A speech by the Rt Hon Chris Grayling MP, Minister for Employment.
Britain can be a world beater. You don’t have to look too far in this country to find examples of brilliant technological breakthroughs. Or dynamic entrepreneurship. Or finely honed skills. When we want to we can take on the world.
And the finest gems are often hidden well away from the public eye. The small computer games designer that is changing the face of entertainment. The precision engineering firm tucked away on an industrial estate that is changing the frontiers of automotive technology.
We can and should be proud of what we can do. But if Britain is to succeed in the future we can and must understand the nature of the challenge we face. And respond to it.
I worry that too few people truly understand the nature of today’s world, the opportunities it presents, but also the very real risks to our future.
I worry about that particularly as the Employment Minister who month by month sits in the television studios and talks about our unemployment challenge.
There can be no greater priority for Government than to make sure that all of its people have the opportunity to find gainful employment.
To create an environment where the labour market is flourishing, and where new generations start out in adult life with real life chances to fulfil their potential.
But it won’t just happen. We live in an extraordinarily competitive world. We already know about the economic challenge that comes from China and India, but today the competition comes also from unexpected places.
Today the economic news is often about the economic potential of Burma. The potential for Africa to become more of an economic powerhouse. That Brazil owns ten per cent of the national debt of the United States. It hardly seems a moment since Latin America was an economic basketcase, facing bankruptcy and depression. The world is changing at an extraordinary rate. So we face unprecedented economic challenges as well as extraordinary opportunities. And success won’t just happen. We have to work for it like never before. And that means building an understanding of the world as it is, and not how we would like it to be. And it often means a willingness to work your way up from the bottom. I’m afraid that too many people still just don’t get it. Like those who rail with outrage against the idea of a young unemployed person being offered the chance to do a month’s work experience with Airbus, British Telecom, UK Mail or Tesco. Slave Labour they call it. Well that’s just insulting to some great companies who are helping young people get a job, not to mention the young people benefiting from placements by picking up the valuable skills and experience they need to get a leg up into the world of work.
They just don’t understand that in today’s world, things don’t come on a plate. That Government can’t just create opportunity for all. That people have to go the extra mile if they want to succeed.
Nor do they understand that you have to create wealth, not borrow it. Then there are the officials in Brussels who sit in meetings about the need to create employment and talk about more regulation as the solution.
It baffles me that at a time when we face a huge jobs challenge across Europe, that someone thinks it is sensible for the EU to be spending time legislating to ban high heeled shoes in a hairdressers. Don’t they understand that more and more red tape drives more jobs to emerging countries, and away from Europe. Creating new jobs should be absolutely at the top of the priority list for the EU and for any government in Europe. Any measure that damages employment in Europe should be set to one side. We cannot afford to do otherwise.
And there’s the union leaders who demand swingeing taxes on wealth creators and unrealistic pay rises and more protection for their members.
Don’t they realise that in many sectors, companies are a few business class air tickets away from relocation somewhere else where their enterprise and wealth creation is welcomed and not derided.
These views cannot be allowed to succeed in this country. If they do, Britain will be left on the sidelines. We have to face up to some simple realities. Britain can only succeed if it fights against these outdated dogmas and faces up to the world as it is. The future is not about more and more regulation to provide more and more comfort and protection for our citizens. If we go down that route there will be no jobs for them to have. It is not about borrowing more and more money in the hope that the party will never end. It is about sound money and living within our means. It’s not about believing that we will win come what may. It is about working together to shape up and face the competition head on, and make sure we do win. As we are starting to do in the contact centre business. I personally think that anyone who offshores customer service is mad. We all know how frustrating it can be speaking to a call centre operator overseas who works from a set script but doesn’t get what your problem is.
So it was a particular delight to visit the Contact Company in Birkenhead to find a young British entrepreneur turning the tide and bringing customer service back onshore again. Creating jobs in a deprived area. Making our task of tackling unemployment easier. And proving that we can do it.
