Breaking new ground on welfare reform: growing the economy and changing lives
Today I’m announcing that I have set up a new cross government ministerial taskforce to drive the further action we need to take down barriers to recruitment.
Well, good morning everybody, and Shevaun thank you so much for that excellent introduction and for all that BCC does, very important work that you do too.
And it’s great to be here this morning at Kennington Jobcentre.
And I’m delighted to see so of many Britain’s fantastic businesses represented here this morning.
Now, it may be the first time that many of you have been in a Jobcentre – but I wanted to specifically invite you right here today, to make the point that we are open and ready to help you recruit.
And it’s great to be joined by my fantastic ministerial team – by Jo, Mims and Paul - and by some of our work coaches and other colleagues who do such brilliant work day to day right across the country finding the right candidates for those roles.
Now, I’m going to talk a bit more today about my mission to make Jobcentres the number one recruitment service for businesses.
But let me put this first into the bigger picture.
Welfare, at its best, is about far more than benefit payments.
It’s fundamentally about changing lives…about giving people every opportunity to reach their full potential.
And it’s in that spirit that we’re delivering a new welfare settlement for Britain, one that is confronting some of the most important challenges of our time:
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Tackling economic inactivity, getting more people off welfare and into work.
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Unlocking British talent as part of a new economic model that moves away from a reliance on overseas labour.
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And creating a benefit system that is fit for the future – sustainable, fair, and compassionate.
To achieve this, we’re breaking new ground with our next generation of welfare reforms…
…and we are harnessing Artificial Intelligence to transform the way DWP delivers life-enhancing services.
Before I come to each of these priorities, I want to reflect on the story of the British self-taught archaeologist, Basil Brown – who, quite literally, broke ground when he unearthed the Anglo-Saxon treasure trove at Sutton Hoo.
As a hobby, many years ago, I qualified to guide the British Museum. As a result, I got to marvel at these beautiful objects.
I also got to appreciate what it took for a mound of earth in Suffolk to finally give up its secrets and become the site of one of the greatest archaeological discoveries ever made.
Like delivering reform - it took time. It took determination.
That prize was not seized in a single act. It was a process.
Beginning with a clear vision – it started with heavy lifting – removing skip-fulls of sand and clay to reveal the outline of something special.
And then, it required painstaking work – to softly brush away layers of Suffolk soil to reveal the imprint of a ship…
– and then, ultimately, a hidden treasure chamber full of the most incredible artefacts.
Hundreds of priceless items, glistening as they were brought into the light.
It’s the kind of discovery every archaeologist dreams of making. And one which, if admittedly a little unusual, is what I am reminded of when I think about what my job is all about.
Because I want to use the power of welfare reform to uncover the treasure that is the hidden talent in our country.
To unleash the potential in communities that have too often been over-looked.
Of course, our tools in this endeavour are wide-ranging, reflecting the different approaches that we’re taking -
From the fine chisel and soft brush…for tailored and targeted support to boost skills and help recruit people into high-demand sectors…
…to the large-scale excavator…helping to deliver our structural reforms, ensuring welfare supports and reflects the rapidly changing modern world.
Collectively, my approach is a welfare system that:
Aims higher.
Digs deeper.
Thinks bigger.
Looks closer.
Supports better.
Works smarter.
And acts bolder…
…so that everyone who is able to work, has the best possible chance of staying in, or returning to employment…
…and that we have a benefit system that targets support to people who need it most.
With our plan and the right tools, I believe we can uncover and unleash Britain’s hidden army of talent.
And we have the courage, compassion, and conviction that this requires.
Courage: not to just take the easy way, but to have a grown-up discussion about how we can ensure that the welfare system is fair to taxpayers and sustainable so that it continues to carry the support of the public who recognise that spending on welfare can never be limitless.
Compassion: for the most vulnerable in society who need the state’s help, while also recognising that there is nothing compassionate about the lost potential of people on benefits who could work but choose not to do so.
And conviction: in the value of hard work, in what is perhaps an old-fashioned belief – yet backed by all the evidence – that work is good for you, good for your financial health, but also good for your physical and mental health too.
The final requirement of reform of course is time.
And in the time since 2010, we can point to significant, positive change.
With Iain Duncan Smith’s clear vision, and the introduction of Universal Credit, we closed the door on a culture of welfare dependency and opened a window onto the world of work.
Since then, we have been guided in the belief that work – not welfare – is the best route out of poverty. The surest way to improving living standards –
1.1 million fewer people in absolute poverty is a testament to that fact.
