9 May 2007

The Rt Hon John Hutton MP

Secretary of State for Work and Pensions

C2E - Fair Employment Conference

Wednesday, 9th May 2007

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The right to work; and the right to equal treatment within the workplace are fundamental to any decent modern society.

They were the foundation upon which the trade union movement led the fight to improve pay and conditions.

They have been the cornerstone of welfare reform from the pioneering Beveridge and Atlee to the present day.

And it is by ensuring that these rights can be exercised - in a Britain that is changing more rapidly and profoundly than at any point since the industrial revolution - that we can help our economy and our society prosper in the future.

In the last ten years we have made real progress.

The creation of one of the most far-reaching programmes of disability rights legislation that any European country has put in place.

Record investment in Jobcentre Plus and the New Deal.

New rights to request flexible working; a major extension of paid maternity and paternity leave; and over half a million new childcare places – helping parents to balance the modern demands of work and family life.

Today there are people in work than ever before, with the biggest increases in the areas that started in the poorest position. Long term unemployment close to a 30-year low. Long term youth unemployment now virtually eradicated. And 600,000 fewer children living in relative poverty.

The incomes of the poorest in Britain are now rising faster than those at the top. A marriage of social justice and economic dynamism. Of a strong economy and a strong society.

Since 1997, we’ve increased the employment rate for many previously disadvantaged groups. Lone parents – up 11 percentage points. Disabled people – up 9 percentage points. Older workers – up 7 percentage points. Ethnic minorities – up over 4 percentage points.

But we know there are still problems.

The employment rate gap between ethnic minorities and the UK as a whole, still stands at around 14%. And on current trends, a young British Asian woman starting out in work today, will have to wait until her retirement before she can expect to see the employment rate for ethnic minorities at the same level as the UK average.

This is not just unacceptable for our society; it is unsustainable for our economy; and for the continued success of British business.

In London over the next 20 years, ethnic minorities are expected to account for around three-quarters of the growth in the potential workforce. And this at a time when the ratio of those of working age to those of retirement age is set to halve in less than fifty years.

So it is not my argument today that every problem has been solved and that every injustice has been put right. We know that neither are true.

My argument today is rather that we have the opportunity to build on the progress we’ve made and to continue our path towards a fairer and more equal society.

Last week’s Joseph Rowntree Foundation reports suggested that some 40% of people from ethnic minority backgrounds are living in poverty – twice as high as for White people. We know that disabled people are more likely to be in poverty than non-disabled people; with a quarter of all children in poverty having long-term sick or disabled parents. And that children of lone parents not in work are over five times more likely to be in poverty than children of lone parents in full time employment.

We argue that work is the best route out of poverty.  Yet around half of the children living in poverty in Britain today are in households where an adult is already in work - couple families who do not work enough hours or earn enough to escape poverty.

The Women and Work Commission found a gender pay gap of 13% between the median earnings of men and women working full time; and a gap of over 40% in the median hourly rate for women working part time compared with full-time men.

Without fair employment there will be no route out of poverty today; and no workforce that will enable British business to succeed in the ever more competitive global marketplace of tomorrow.

If we are to meet these remaining challenges, then I believe we need to take action in three key areas.

Firstly, we must make sure we have the right support for families. To give people the flexibility and support to combine their responsibilities as parents with their responsibilities in the workplace. Parents in every community face these competing pressures. We can not make progress in fair employment without supporting the family.

Secondly we must place more emphasis in our welfare policies on those who are furthest away from the labour market.

And thirdly we must continue to work towards removing all forms of discrimination and unfair practice from within the workplace.

I’d like to say a few words about each of these in turn.

First, the family.

For all of us who are privileged enough to be parents, bringing up a child is the single most important thing that we will do in our lives.

One of the most critical questions we must debate over the coming weeks and months is what more we can do to support strong and stable families.

The pace and shape of the modern work place has increased the pressure on family life. The extended family has been stretched as people move from one end of the country to the other – if not abroad - to work and develop their career and lives. Modern family life can be a struggle. It is not easy.

So public policy must be explicitly pro-family if we are to succeed as a nation in the years ahead, and if we are to give families the help they need to succeed.

We must continue to be the champion of all families. Let’s be clear, the increased support the Government has given to lone parents through tax credits, increased child benefit and the New Deal for Lone Parents has been absolutely right; and we must look to see what more we can do to help lone parents into work and out of poverty.

A credible family policy can not be built on prejudice – or outdated stereotypes. It is not about stigmatising lone parents or clinging to a limited view of the family that flies in the face of the enormous social and cultural changes that have occurred in our society.

That was the old debate – based on a prescriptive interpretation of the role of women in society and the illegitimacy of same sex relationships. Our modern society is a more diverse, tolerant community and it is right that this should be reflected in our laws and policies.

But in winning the argument for equality in our society and tackling discrimination head on, we can not afford to be ambivalent about the role of the family.

We know that the biggest determinants of childrens’ outcomes are parental income, parental time and the stability of relationships. Couples, because there are two parents rather than one, are usually able to give their children more time and money.

And marriage, because of the public commitment, often helps to provide greater stability. In the first three years of a child’s life, married couples are half as likely to split up as non-married couples.

Children living in lone parent households are almost twice as likely to be in the bottom 40% of the household income distribution compared with two parent households. They have a consistently lower probability of moving out of poverty over time. And they are more likely to perform less well at school; to become unemployed, homeless or offenders; and to divorce or dissolve cohabiting unions.

So we can not afford to be neutral on family structure. Lone parenthood is not a lifestyle choice. And there is no moral judgement involved in acknowledging there is clear evidence that children tend to do best in two parent families. These are just the facts.

But what it does mean is that we should do all we can to help couples stay together and to support their children.