It’s upon the shoulders of our young entrepreneurs that the future of employment in this country rests. The days of mass employment in a single company location are largely over. One of the most startling and thought provoking statistics I have seen recently was about the success of Nissan in the North East. Last year they built nearly half a million cars in the UK. They did it with 5,000 workers. A brilliant commercial success.
But a generation ago it would have taken tens of thousands of people to build those cars. So it’s just not realistic to believe that we can return to the world as it was. We have to unleash British entrepreneurship, and build more international success stories. I remember ARM Holdings when it was a tiddly little company in Cambridge that had just designed its first computer chip. Driven by a determined team of entrepreneurs, it wouldn’t even have shown up on the corporate radar. But through sheer determination and hard work it turned into an international giant, and one of our leading companies.
That has to be our model for the future. Particularly if like me you are so passionate about seeing unemployment come down. But it won’t happen by chance. It will only happen through determination and hard work. And by driving out the things that stop our entrepreneurs from building their business. The starting point has to be to remove as many of the barriers to employment and entrepreneurship as we can. We are determined to reverse the tide of decades and deregulate. And also to slay some of the regulatory myths and abuses. We’ve made a start, but there’s still a long way to go. Both here and in Brussels.
In part it’s about removing regulatory barriers altogether. For example, I strongly support the Government’s plan to extend from one year to two the threshold before someone can access an employment tribunal for unfair dismissal. Employers do not lightly get rid of staff in whom they have invested time and money. But no small firm can afford to carry someone who is not willing to do what is needed to ensure its success.
In my own area, we are now embarking on a major process of reduction and simplification of health and safety regulations and codes of practice. Good health and safety is important to business. But some industries are still dealing with multiple sets of regulation, and often contradictions between them - as well as hundreds of pages of inaccessible guidance. That really has to change - and it will. Within two years we aim to have rewritten all of our hundreds of health and safety regulations and guidelines to make them simpler, easier to understand and more relevant to business. And to have cut the number of regulations in half.
We are also taking steps to exempt a million self employed people from health and safety regulations altogether. But it’s not just about regulation. We also have to make sure that businesses do not do things that the law doesn’t require them to do because of regulatory myths.
A few weeks ago I came across a disgraceful example of how a small firm can be abused by a consultancy misrepresenting what regulations really say. I visited a small engineering company and as part of my tour, they showed me their health and safety paperwork. It was literally eighteen inches wide on the shelf. Absolutely mad for a small business.
But before you blame the regulations, it’s worth checking. So I gave copies to the HSE to look at and they told me that 90% of it was totally unnecessary for a company like this.
It brought home to me just how important it is that business doesn’t just take what it is told at face value, and is ready to challenge. And we have to make sure that the right information is as simple and easy to obtain as possible. So we’re setting up through the HSE “challenge panels” to help business get quick and easy answers when they fear they are being misled. I want to slay the myths that waste the time of our entrepreneurs.
Along with all of this, we have to make sure we have a ready, willing and hard working workforce. We cannot afford to go on paying for the cost of a welfare state where millions who can work do not do so. Of course, many of our citizens, particularly those who have serious health conditions, will always need ongoing support from the state. But no one else should expect to have the ability to simply sit there at someone else’s expense.
Our welfare state has to be a ladder up which people climb and not a place in which they live. There is a mythology out there that all benefit claimants are scroungers. That is not right, and it is much too simplistic. My experience is that those who have been on benefits for the long term are more often than not completely lost, lacking self-confidence, with a firm belief that they cannot get back into work. But of course there are those who do not want to try, and they will get no quarter from this Government.
But the truth for employers is that most of our unemployed would dearly like to work, though many are ill-equipped to do so. And I have seen many cases where, given a chance, someone whose life seemed to have fallen apart turns things round and turns into a model, dependable and hard working employee.
