18 July 2007

The Rt Hon Peter Hain MP
Secretary of State for Work and Pensions

Statement

Full Employment

Wednesday 18th July 2007

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With permission Mr Speaker, I should like to make a statement on today’s Green Paper on the next steps to full employment.

Mr Speaker, ten years of progress under this Government have transformed work and opportunity in Britain.

The longest and most sustained period of economic growth for over two hundred years; the fastest falling child poverty in Europe; and the highest employment in our history.

Today, the achievement of full employment and the eradication of child poverty are no longer seen as simply aspirational rallying calls – but as real targets that people expect to be delivered for our generation.

But to achieve them – especially at a time when the global forces of economic and demographic change present new and ever greater challenges for our economy and labour market – requires a step change in our reforms.
 
We must re-ignite the jobs crusade that started in 1997 and renew the partnership between Government, employers and individuals by focusing now on those who remain furthest from the labour market and whose potential is untapped.

The three million people of working age who have been on benefit for over a year; many on incapacity benefits.

The lone parents and ethnic minority groups still without the right support to work; the 16 and 17 year olds not in education, employment or training; and those remaining pockets of poverty and worklessness concentrated in some of our major cities yet often close to thriving labour markets and great prosperity.

Mr Speaker, I said that we need a step change to tackle these entrenched problems and today’s Green Paper delivers it, based as it is on values and principles that go back to Beveridge and Atlee, and on to our New Deal. The belief in equality and opportunity; in rights and responsibilities. The principle of work for those who can and support for those who can’t; of partnership with employers – that an active, progressive welfare system should provide people with the skills employers need to fill some of the 600,000 vacancies that come up in our labour market each month.

These reforms will build on our progress with the national roll-out of Pathways to Work.

They will see the development of support that is ever more personalised and responsive to the needs of individuals.

They will focus on job retention and progression, not just on job entry.

And they will devolve power to local areas by incentivising local solutions and making the best possible use of expertise across the public, private and voluntary sectors.

We propose, first and foremost – a renewed partnership with employers to ensure those on welfare applying for jobs have both the skills and the work attitudes that employers need underpinned by a new jobs pledge aimed at finding job opportunities for 250,000 people currently on benefit.

Building on the cutting edge Local Employment Partnerships announced by my Rt Hon Friend the Prime Minister in the Budget earlier this year, major employers – in both the public and the private sectors – have given a commitment to offer guaranteed job interviews for people who have been on benefit and who are ready and prepared to work.

Employers will ensure that they can compete more effectively for vacancies and have the support then to progress within the workplace, adding to last month’s Employer Skills Pledge in which 150 leading employers made a public and voluntary commitment to train all their staff to level 2 in the workplace.

But this will be a two-way process and, through these new Local Employer Partnerships, individuals on benefit will be expected to do all they can to help themselves prepare for work.

Our second area for reform will be to introduce a more personalised, flexible and responsive New Deal with a more integrated approach to skills and wider support for the family - but matched by new responsibities for jobseekers to do all they can to help themselves.

Those facing particularly severe barriers to work will now get fast-tracked help. While others who have a history of long-term benefit dependency could face tougher responsibilities from the start of their claim.

There will be an earlier and more focused assessment of the skills needs of those out of work to inform the development of a back to work plan. But agreed activities will be mandatory with clear sanctions for failure to comply.

Mr Speaker, eradicating child poverty lies at the heart of this Green Paper. Following the recommendations of Lisa Harker’s report last year, we are already changing Jobcentre Plus systems and targets to ensure that the delivery of our employment programmes is more family focused. We are introducing mandatory work-focused interviews every six months for partners of Jobseeker’s Allowance recipients with children. Because, as with lone parents, work offers a powerful route out of poverty for many of these families.

For lone parents themselves, we will introduce a new social contract which promotes the value of work as the best route to tackle child poverty.

We know 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; and three times more likely to be in poverty than children of lone parents in part-time work.

With our record investment in improving the quality and supply of childcare together with measures to ensure that work pays, lone parents will be expected to make an eventual move into the labour market in return for new and more personalised support.

From October next year, lone parents with a youngest child aged 12 and over will no longer be entitled to Income Support simply because they are a lone parent. Instead, supported by the new job opportunities made available by the Local Employment Partnerships, they will be eligible to claim Jobseeker’s Allowance where they would be expected to look for suitable work in return for personalised help and support.

And because we are serious about tackling child poverty, we intend that this age will be reduced further to 7 from October 2010, backed up by the local availability of high-quality wrap-around childcare.

Finally, Mr Speaker, building on the Freud Report, this Green Paper makes greater use of expertise across the private, public and voluntary sectors at both national and local level.

Private and voluntary sector providers already play a crucial role in delivering programmes such as Employment Zones and the New Deal. And we intend to build on this.

After 12 months on Jobseeker’s Allowance – or in some cases possibly even sooner - we will move customers to a specialist return to work provider who will offer an intensive outcome-focused service, funded on the basis of results.

We will push forwards with a City Strategy offering local consortia of providers new funding and flexibilities in return for outcome based payments.

And we will pilot an approach where providers who are successful in moving people into sustained employment are rewarded with increased funds to invest in further activity.

Mr Speaker, the publication of our proposals today will start a 3-month consultation process. We encourage contributions from all sides of this House; and from all those who share our commitment to delivering full employment in Britain.

Mr Speaker, the contrast with 1997 could not be greater. Then record unemployment. And the worst child poverty in Europe.

Today 2.6 million more people in jobs. More women, more lone parents and more disabled people in work than ever before. And already 600,000 children lifted out of poverty.

But we must now rise to the challenge of going further.

This Green Paper lays the foundation for the eradication of child poverty; it builds on the progress we have made in extending the right to work to all, and – in reaching out to the hardest to help – it aims to offer true social mobility and social justice for every individual.

I commend it to the House.