Supporting more part-time and flexible working will be crucial. We must increase support in the workplace for mothers who want to get on at work but often find it difficult to overcome outdated thinking on the type and hours of work mothers should do.

More than 100 companies and organisations have now signed up to the Exemplar Employer initiative which includes projects such as working with schools to inform girls about careers and supporting mothers returning from work. We are also providing support for employers with specialist advice on creating and retaining more quality roles on a part-time and flexible basis in their organisation. Such projects can play a crucial role in helping lone parents in particular, to make the transition back to work.

In my Department, we are rebalancing our employment programmes so that all families can get the kind of support that may previously only have been available to lone parents. But doing more to support families goes right across Government. We should be prepared to make supporting family life central to all our policies – and be bold in discussing new solutions.

One thing of which I am certain, however, is that it is patronising to mothers and fathers across Britain to suggest that they will decide whether to stay with their partner purely based on whether they get a tax break from Government or qualify for the single person’s rate of benefit.

When the married couples’ tax allowance was in place during the 1980s and 1990s, divorce rates went through the roof.

Where Government can help is in making family life more manageable.

We must continue to invest in childcare and looking further at the support available for some of the most disadvantaged and problematic families – where children are at risk of being brought into care, or the family evicted for disruptive or anti-social behaviour. Family Intervention Projects – from parenting classes and help with drug or alcohol abuse to the 24-hour supervision and adapted accommodation pioneered in the Dundee project -can make a real difference for the families and communities involved.

Secondly, welfare reform.  

I recently asked David Freud to review our welfare system as part of the wider policy review process led by the Prime Minister.

Freud proposed that once claimants have been supported by Jobcentre Plus for a period of time, back to work support should be delivered through outcome-based, contracted support – drawing on the innovation of specialist providers from the private and voluntary sectors. Payments to providers would be made over a three year period, with contracts offering rewards that are proportionate to the value to society and the taxpayer of moving into work.

For the hardest to help – this means outcome-based funding that places a higher priority on these groups; that offers providers greater rewards for helping those who are furthest from the labour market. Not regarding benefits like the new Employment and Support Allowance as some kind of disability pension – but providing the support that can make it a real bridge to work. And not just overcoming the barriers to finding work and then pulling up the drawbridge of support; but rather overcoming the barriers to staying in work and progressing within the workplace too.

Local flexibility and freedoms will also be crucial. The City Strategy brings together a consortia of local stakeholders to improve the co-ordination and delivery of support for jobless people in key areas across the country.

We believe that by freeing resources from Whitehall and giving power and responsibility to local communities, we will achieve better outcomes for local people. But this has to translate into results. And in many City Consortia areas that has to mean better employment outcomes for ethnic minorities.

Through this partnership-based approach, together with improvements in training and skills – such as the increased emphasis on English language training for benefit recipients we announced earlier this year – I believe that we can offer new and unparalleled support to help people from ethnic minorities acquire the skills and expertise to realise their ambitions in the workplace.

But employer engagement will also be key to the success of this approach.

We have already seen encouraging progress with our Fair Cities Pilots – in Bradford, Birmingham and Brent. We’ve still got a long way to go but the lessons being learnt, the local networks being established, and the process improvements we now believe we can make – can give us optimism that as we develop our welfare reforms further, particularly through the City Strategy, we can deliver people with the skills that employers need.

That is the true test of welfare. The business role in this progress will be crucial – but it can not be about charity; it has to be about economics.

Thirdly – and finally - we need to go further in helping employers tackle discrimination within the workplace.

Analysis suggests that potentially up to half of the ethnic minority employment gap can be explained by employer behaviour.

Later this Summer the Business Commission will make recommendations as to how business itself should change their recruitment and promotion practices. 

Race inequality is therefore a shared challenge for both business and Government. Government must lead from the front and ask those supplying Government to adopt the same principles. Business too must respond.

But we should be absolutely clear about one thing. This is not about positive discrimination or quotas. But we must not make the mistake of seeing this only as a cost to business. It is, in truth, about the increasingly crucial value that promoting equality brings to business.

We must go further in changing the way we address equality issues across Government. Replacing the silos of individual departments with a new cross-Government commitment that better co-ordinates action on equality issues.

Through the Discrimination Law Review we are seeking to achieve a simpler and more streamlined legislative framework – bringing together the whole of discrimination law – some nine major pieces of legislation and around 100 pieces of ancillary legislation – to put it on a more consistent and coherent basis.

But tackling disadvantage in the workplace is not just about legislation or burdens on business.

Ultimately tackling discrimination and achieving truly fair employment, goes beyond legislation and basic civil rights.

It’s about our culture and the way we interact with each other; about recognition and respect for all.

It requires business and Government to work together. To be flexible and supportive in helping people to balance the modern demands of work and family life.

To design welfare and training programmes that deliver people with the skills and competencies employers need.

And to break the glass ceiling that still too often prevents women and ethnic minorities from reaching their potential in the workplace.

I believe we can do this. We have the benefit of over 30 years of experience of tackling inequality in the workplace. And organisations like C2E are playing a crucial role in helping businesses to share best practice and improve their understanding and cultural awareness; not just to stay within the law but to properly utilise the skills and talents of their entire workforce.

Our response must be to ensure that that the next generation does not experience the disadvantage and discrimination that their parents and grandparents faced.

We have a shared will; a shared understanding of how to do this. Government will continue to do all it can to support the efforts of good employers and all those who share this commitment.

Above all, through fair employment I believe we can deliver a Britain where hope and aspiration are equally distributed, not distorted by the prejudices of the past. A Britain where no-one is excluded or left behind – and where the right to work and the right to equal treatment in the workplace are no longer the defining notions of a struggle for equality but the hallmarks of a fair and equal society.