And even those who are genuinely feckless can change. A few weeks ago I met a young man who had been through our Mandatory Work Activity programme. Unlike voluntary work experience, this is genuinely something we require people to do, or they will lose their benefits. It’s designed to “refocus” people who are perhaps not doing what is needed in their jobsearch. Not surprisingly many sign off benefits immediately when referred. The black market is alive and kicking still.
But this young man had been totally transformed by the programme. He freely admitted to having been lazy and disinterested. But when he went for his placement, at a social enterprise specialising in recycling consumer goods for the developing world, he found he really enjoyed the camaraderie of the workplace. And after his month he stayed on as a volunteer, and then got a job there. Someone whose life has really been turned around and will now, I think, be a hard worker for the rest of his life.
It’s a big challenge turning round a welfare culture that has lasted half a century. Our reforms will make sure that people will always be better off in work than on benefits. We are reassessing all of those on incapacity benefit to see who can return to work, even if it is in a different role to before. We have set a clear cap on the maximum amount people can receive through the benefit system. And our work programme, combined with a more flexible approach through JobCentre Plus is delivering much more personalised back to work support than before.
And through measures like our work experience scheme and the Youth Contract we are doing everything we can to give our young unemployed people a first chance in the labour market.
It’s not just me saying what a good thing work experience is - we’ve got the evidence to show for it. We have just published research which shows those undertaking a work experience placement were 16 per cent more likely to be off benefits 21 weeks later than young jobseekers who don’t participate. They were also more likely to be in a job at that point. That shows the scheme is making a real difference to their lives.
It’s time for those who have criticised work experience to take a long hard look at themselves. Work experience isn’t about exploiting young people - it’s about showing them what life is like in a workplace, teaching them skills which are vital to an employer but which they may otherwise be missing, and giving them a chance to shine.
Just listen to some of the young people now in a permanent job with career prospects having started off with those four weeks of work experience. You don’t hear them shouting that they’ve got a raw deal. They’re grateful for the opportunity they were given.
Protesting against this scheme wasn’t a fight for the rights of young people - it was an attack on their prospects for the future. It’s playing politics with their lives, and I won’t let anyone do that.
Alongside that we have massively increased the number of apprenticeships, we have introduced greater flexibility into skills provision and Michael Gove is transforming our education system. We are putting in place the building blocks for a better future.
But we can’t do it ourselves. We need a dynamic, vibrant private sector if we are to get those people into jobs. And we need employers who are willing to give people a chance. A few weeks ago I prompted comment when I said that I hoped every employer would look to give an unemployed British person a chance when they recruit. Inevitably I got the British Jobs for British Workers comments and was told that wasn’t legal under European law.
But that totally misses the point. It’s easy to hire someone from Eastern Europe with five years experience and who has had the get up and go to cross a continent in search for work. And many employers do so.
But those who look closer to home find gems too. Very often the surly young man in a hoodie who turns up looking unwilling to work can turn into an excited and motivated employee. It’s all about the expectations that they have, and the place they come from. And employers who give them that chance find it enormously rewarding.
So I stand foursquare behind my hope that British employers will put local recruits first.And of course that’s what our work experience scheme is all about. It’s often easy to find that first foot on the ladder if you are well connected. If you aren’t, it can be perilously difficult. That’s why the Chief Executive of Barnardos was right to talk about it as a lifeline for young people from deprived backgrounds.
It is hard work. For everyone. Particularly for the low paid. But even those at the other end of the pay scale often work all the hours that God sends to compete in an aggressive international marketplace.
There is no other way.But if we are to build a future where our young people have the career opportunities that we all want, where our weak and vulnerable get the support they need, and where we can provide the quality of services that our citizens expect, then we all have to get stuck in and make sure we succeed.
Anyone who pretends otherwise, who believes there is a way of short cutting this reality, is living in dreamland. I want Britain to be at the forefront, for enterprise, for technology, for services, for jobs.We can get there. We must get there. But we must not believe that somehow, it won’t be hard work for everyone.