Learning from the past to deliver the future: Getting Britain바카라 사이트檚 labour market and economy working again
Alison McGovern MP, Minister for Employment delivered a speech setting out how to get Britain's labour market and economy working again.
INTRODUCTION
I want to thank everybody at the Institute and all the Commissioners for this important report today. It바카라 사이트檚 quite long and represents a very serious endeavour and brings evidence from every part of our country.
And I think it바카라 사이트檚 such an important contribution to a moment in which I hope, and I will say this morning, we바카라 사이트檒l see a page turned from the policy of the past to a new future for the Department that I proudly serve in 바카라 사이트.
In July, the Secretary of State gave a speech in Barnsley setting out our plans to refocus the Department for Work and Pensions from being the department for welfare to a department of work.
We바카라 사이트檙e going to change the Department for Work and Pensions fundamentally. Because if you go around Jobcentres they still have paper listings on the wall as if it바카라 사이트檚 1985. Meanwhile, the rest of the economy is galloping to our AI future. Which is why Liz and I want to be clear we are making an employment service fit for the future, not stuck in the past.
However, updating the Department for Work and Pensions is not just about technology. Today, I want to set out the failure at the heart of past thinking, and where our new policies will be led not just by new opportunities, but by fundamentally different principles.
UNEMPLOYMENT IS A PROBLEM OF THE ECONOMY, NOT OF THE INDIVIDUAL
The report published today describes the UK바카라 사이트檚 employment service as 바카라 사이트渢he least well-used in Europe바카라 사이트� 바카라 사이트� and I would add least well-loved 바카라 사이트� 바카라 사이트渙ften acting as an extension of the benefit system바카라 사이트�. The report highlights the need for far-reaching reforms, including a 바카라 사이트渃learer separation between employment support and social security delivery바카라 사이트�.
And I agree, that point is at the heart of my speech today.
I want to spell out fundamental flaws in thinking that have held us back.
For too long, the question of how to increase employment in the UK has been reduced simply to a question of the individuals out of work. The only question has been whether the social security system undermines a person바카라 사이트檚 will to work.
Because for too long, that narrow focus has dominated all thinking. We바카라 사이트檝e lost sight of the labour market as a whole.
For far too long in politics, we바카라 사이트檝e asked whether this change or that change to social security will result in more people working, instead of looking at the options that people have in the labour market and asking ourselves whether those options and choices are good enough.聽
This was always doomed to fail.聽 To know that, all you need to do is understand our past.聽
William Beveridge called it out in 1909. He said: 바카라 사이트淭he first question must be 바카라 사이트渘ot what is to be done with the unemployed individual, but why is he thus unemployed바카라 사이트�.
The truth is, for any individual, you can look at the ups and downs of life and describe why they aren바카라 사이트檛 working: they got sick, they had kids, there was a bus that could get them there but it was cancelled.聽 But when there are over 7.2 million people like that who are out of work, that is no longer an individual problem 바카라 사이트� it바카라 사이트檚 a failure of our whole economy. As Beveridge described it, it바카라 사이트檚 a problem of industry and a failure of organisation.
Look at the evidence:
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We바카라 사이트檝e got millions stuck on waiting lists and 2.8 million out of work sick. Is that social security? Or the people in charge of the health service who were supposed to keep our country well?
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We바카라 사이트檝e got almost 1 in 8 of all young people on the scrapheap 바카라 사이트� is that the fault of social security바카라 사이트� or was it the failure to help the lockdown generation?
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We바카라 사이트檝e got too many insecure jobs, with unpredictable working patterns. And that has nothing to do with social security.
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And the welfare state is not to blame for the lack of buses after 6pm in northern towns. It is ridiculous.
What people call 바카라 사이트榳elfare바카라 사이트� has been the current obsession.
HOW TO FIX OUR SOCIAL SECURITY SYSTEM AND DELIVER A THRIVING LABOUR MARKET
But this was not a trap that the author of our social security system fell into.
In his 1942 report, Beveridge wrote that his plan assumed 바카라 사이트渢he establishment of comprehensive health and rehabilitation services, and maintenance of employment, that is to say avoidance of mass unemployment as necessary conditions of success in social insurance.바카라 사이트�
Beveridge did not think social security was a cure-all. He knew its success was conditional 바카라 사이트� that his system would not work without these two other post-war reforms: the goal of full employment, and the goal of a national health service at the disposal of all workers.
