Since its first MPs were elected 100 years ago, the Labour party has made employment opportunity for all and decent standards at work a central part of its mission to advance equality and social justice. But this Labour government has gone further than any of its predecessors in setting an aspiration of getting 80 per cent of people of working age into jobs.
With a current employment rate of nearly 75 per cent, we are already ahead of the rest of the G8, the world’s wealthiest nations. Yet increasing employment levels still further is essential for the prosperity and security both of individuals and their families, and of the economy as a whole.
For the individual, the benefits of work are manifest. Work is the best route out of poverty: it raises family aspirations and it fosters social inclusion. For the nation, increasing employment levels is the only way Britain can meet the twin challenges of competing in a highly competitive global economy and supporting a population where, by 2050, there will be double the number of people over the age of 80 than under the age of five.
Developing nations will continue to rise in coming decades, and Britain must continue to raise its game to compete. In 2003, China was responsible for a third of the world’s growth, and in 40 years it is estimated it will have the largest economy in the world.
The challenge of changing demography at home is as great as the challenge from other nations. By 2050, there will be 50 per cent more pensioners than today. We need to maximise the number of people in work to support them.
The Labour government has already done much in its first two terms to meet these challenges, by tackling the Tory legacy of spiralling unemployment and a welfare system that wrote people off to a life of poverty and benefit dependency.
Under the Tories, unemployment hit three million twice, and the numbers on incapacity benefit trebled as they shuffled people onto the benefit to hide the true levels of unemployment. And the contrast is similarly stark when you consider the Tories’ current position. A party that opposed all of Labour’s measures to make work pay, and is committed to scrapping measures to create an active labour market like the New Deal, has clearly learnt nothing from the devastation it wreaked on the country over 18 years.
By contrast, Labour has made work pay through creating tax credits and introducing the national minimum wage, which the founders of the Labour movement made one of their defining goals. The government has helped more than 2.3 million extra people into work by maintaining a strong economy and, critically, has moved to replace the old Tory welfare system with an active, enabling welfare state.
The New Deal, together with measures to end discrimination, have begun that process by offering more support to other groups, who may get huge benefit from working, but experience barriers to getting a job. Now, in the centenary year of the Labour party in parliament, we will bring forward proposals in our welfare reform green paper to break down the remaining barriers people face in accessing work opportunities.
We need to help the many people with a health condition or disability who get trapped in the incapacity benefit system. There are, of course, many who genuinely cannot work, and these people should feel secure that the state will support them. But 80 to 90 per cent of people in the early part of a claim for incapacity benefits expect to get back to work. Therefore, we cannot accept a system that can effectively write people off, diminishing their abilities and lessening their life chances.
The principle will be something for something: increased support addressing people’s right to work in return for an obligation for people to do what they can to return to the workplace.
In addition to measures on incapacity benefit, we will also build on the New Deal for lone parents by doing more to help them move into work when they are ready to do so. And we will continue to take steps to ensure that older people who wish to work are able to continue doing so. By making it easier for people to better their lives through work, the next stage of Labour’s welfare reform agenda could ultimately increase opportunity and prosperity for many thousands of families. It is a New Labour agenda of which any of my predecessors could be rightly proud.