Robert Owen Institute

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A speech by the Rt Hon Iain Duncan Smith MP, Secretary of State for Work and Pensions.


It’s a pleasure to be with you this evening.

And I’d like to extend my thanks to the Robert Owen Institute for inviting me to be here tonight.

Robert Owen was ahead of his time in believing that a person’s character was informed by the effect of their environment.

“Any general character, from the best to the worst, from the most ignorant to the most enlightened, may be given to any community…by the application of proper means”

How we achieve a rebalancing of our society by application of those means is the topic of my lecture tonight.

Last month’s riots were a wake-up call.

But while I was appalled by what took place on the streets of some of England’s major cities, I cannot say I was entirely surprised.

For I believe we have seen Britain’s social fabric fraying for some time.

Social breakdown

Before the recession started we had more than 4 million people sat on out of work benefits - many of whom had been receiving them for ten years or more.

We had one of the highest levels of unsecured personal debt in Western Europe, and the highest teenage pregnancy rates.

At the same time we had over a million children growing up in households with parents who were addicted to drugs and alcohol.

And when it came to violent crime we found ourselves to be amongst the leaders in Europe.

Yet this was during a period when the economy was growing - with employment up by more than 2 million in the decade to 2008.

What had become clear and was starkly illustrated in the Centre for Social Justice’s two reports - “Breakdown Britain” and “Breakthrough Britain” - was that one section of society had become semi-detached from the rest.

As social mobility ground to a halt, the part of society on the lowest incomes became static.

Too many find that if they are born into such communities they are likely to remain in the same condition as their parents.

With income inequality the worst for a generation, high levels of benefit dependency, broken families, crime, debt and drugs became the norm for whole communities.

The problem was that we were treating symptoms, not causes.

And by failing to deal with these issues we were storing problems up further down the line.

For many years, while people were aware that there were problems in poor communities they remained largely unaware of the true nature of life on some of our estates.

In a sense, we had ghettoised many of these problems, keeping them out of sight of the middle class majority.

Occasionally some terrible event would make it on to our front pages…

…the names of Rhys Jones, Damilola Taylor, Charlene Ellis and Letitia Shakespeare are tragically well known to many of us.

But because they were small in number, people were able to turn away from the problems faced in certain parts of the country.

But last month the inner city finally came to call, and the country was horrified by what it saw.

And while it is of course a good thing that there were no riots in Scotland, I’m firmly of the view that is an issue we face in the UK as a whole.

While they might manifest themselves differently, the same deep-rooted problems exist on both sides of the border, and as a passionate supporter of the United Kingdom I want us to work together to solve them.

Whether in Manchester or Glasgow, London or Edinburgh, Birmingham or Aberdeen…

…I believe we’re stronger when we tackle these issues together.

Damaging culture

The riots were a wake-up call, and a reminder of the wider problem that we all face.

The scenes of our young people ransacking local businesses…

…sometimes proudly displaying their acquisitions on the internet…

….spoke to a damaging culture which I believe has been on the rise in recent years across the UK as a whole.

I touched on this problem in a recent speech, some time before the riots took place.

There I spoke about a culture of recklessness and irresponsibility, a culture of “live now, pay later.”

I felt that we had seen it in the staggering growth in both public and private debt, with little regard for who would pick up the bill, and in the unwillingness to undertake fundamental reforms of our welfare system to secure our children’s future.

Last month we saw this culture crystallized into its crudest form - not so much “live now, pay later” as “take now, pay never, and damn the consequences.”

This is what the Prime Minister meant when he said that the riots were about behaviour and values.


The riots also played a role in heightening awareness of gangs in the public consciousness.

In terms of numbers gangs made up a minority of those actually taking part in the violence, yet their role was significant.

First, the riots showed us that in too many inner city areas, gangs dominate - if not in numbers then in the power they have over their local community.

Speaking to my borough commander in Waltham Forest there seems to be good evidence to suggest that the gangs were coordinating locations and some of the social media networks during the riots.

And, separate to the riots themselves, we know that gangs can have a disproportionately negative impact on their local area, bringing with them violence and drug abuse and pulling others around them into their destructive cycle.

Those who join the gangs are the product more often of broken families and dysfunctional upbringing.

In turn, they further that process of breakdown by creating no-go areas that make impossible the very things that could help deprived neighbourhoods to rejuvenate.

As products of and creators of social breakdown, their role is hugely influential.

I know this is of relevance in Scotland, particularly areas like East Glasgow where a high concentration of gangs are known to operate in highly deprived neighbourhoods.

But gangs are not just a cause of social breakdown - they are also an important symptom.

In many ways they act to fill a vacuum left by other figures of authority - particularly the family unit.

What these young people fail to find at home they search for on the streets instead.

As Disraeli said:

“Man is made to adore and to obey: but if you will not command him, if you give him nothing to worship, he will fashion his own divinities, and find a chieftain in his own   passions.”

For too many these “divinities” are the gang leaders, and their presence speaks to the absence of something fundamental from our young people’s lives - stability, security and moral guidance.

