28 January 2004

Rt Hon Andrew Smith MP
Secretary of State for Work and Pensions

Daycare Trust/ TUC Conference

Women, child poverty, childcare – making the links

Monday, 26 January 2004

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Good morning. I’m very pleased to be here and have the opportunity to talk with you today.

As we all know society is changing – the family is no longer defined by male breadwinners/ women homemakers.

There are more women in work now than ever before. In the last 6 years, close to an extra 1 million women have joined the workforce – in some cases they are lone parents or the sole earner, in most cases they are one half of a dual earning household.

But there is still a significant gap in employment rates between men and women. As well as between female lone parents and partnered women.

Today I want to talk to you about what the Government is doing to remove barriers to work – and cover the points raised in the discussion paper published today.

I am pleased to see that it picks up the themes that we first highlighted in last year’s 2003 Opportunity for All report – namely large families, disabled people and people from ethnic minorities.

Our analysis showed that these groups face additional barriers to work, that mean they are more likely to suffer poverty.

Policies such as Pathways to work for people with disabilities, and the increases to Child Tax Credit announced in the Pre-Budget Report, (targeted so large families see a greater gain) will help reduce barriers.

Our strategy for eradicating child poverty will continue to evolve in line with the best evidence of what works. And – as I said in Opportunity for All – I am always happy to hear what that might be, from whatever source.

So I will leave time at the end of my remarks for questions and comments.

Our vision is for a fair and just society, where everybody has the opportunity to do the best they can for themselves and their families.

We believe in a work first approach because work matters – it gives people a stake, it provides them with a sense of self-esteem – it binds communities together, and it is the platform from which we can build a future for our children and, indeed for pension provision for our old age.

We want to help remove the barriers for those who want to move into work, as well as making sure that those who want to continue working are able to do so - because we know that getting a job is the best and surest way of lifting families out of poverty.

If we go back to 1997, before the start of the New Deals, we inherited a situation where Britain had one of the worst records on child poverty in Europe.

1 in 3 children were growing up in low-income households. And the children of lone parents were more than twice as likely to suffer long-term poverty compared with others.

In the last six years we have made a good deal of progress.

Despite the downturn in the world economy, employment in the UK has continued to grow – we now have more people in jobs than ever before. And – for the first time in nearly half a century - the highest employment rate and lowest unemployment rate of the major industrialised countries.

And there are now at least half a million fewer children living in low income poverty than in 1997.

I cannot stress enough how crucially important it is that we continue to make progress – to help more lone parents help themselves and their children to have a better quality of life.

While some women will choose not to work – there are many who would like to work/ or at least have the choice of combining paid work with the vital job of being a parent.

Indeed estimates show that there are still around half a million lone parents who want to work but are held back by key obstacles like lack of affordable childcare or a lack of confidence in the skills they have to offer an employer.

Since 1997 we have been working hard to breakdown the barriers and make it easier for women with children to stay in work.

We have done this by transforming the welfare system into an active system that helps people to become independent and move into work where they can, by making work pay and by removing barriers to work to make work possible.

Let me take each of these in turn.

First, we have transformed the welfare system and moved away from the old approach where we passively handed out benefit payments.

And our approach is working.

Through our investment in the New Deal and Jobcentre Plus we have tackled the legacy of mass unemployment. Long term unemployment, particularly among young people, has been slashed.

The New Deal for Lone Parents has been a particular success. More than half of all lone parents are now in work – and as a result of the measures we’ve put in place nearly 400,000 children will have a better start in life.

We have also put policies in place – such as the National Minimum Wage - to make sure that work pays.

In addition, some 5.9 million families are now benefiting from the new tax credits – the Working Tax Credit and the Child Tax Credit.

In practice – this means that a single earner family on around half average earnings with two young children is, from April 2004 £3,750 a year better off in real terms than in 1997.

On top of this, from this October, lone parents in a number of pilot areas, who move into work, will have their wages topped up by £40 a week for a year.

And third, we are making work possible by tackling the barriers different individuals face to moving into and staying in work.

We are taking action to support parents balance their work and family lives – such as;

But one of the biggest barriers remains access to good, affordable childcare.

Since 1997 we have created more than 800,000 new childcare places, benefiting well over 1.4 million children.

But we recognise we need to do more.

Childcare is essential for parents to be able to work, learn and train. This is good not just for individuals, but also business – improving staff morale and work performance.

In December’s pre-Budget Report, the Chancellor announced a series of measures to encourage businesses to support good quality childcare for their employees’ children. For example, they will be able to provide childcare vouchers to staff – free of tax and National Insurance – worth up to £50 per week.

For people who find work through the New Deal for Lone Parents, we will offer free childcare in the week before they start work – and for lone parents in 12 pilot areas childcare will be free for the entire time they are looking for work.

The Government believes that for childcare to work for those who need it – it needs to be based on partnership working and organised at a local level, taking account of local needs.

The success of Sure Start and its range of programmes shows that.

To build on this success, from this April we will offer school based childcare in three areas. Making use of facilities in the community we will work with local authorities to make sure that school buildings do not stand empty after hours and in the school holidays.

We will offer more parents a chance to work – safe in the knowledge that they have good childcare for their children available 7 to 7, 50 weeks a year.

The pilots will take place in Bradford, Haringey and Lewisham – areas with disproportionately high numbers of lone parents.

These pilots will be run by the local councils, who are working closely with local partner organisations to make sure that the childcare provided meets the needs of the local community.

And to make sure that lone parents are offered a comprehensive package of support Jobcentre Plus will work closely with the pilots and provide extra work-search support.

I recently visited Bradford and saw at first hand how the pilot has been a catalyst for the Council and Jobcentre Plus to improve the way they work together and help lone parents access the support they need across the full range of services.

And today, I can tell you that we will be working with devolved administrations to set up further pilot areas in Scotland and Wales.

I can also announce today that in all three pilot areas, from this April onwards, we will be introducing free childcare ‘tasters’ for low-income parents – with the aim of building trust and confidence in using formal childcare, as a first step to moving back to work.

Conclusion

So, to conclude my remarks today it is the Government’s ambition to overcome the many barriers that parents face in getting back to work. That means making sure work pays, taking steps to give people the confidence they need, and – above all – improving childcare.

That’s why we raise all these issues in the big conversation so that we can get people’s views about how we move forward on this important agenda.

I look forward to continuing to work closely with all of you to realise our vision of every parent who wants to work having access to affordable childcare when they need it.

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