Social security is there to smooth people바카라 사이트檚 incomes over time and to take account of life events we all have a strong chance of experiencing 바카라 사이트� old age, the birth of a baby, sickness or redundancy. Run well, it should be a counterweight to poverty and a stabilising force at a time of distress. But only if we acknowledge that tinkering with its edges will never solve the problems of the broader economy.
Instead, we need to give people the good choices and chances that they need.
Because markets can be a force for opportunity and prosperity. But we should also mould them, and shape them, and spread power widely within them. A market for labour that has businesses crying out for staff, and a queue at the foodbank door is failing this country.
You바카라 사이트檒l know that the Commissioners join Beveridge in prescribing the UK 바카라 사이트 an objective to move towards full employment. And it바카라 사이트檚 why Liz and I also join the Commissioners - having announced our bold, long-term ambition to get to an 80% employment rate 바카라 사이트� the kind of clear objective that our hosts here at the Institute for Employment Studies say will help change the fortunes of our country.
LEARNING FROM HISTORY: ECONOMIC CRISES AND ACTIVE LABOUR MARKET POLICIES
The central point I want to make today is that바카라 사이트檚 right and we바카라 사이트檝e forgotten our own history on this point. Particularly, the major turning point after the Second World War whereby the issue that caused the collapse of Ramsey McDonald바카라 사이트檚 second Labour 바카라 사이트 바카라 사이트� unemployment 바카라 사이트� was resolved. Post-war, it was accepted that the economy, and the labour market in particular, ought to keep people (men at least) in work and off the streets.
The generation that experienced dreadful conflict and mass destitution decided they would put an end to it. They created a department for employment to train and rehabilitate people, industry full of apprenticeships, and of course the Employment Exchanges - what we now call Jobcentres - to connect the unemployed with jobs. The Commission바카라 사이트檚 report, in my opinion, reestablishes this lesson for the 2020s.
Beveridge was not perfect, but he was definitely a man who made a difference.
But it is the story of two women on either side of the Atlantic that I think can help us see even more forcefully why we need a rebirth of active labour market policy today.
On one side of the Atlantic, Frances Perkins 바카라 사이트� first woman in the US cabinet, creator of the New Deal and author of the plan for prosperity in response to the destitution of the Great Depression.
On the other side of the Atlantic, four years earlier, Margaret Bondfield. We all know who that is, right? The first woman in the UK Cabinet, dealing with ever rising unemployment and an unsustainable unemployment insurance bill.
With active labour market policy for Bondfield not yet invented, the Labour 바카라 사이트 collapsed and her political career was all but forgotten.
Now if you read Bondfield바카라 사이트檚 memos from the time, and you can see her frustration, repeatedly making the case for increasing the national insurance fund to prevent hardship but with no answer to the cause of the problem. And the populists of the 1930s were at the gate, making the most of the economic distress.
Caught in the middle, she was desperate for the answer that came just a few years later in the United States with Frances Perkins바카라 사이트� creation of the New Deal.
Why do I tell her story?
Because unlike Margaret Bondfield we can바카라 사이트檛 say we don바카라 사이트檛 know what the answer is because since then we바카라 사이트檝e learnt from nearly 80 years of public policy in response to economic failure.
We바카라 사이트檝e learnt from that failure of the 1930s.
We바카라 사이트檝e learnt from the near full employment that came from the post war consensus.
We바카라 사이트檝e learnt from when the consensus broke down in the 1970s and other crises took over. Inflation became the big challenge that economic policy turned to face down 바카라 사이트� and the cost of that was a return to high unemployment.
We바카라 사이트檝e learnt from industrial collapse, which saw a move away from the mass employment provided by heavy industries like manufacturing and coal mining towards services and finance.
We learnt what this would mean for towns and cities across Britain. When women joining the workforce concealed an even worse outcome for men.
And we바카라 사이트檝e learnt that this saw regional disparities deepen 바카라 사이트� in whole parts of the country, economies simply failed 바카라 사이트� and many are still yet to properly recover.
Despite attempts to manage this, the number of people out of work due to sickness grew rapidly, with incapacity caseloads broadly doubling to 2.7m by the time we entered the 2000s.
So we had to learn through the actions of the last Labour government in 1997, that in response to this horrendous situation, there had to be an explicit rebirth of active labour market policy, with the United Kingdom바카라 사이트檚 very own New Deal.
A radical series of reforms designed to provide people with active tailored support to help get them back into work as unemployment fell and the economy grew.
With a big focus on young people.
The global financial crash in 2008 saw unemployment rise again and the Department for Work and Pensions then, in response, scaled up its active labour market policy operations.