As the excellent work in Strathclyde shows us our first response must be to deal with the violent and criminal activity of the gangs - but that will only take us so far.

Yes, we will be tough on the gangs.

Of course, where you have gangs leaders who repeatedly commit and foment violence they must be warned of the consequences.

Then the police must deal with them for even the most minor misdemeanours.

But this is only part of the bargain.

If we are to believe, as Robert Owen did, that people are shaped by their environment, then there is a great deal more we need to do.

Because at the moment we are caught in a vicious cycle.

Gangs are shaped by the destructive environment in which their members are brought up, and they in turn breed destruction in their local communities, destabilising families and increasing the chance that future generations will find themselves involved in gang violence.

A criminal response alone fails to deal with the root causes of this merry-go-round.

Again, Robert Owen was right where he explained that:

“instead of punishing crimes after they have permitted the      human character to be formed so as to commit them…”

…we have to instead reach in and break the cycle - and we have opportunities to do it all the way along the chain.

In other words, we have to give people a way out.

As the good projects have shown, being tough on gangs is just one part of the challenge.

Intervening to peel people off from the gangs, and preventing them joining in the first place, is the real task we face.

Early intervention

Of course, as Robert Owen would have agreed, the earlier we get in there the better.

The evidence on the importance of early intervention is overwhelming.

I came together with Graham Allen in 2008 to write a book which established some of the key evidence on this.

In Graham’s subsequent reports for the Government the evidence on early intervention has become incontrovertible.

He cites one piece of research which shows that those boys assessed by nurses at the age of 3 as being “at risk” had two and a half times as many criminal convictions by age 21 as those not deemed to be at risk.

Speaking of the understanding that the character of a child could be moulded from such an early age, Owen asked whether:

“Possessing, then, the knowledge of a power so important…which would gradually remove the evils which now chiefly afflict mankind, shall we permit it to remain dormant and useless, and suffer the plagues of society perpetually to exist and increase?

His was a clear warning that if we fail to get in there early enough to stop young people falling out of the system, then we risk failing altogether.

While much of this area is devolved it remains a common challenge for all nations of the UK.

I know that Graham’s work drew on Scottish examples, such as the rapid reaction model in the Highland region which has been running for the last decade.

The goal in the region has been to get things right for children the first time they are identified as being at risk, so that they don’t appear again later.

And I know that the Finance Committee of the Scottish Parliament backed this principle recently, calling on a shift away from reacting to crises and towards a greater focus on prevention and early intervention.

So this agenda isn’t just cross-party, it crosses Governments.

Evidence suggests that one of the best ways to improve life chances for young children is to link families to trusted local networks and individuals - whether it be family nurse partnerships, health visitors, or something similar.

But much of the responsibility here falls to local authorities.

We know many local authorities already understand the importance of this agenda, and we will increasingly be looking to them to provide the leadership to make sure early intervention initiatives are prioritised.

We need to keep hammering home the message that early intervention offers the best hope for today’s children.


The next step is to think about how we can provide support at the next level - at school age - to stop young people falling off the rails and into the hands of the gangs.

First, we need to keep them off the streets and in our schools, engaged in education and learning key life skills.

The Government is committed to raising the participation age in England, with measures to ensure that all young people continue in education or training until they are 18.

And I know the Scottish Government is guaranteeing education, training or an apprenticeship to all 16-19 year olds.

But the fact is at the moment some young people do drop out, and for those who do, employment rates have deteriorated substantially in the last decade or so.

Back in 2000 around six in every ten 16-17 year olds who were not in full time education were in work.

That figure is now down to around 4 in ten.

A similar trend holds true in Scotland, where around seven in ten were working in 2000, a rate which has fallen to around four in ten now.

And this is by no means just a product of the recession - in fact, by 2008 the level had already fallen to 5 in 10, so it has been on a steady downward trend over the course of the last ten years.

By the time this group comes into the Jobcentre at 18 they have already suffered a wage scar that leaves them behind their peers in the jobs market.

So we need to do everything we can to support young people who are at risk of disengaging, intervening early to stop them weighing heavily on the benefit system in the future.

Innovation Fund**

And that’s what our Innovation Fund is all about.

We’re providing £30 million over the next three years to fund organisations that are able to work with disadvantaged young people to turn their lives around.

And the remit of the fund extends to those aged 14 and 15, helping us get in there even earlier to prevent people falling out of structured training and education, and putting them on track for work in the future.

Key here is the role of social investment.

The idea of the Innovation Fund is to unlock private finance in the pursuit of the social good, getting investors to do something positive for their community while seeing a return on their investment at the same time.

As Graham Allen identified in his second report, social investment could be the key to solving some of our most entrenched social problems, many of which require a significant down payment up front to yield huge savings further down the line.

The Innovation Fund is just the start, but I hope it will be a stepping stone to a smarter approach to social breakdown in the future.

**Universal Credit and Work Programme

Once our young people have left school we then need to make sure they are met by a welfare system that works.

First, it has to be a welfare system which makes work pay, which is why we’re introducing the Universal Credit - a new, simpler payment which will be withdrawn at a clear and consistent rate as people move into work.

