31 March 2008
Rt Hon Stephen Timms MP
Minister of State for Employment and Welfare Reform
Ready for Work: Capita Welfare Reform Conference
Guoman Tower, St Katherine’s Way
Monday, 31st March 2008
[Check against delivery]
I am delighted to be here and to be able to welcome so many to this event. I hope it provides a really valuable opportunity to debate the changes in the welfare system and to help influence them. I was appointed to this job in January, and I’m relishing the chance to contribute to this most important area of policy development and reform – right at the heart of our task of building both a strong economy and a fair society.
The UK labour market is in great shape. Earlier this month I had the pleasure of announcing the latest employment figures. Given current concerns about the credit crunch and stock market uncertainty, you could be forgiven for expecting that the figures would be different to what they actually were.
Employment is up at a new record of 29.46 million – we have never had so many people working in Britain as we have today. The number of people claiming unemployment benefits is down into the 700,000s for the first time since 1975. The number of redundancies in the last quarter is the lowest since records began, and the number of vacancies is up.
Looking a bit deeper into the data, the employment rate for disadvantaged groups has risen faster than for others, and we have seen large increases in the employment rate in cities and in disadvantaged areas. Since 1997, three million more people are in work, over a million lone parents are working and the number of people on Incapacity Benefit – which has risen inexorably for decades – is now coming down, and is at its lowest level for eight years.
There remains, however, a great deal more that we need to do. The London Child Poverty Commission reminded us recently just how far we still have to go in London. Too many people in Britain are still trapped on benefit when they could be better off – financially and in their overall well being too – if they were in a job.
And the strength of the employment market gives us now in my view an unprecedented opportunity to extend the benefits of employment to areas and to individuals who have been excluded from them in the past. It’s an opportunity that we need to seize and to make the most of.
I want to set out this morning a précis of where we have reached, and what are our next key objectives in taking forward welfare reform, building on the achievements of the past ten years. And we recognise that the pressures of globalisation will require continuous reform, aiming constantly for a skilled and highly motivated workforce, given the ferocity of the international competition which enterprises in the UK will continue to face from India and China and other fast growing economies around the world.
Our aim is to develop a nation of active participants – an employment rate of 80 percent, up from 75 percent today, itself one of the highest rates we have ever achieved in the UK, with employment opportunity open to all; and to use increasing employment to deliver the eradication of child poverty by 2020. It’s an ambitious goal, and we recognise that it will require a far reaching programme of change to achieve it.
Our work with employers will be key. More and more employers are signing up to our Local Employment Partnerships (LEPs) – over 600 so far, and our aim is that a quarter of a million disadvantaged jobseekers will have moved into work through the LEPs by the end of 2010.
Last month I visited the Nissan plant in Sunderland, Europe’s most productive car plant, which at the moment is selling its UK-designed Qashqai fuel efficient four by four faster than it can make them – including exporting them to Japan. So it is putting on a third shift, and needs to recruit 800 people to staff it by next month. Through the Local Employment Partnership which I signed when I was there, the aim is that the 800 will include 120 disadvantaged jobseekers – people who have been on Incapacity Benefit or perhaps out of work for a long time for some other reason.
What is on offer here is a deal – Jobcentre Plus for its part will ensure through pre-employment training and in other ways that it presents disadvantaged jobseekers who are ready to go into a job; and the employer will give those applicants a fair chance of getting the job and of holding it down successfully subsequently. And our aim is that in the next financial year 100,000 people will move into jobs through those partnerships.
We are paying particular attention to disadvantaged individuals and groups: lone parents, disabled people, people from ethnic minority groups and those with long term sickness.
We will be requiring lone parents with younger children who can work to seek work actively, helped by a flexible system of pre-work preparation and in-work support. The requirement will apply once the youngest child is 12 or over from Autumn this year, 10 or over from next year and 7 or over from 2010.
Incapacity benefits for new claimants will be replaced from October by the Employment and Support Allowance, which is designed to help establish what a person with a physical or mental health impairment can do, rather than what they cannot. It used to be felt that only people who were 100 percent fit should be in work. Dame Carol Black’s recent report has emphasised that being in work is good for health, rather than injurious to health, and its clear that we need a cultural change in how we handle ill health among working age people, alongside our reforms to the welfare system.
We are working closely with our colleagues in the Department for Innovation, Universities and Skills to integrate skills support with employment support. In the future, we want people to be able to obtain help with developing skills alongside help in finding a job. We are introducing skills screening for all new claimants, and Skills Health Checks for those who need them. We are looking to tailor provision for those with basic skills needs and increase access to training allowances for Jobseekers.
We want more people to be able to gain training and support to move from benefits into work; and then also the additional training and support they need subsequently to be able to progress in work.
The New Deal will be modernised from April next year, so that it better meets the needs of those who have been on benefit for a long time or who have struggled to find a stable pattern of work. With fewer people out of work, the average help that people who have been out of a job for some time need to get back into work is more than it was when the New Deal started. We want it to be more flexible, and able to provide support better tailored to individuals’ needs.
Jobcentre Plus will remain at the heart of the system, working in partnership with specialist providers from the private, voluntary and public sectors. Personal advisers, working in Jobcentre Plus, and in its partner organisations, have played a key role in the changes we have seen for the better over the past ten years.
Words are powerful. It is true for our everyday lives. A comment from a family member, a friend, even a stranger first thing in the morning can set us up or knock us down for the rest of the day. With words we can encourage people. With a vision for what can happen through the transforming impact of work – people can be helped to imagine a future that right now they cannot see.
The National Audit Office report on Personal Advisers highlighted the big contribution of advisers to the high UK employment rate and low unemployment rate. Advisers raise customers’ confidence, improve job-search skills and help people tackle barriers standing in their way. Ten years ago we didn’t know how to get people over those barriers. Today we have learned that – across a very wide portfolio of challenges – the answer is committed and skilled advisers, personifying a new model for public service.
The role will be even more important as we work for 80 percent employment, focusing on groups whose aspirations have been kept low by the way the system has worked in the past.
Our aim is continuously to extend, modernise and personalise the support we offer. Helping people to succeed at work, and to improve their skills so that a job leads to a career. Making sure that work pays.
But this offer has a condition. In return for providing opportunities to get into employment, to learn new skills, and to be better off financially we expect those who can work to look or train for work.
We want to maximise employment opportunity for all, helping us tackle poverty in childhood and promote greater independence and well–being later in life.
We understand today that many people on welfare are capable of much more than we have previously expected. We know that people in work are not just financially better off, but healthier and better off in themselves too. And, once in work, we want people to be able to progress. So we need to raise our expectations, and give people the support they need to achieve what they are capable of.
Work is good. It’s good for people’s health and well-being, for their self-esteem and for well-being and future prospects of their children. Work promotes choice and independence, and builds cohesion. It is the best route out of poverty.
But work is changing. A higher level of skills is needed to get a job and progress in work. That creates new challenges which individuals, organisations and government all need to face head on. We are determined to do so successfully.
I wish you a very fruitful day.
Thank you.
