ensure that our skills policies and programmes – such as the National Skills Strategy and the New Deal for Skills – fully address the needs of ethnic minorities.

And we need employers to invest in the development of all their staff – paying attention to the specific needs which people from ethnic minorities may have.

Connecting people to work

We also need employers to continue to work with Jobcentre Plus to ensure that it produces individuals who meet their needs.

The New Deal for Young People was the first employment programme which actively promoted equality of opportunity and outcome for ethnic minority young people. And the New Deal programmes have so far helped more than 125,000 people from ethnic minorities into work.

But we have gone further in building on and adding value to our mainstream employment programmes to tailor them to the specific needs of ethnic minorities.

Building on New Deal incorporated a greater deal of flexibility and targeting into our welfare to work strategy while our Ethnic Minority Outreach initiative – which works with community and voluntary groups to find innovative ways to engage with ethnic minority people, and connect them to work – is teaching us valuable lessons.

Outreach has been particularly successful in reaching groups that are not normally engaged with Jobcentre Plus, especially women from certain Ethnic Minority groups and in extending Jobcentre Plus’ services to disadvantaged groups.

But we know that we can do more to reach those people who are not at the moment either in work or seeking work.

So, over the coming year, we will be looking to find further and better ways to reach people who are out of the employment help loop.

One such exciting project is Fair Cities. This is based on the matching of local labour market demand and supply through a “deal” between employers and the local employment and skills systems – where jobs are offered for qualified candidates. It offers a new paradigm for the future with top business executives working in partnership with political and community leaders.

Another challenge is to improve public services in disadvantaged areas where ethnic minorities are often concentrated.

Poor transport, housing or childcare arrangements can be difficult barriers for Ethnic Minorities to overcome without support.

The Government’s new childcare proposals will help make a difference, including pre and post school childcare for all primary school pupils by 2010; Sure Start children’s centres in the poorest 20% of wards by 2008; and a £50-a-week tax break for parents using childcare provided by an employer.

Promoting equal opportunities in the workplace

One of the Task Force’s key achievements in building equal opportunities in the workplace has been its work on the use of procurement as a lever to promote race equality.

But the Task Force will be going beyond this by seeking to ensure that current guidance for procurement within Government is strengthened into a practical framework.

The Commission for Racial Equality has been working with us – revising its Code of Practice in Employment to provide updated and accessible advice to employers, Employment Tribunals and the public on steps that should be taken to meet the requirements of the Race Relations Act. And to provide advice for small businesses – launching a CD-ROM guide specifically for businesses employing fewer than 250 people.

As we seek to engage business in breaking down the barriers that prevent the employment and fair treatment of ethnic minority people, the Task Force’s work with the TUC and CBI must add value to the case for business to take on a leadership role.

It is only through such initiatives that we can take the next steps in closing the employment gap, open up greater opportunity for progression and pay and make a reality of true opportunity for all.

With 1/3 of ethnic minorities of working age currently economically inactive – the failure to meet this challenge could threaten the future sustainability of our welfare system and future economic success of British business.

But the success which is within our grasp will ensure that Britain remains a world leader – not just economically – but as a racially integrated and socially cohesive society, which is all the richer for its cultural diversity.

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