And it’s why we continue to put work right at the heart of welfare.
It’s why we are accelerating moving people from legacy benefits into Universal Credit.
It’s why we continue to strengthen work incentives – requiring more of jobseekers to find work or increase their hours in return for those benefits…
Because, as the Prime Minister made clear in his speech last month: unemployment support should be a safety net – but never a lifestyle choice.
So we’re rolling out mandatory work placements for those who remain unemployed.
And from this month, new rules in Universal Credit mean anyone working fewer than 18 hours a week at the National Living Wage will be required, with support, to look for extra work.
It’s why the Chancellor is right to reward work –
increasing the National Living Wage by nearly 10% to support the lowest paid…
and cutting National Insurance – with the second cut appearing in pay packets last month, worth £900 a year to the average worker.
And we want to keep cutting this double tax on work, with a long-term ambition to abolish it altogether.
With our personal tax cuts, and the extra employment support in our Back to Work Plan, the OBR forecasts that this will result in 300,000 more people in work.
This builds on our record of making work pay that has seen –
Nearly four million more people in work than in 2010.
Unemployment down by over 40%.
Youth unemployment down by 42%.
Near-record numbers on company payrolls.
Wages rising in real terms for each of the last 10 months.
Inflation more than halved.
And employment stronger than in the United States and in France.
This is the result of incremental yet ambitious, serious, and sustained reforms to overhaul an outdated and complex legacy benefit system…
…and to place work incentives firmly at the heart of welfare.
It’s the result of having a plan that means we’re on the right path.
It’s the result of courage, of compassion, and of conviction.
And it’s those principles that underpin my approach to going still further.
Unemployment remains low by historical standards. But we are not complacent, which is why we are taking action to ensure that those who are unemployed – and can work – take up our support to do so.
What is particularly concerning is the rise in ‘hidden unemployment’, in the economically inactive – people who are neither in work nor looking for work.
Now, it’s important to put this into context – inactivity in the United Kingdom is lower today than it was in 2010, it’s lower than the average across the G7, the European Union and the OECD. It’s lower than in the United States, France, and Italy.
However, if you exclude students, there are nearly seven million people of working age who are economically inactive. 2.8 million people due to long-term sickness.
This has risen significantly over the last five years, and particularly since the pandemic – the number has risen by 110,000 in the last year alone.
Of particular concern to me is the rise in the number of young people who are out of work because of ill health, which has more than doubled between 2013 and 2023.
That’s far too many people in their prime missing out on the financial, social and health benefits that we know work brings. Missing out on that purpose and sense of fulfilment…
And that’s why the Prime Minister has described our welfare reforms to get more people into work as a ‘moral mission’.
But there is also an economic imperative as well.
Every person who can work, but is denied that opportunity, is not just a personal story of lost potential, it is denying the British economy and businesses the talent that they need – and in turn, the growth that funds the public services that are the hallmark of a civilised society.
Too many people are being signed off sick without the proper support to stay in work.
That’s why we’re reforming the fit note process so that it starts with an assessment of what someone can do with the right support, rather than what they cannot do.
And we’ve now announced the 15 WorkWell sites – covering about a third of the health areas across England.
Rolling out from this autumn; instead of keeping people signed off, WorkWell will sign people up to the health and employment support they need to stay in or to get quickly back to work.
We’re also making changes to the Work Capability Assessment – the gateway into incapacity benefits – so it reflects the changes in the modern world of work and all the opportunities that that presents.
According to the OBR, this will mean 424,000 more people getting the opportunity and support to move into work rather than being placed on the highest tier of incapacity benefit.
This plan is about fairness.
Fairness for those held back because they are not getting the right support.
And fairness for the taxpayer by ensuring those who can work, do work.
Fairness for those who can’t work and are in the most need of the state’s help.
I want to turn now to another area where we are delivering fairness: moving away from our reliance as a country on overseas workers.
As our welfare reforms get more people into the labour market, we are building a new economic model based on British talent.
It’s a model that supports the best and brightest to continue to come and work in the United Kingdom, while delivering more opportunities for people here at home to get on, to progress, and to increase their pay.
As part of that, the new visa rules brought in by the Home Secretary will mean around 300,000 people who came to the UK in the last year would not now be able to come.
I know this presents a recruitment challenge for some employers in certain sectors, particularly those that have relied more on migration in the past.
But this is also a huge opportunity for the thousands of jobseekers within our domestic workforce to move into roles that have previously been filled by overseas workers.