And as a result, the global crash did not have a long-term impact on the trend rate of employment. That is not to say everything was perfect, but it바카라 사이트檚 worth learning from.
And I바카라 사이트檝e certainly learnt from what happened in 2010.
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Active labour market policy was shrunk back to a preoccupation with social security rules.
And the results of the past 14 years show what바카라 사이트檚 been happening with our labour market.
A quarter of working age people are not in work, with 2.8 million people out of the workforce due to long-term health problems.
Over 4 million people in work and with work-limiting health conditions which may put them at risk of not fulfilling their potential or falling completely out of the labour market.
And I want to say to you all this morning - now is the time to turn the page on that failure.
Because just as in 1930, Margaret Bondfield said of the Unemployment Insurance Scheme that it 바카라 사이트渋s being asked to meet situations for which it was never designed.
The same is true of our social security system today.聽 We cannot load every economic problem we face onto minor tweaks in the social security rules.
Which is why, as part of our Get Britain Working White Paper, we are bringing forward fundamental reforms to employment support.
That includes changing the outcomes against which we measure its success 바카라 사이트� for example, not focusing alone on getting people into work but on achieving higher engagement with everyone, much higher employment in the short-term, and higher earnings too.
We will overhaul Jobcentres in this country and we will get people into work long-term.
We will have a new youth guarantee so not a single person will be left on the scrapheap when they바카라 사이트檙e young.
And because Liz and I know the country doing well is no compensation if your town or city is being abandoned, we will make sure - as the Prime Minister says - that those with skin in the game 바카라 사이트� our mayors and regional leaders 바카라 사이트揾ave the levers they need to make change.
As the Commissioners have laid out in their report, our highly centralised system needs to move towards a model more in line with those used in other high-performing countries 바카라 사이트� with more control at the local level.
This big reform will be matched by the action we바카라 사이트檙e taking across the UK 바카라 사이트 to support jobs and growth.
We바카라 사이트檒l soon be introducing legislation into Parliament so people바카라 사이트檚 work is better paid and more secure.
Skills England will change the place of learning in this country to give everyone a chance of success.
And we will create new Local Growth Plans powering towns and cities up and down the country. 聽
I know change won바카라 사이트檛 happen overnight, but I am determined to fix the foundations in the Department for Work and Pensions so that more families can benefit from the security, dignity and prosperity of good work.
CONCLUSION
The point I바카라 사이트檓 making here, I know is not a new or innovative one. As I바카라 사이트檝e said, it바카라 사이트檚 the founding principle of our social security system 바카라 사이트�
You cannot have well-functioning social security without full employment.
Beveridge knew that.
But let me conclude with a few small points that we could help Beveridge understand. 聽
Because whilst his principle remains the same, the circumstances we make these reforms in are very different.
So it is for us to apply that principle to the society we have now - more than 80 years later.
Where the health system 바카라 사이트� still as vital as ever 바카라 사이트� must address a very different set of challenges. Not infectious disease, but chronic poor mental health.
Where women바카라 사이트檚 role in the workforce makes the need for a proper childcare system as pressing as Beveridge believed the need for a reformed health system was in the 1940s.
Now Beveridge also didn바카라 사이트檛 give any evidence that he foresaw the rise of the motor vehicle, which - combined with inadequate investment in public transport - forces those who can바카라 사이트檛 afford a car to face limits on their ambitions 바카라 사이트� especially if they live in an area with fewer opportunities and chronically bad transport.
Changing that will be part of better organisation for our economy and I hope that Beveridge might have thought was a good idea.
Our desire for an 80% employment rate comes from a serious understanding of our country바카라 사이트檚 history, and also from facing the reality of the economy today. We have a serious understanding of the challenges and opportunities before us, and who they apply to.
That is why what is not needed now is a sticking plaster, or a tweak or an amendment, but a change in principle, in policy and in practice. Leading to a better organised economy 바카라 사이트� and a market that works 바카라 사이트� spreading opportunity and prosperity to every corner of our country.
Back in the 1930s, the New Deal provided Americans with a springboard and a safety net. And a recognition that you don바카라 사이트檛 get one without the other.
What unites these moments in history that I바카라 사이트檝e talked about is an ambitious idea about what can happen if you put a platform under people and see what they could do and what they could achieve.
The report that the Commissioners have written - published today 바카라 사이트� I think is very ambitious. But I hope I have made the case, in my remarks, that it ought to be ambitious.
Because for too long, our economic policy has shrunk the people of this country. Our new economic approach will see people for all they could be and all the opportunities they deserve.