In the current system some people lose up to 96 pence in every pound earned through benefit withdrawal.

Would any of us here work at 96% tax rates, especially if we could earn a living without any effort at all?

Just ask yourself - why should we expect behaviours from others that we wouldn’t expect from ourselves?

The Universal Credit is designed to change this, reducing the maximum withdrawal rate and simplifying the way benefits are withdrawn as people move into work to reduce the risks associated with taking a job.

Second, we have to work with people to help them find employment.

Too often people who need help have faced bureaucratic and impersonal regimes, motivated more by the number of boxes ticked than the numbers helped into work.

I hope we’re going to change all this with the Work Programme, a package of support we’re putting around people which is designed around them, for them and with them, and will be delivered by some of the best organisations in the private and voluntary sectors.

But this is going to be tough.

We are going to be dealing with people who have come from families where no-one has ever worked - generation upon generation.

They may be breaking the mould, and that won’t be easy to do.

It’s important that we stay with them and support them as they take that step, and we know that many Work Programme providers will be looking to mentor people once they’ve moved into work to help keep them there - we’ve designed our payments structure to encourage this kind of proactive support.

Work experience and apprenticeships

And of course we know that one of the biggest challenges young people face in finding work is a lack of relevant experience.

That’s why we’re providing funding for 100,000 work experience places over the next two years.

These placements will be for up to 8 weeks, but we’ll provide funding for another month where it’s linked to an offer of an apprenticeship or a job.

And we’ve put in place funding for 250,000 extra apprenticeships over the coming years, with 40,000 targeted specifically at young people on Jobseekers Allowance.

I know that the Scottish Government has also committed to creating some 25,000 apprenticeships a year.

So all the way along the life cycle you have these key interventions that pick people up and stop them falling off track - from early intervention with parents, to keeping kids on track in school, to providing a fair and supportive welfare system, combined with positive work experience, that encourages and helps people into work.  

It’s part of a sewn up process - not so much cradle to grave as cradle to stability, cradle to a productive member of society.


But all this brings me to one of the most important issue of all, and that is the role of the family.

I described earlier how gangs have acted to fill the spaces left by broken families, and how family breakdown has led to a sort of moral vacuum in some areas of society.

While the Government should be there to support people when they face difficulties, we can achieve so much more by providing the support that families need to grow and sustain, giving young people a stable and secure environment to grow up in.

This isn’t about Government interfering in families.

But it is about saying that we have to create a level playing field, reversing some of the biases against families we’ve seen in recent years, as well as making sure that support is available if and when families want to use it.

It is clear that people respond to incentives and disincentives - and currently in the UK there is a damaging financial discouragement to couple formation, despite its stable outcomes for children.

That’s why I intend for our welfare reforms to make an impact on the couple penalty where it matters most - amongst families on the lowest incomes.

Alongside that the Prime Minister has made it clear that we will, in this Parliament, as and when possible and after other considerations, recognise marriage in the tax system.

And we’ve already made some £30 million available for relationship support over the coming years.

But there is further we can go, and that is something the Prime Minister himself made clear in a speech last month.

We are going to apply a family test to all domestic policy from here on.

And I believe we also need to look more closely at how we tackle disincentives to strong and stable couple formation


Perhaps in bringing this value back to our personal relationships, we can start to tackle that damaging culture in our society that I spoke of earlier.

The culture of “live now, pay tomorrow” that permeated our society from top to bottom.

From those at the top of our society it was a case of “do as I say, not as I do.”

Whether in the banking crisis, phone hacking or the MPs’ expenses scandal, people have seen a failure of responsibility from their leaders.

And this failure speaks to a wider cultural development in our society, namely a gradual but consistent move to a culture which values conspicuous consumption over the quality of our personal relationships.

We have seen the growth of a culture in which people are valued in terms of how much they earn, how much their home costs, or how they spend on their holiday rather than how much value they bring to their community.

Only today, a UNICEF report has highlighted the damage that consumer culture is doing to our children’s happiness.

Owen saw some of these influences at work himself, contrasting the scant attention given to the millions of poor and destitute he saw around him to the fact that:

“we hesitate not to devote years and expend millions…in the attainment of objects whose ultimate results are, in comparison with this, insignificancy itself.”

This culture has affected everything.

We hear of people putting off getting married because they cannot afford it - not the marriage itself but the ceremony.

With the average cost of a wedding put by some surveys at something like £20,000, some couples risk getting into debt just to meet the costs.

What seems to have been forgotten is that the point of marriage is love, commitment, and creating a safe environment in which to bring up a family.

As Owen would have said, the ceremony is insignificancy itself.

We should worry instead about the human aspect.


Our task now is to achieve this rebalancing of our society.

For too long the political class have understood that we have a social problem, but considered it a second order issue.

The riots have provided a moment of clarity for all of us, a reminder that a strong economy requires a strong social settlement, with stable families ready to play a productive role in their own communities.

The challenge of our generation is to reforge our commitment to reform society so that we can restore aspiration and hope to communities that have been left behind.