Ensuring British workers have the skills employers need, and are attracted into the right sectors, is of course key.
And we’ve taken important steps, with industry, to do this, including –
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Delivering over 280,000 Sector-based Work Academy Programmes – or SWAPs, with at least a further 80,000 places to come this year.
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Launching a new Hospitality SWAP and Skills Passport.
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Giving a £34 million boost for the Department for Education’s Skills Bootcamps to help people move into new sectors.
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And introducing funded apprenticeships for small businesses.
Alongside this we’ve also been helping to promote opportunities in key sectors, such as –
Our ‘Made with Care’ campaign to attract more people into a career in adult social care…
…and the ‘Do Something Big’ initiative to promote rewarding careers in childcare.
But despite this, I know that barriers still remain for many employers.
And so, we are going to go further, much further.
Today I’m announcing that I have set up a new cross government ministerial taskforce to drive the further action we need to take down barriers to recruitment.
With the same ‘whole of government’ approach we took to increasing the supply of HGV drivers in 2021, the taskforce will bring forward interventions that will free up supply in those tighter sectors where we know recruitment can be tough –
in sectors like construction, manufacturing, logistics, care, and hospitality.
This comes on top of the recruitment service Jobcentres deliver – a service that has ramped up across 60 Jobcentres following my call to action.…with more job fairs…faster recruitment processes…and reaching out to many more businesses.
It’s great that many employers are already using our services – from large employers like Wetherspoons to local companies like the Aspire Childcare Project, just up the road, right here in Southwark.
And I want more to join them.
So from next week, we’ll be running a significant national marketing campaign that will put Jobcentres centre stage.
Reaching over 90% of businesses and recruitment decision makers, our campaign will focus squarely on those sectors where recruitment is a challenge, especially from significant reductions in migration.
It will bring home all the ways Jobcentres can support employers –
Whether that’s help with running a recruitment campaign…
…or attending one of the thousands of job fairs we hold across the country.
My message is clear: our teams stand by ready to support you and to grow your business.
And my message is also to the British people: For too long we have relied on labour from abroad and there is a great talent pool here - right here - in the UK – I am going to put that right.
Now, as we build this new economic model based on British talent…
And we rise to the challenge of hidden unemployment…
I am making sure that the welfare system is fair and sustainable for the future.
We will always ensure a strong welfare safety net, something underlined by this government having delivered one of the largest cost-of-living support packages in Europe – support that prevented 1.3 million people from falling into poverty at a time of acute worldwide inflationary pressures.
But the reality is that the welfare system was, in part, built for a different age.
Take the Personal Independence Payment, which is creaking under the weight of the profound changes we’ve seen in the nature of disability since it was introduced over a decade ago.
If we do nothing, the cost to the taxpayer will rise by 60% over the next five years – an increase of almost £14 billion.
So the Modernising Support Green Paper that I have published sets out how the welfare system can better target support at those who need it most and deliver better value for the taxpayer.
Because the public’s support for welfare cannot be taken for granted.
It rests on a system that is compassionate but also fair, with carefully managed spending.
It also rests on having a modern system where technology drives better services.
And I am ensuring DWP is at the forefront of harnessing Artificial Intelligence to build the welfare frontline of the future – one that puts people at the centre of services.
I have placed the AI team that I have built – and who are bringing the future to the welfare system – to sit right outside my office door.
And with the experience of secondees from the likes of Amazon and IBM, they are helping us seize the welfare productivity prize and to modernise services.
Thanks to AI, we can now read and automatically identify the most vulnerable people out of the 25,000 letters that DWP receives every day, in just a few hours, connecting them to a human who can help more quickly.
And we do this day after day with technology that never tires and that massively outperforms human beings.
We’re also empowering work coaches with our AI-powered personal assistant.
In a fraction of a second, this Generative AI tool analyses a customer’s situation and works out the most powerful next best step for helping them into work.
With innovations like these, we are using the best that AI has to offer to help our people be the best that they can be – creating a smarter, speedier, more effective welfare system for the public.
Armed with AI, we’re shaping the future.
And with chisel, brush, and excavator – we are breaking new ground with our next generation of welfare reforms.
Reforms that will uncover and unleash this country’s hidden army of talent.
We have the tools. We have the courage, the compassion, and the conviction.
We have the right plan…
It’s a plan:
That rewards work.
That protects the most vulnerable.
That grows the economy.
That changes lives.
A plan that is delivering a brighter future for Britain.
Thank you