Speech

Transforming lives through welfare and work

New DWP Secretary of State, Stephen Crabb, outlines his priorities on welfare reform.

Good morning.

Thank you Claire [Tickell, Chair, EIF] for that introduction.

It’s a pleasure to be here today at the Early Intervention Foundation to make my first speech as the Secretary of State for Work and Pensions.

I know EIF is absolutely committed to transforming the life chances of the most disadvantaged in our country. In that spirit, I’d like to thank you for the work you do to bring new thinking and a better understanding of the evidence of when and how it can be the right thing to intervene early to change lives.

In particular, I know my department asked you to look at how relationships between parents can impact on children’s lives and what interventions might be effective to help improve those lives. That important review, published last month, contains powerful conclusions which demonstrate why we are making family stability a key part of our life chances strategy.

So I look forward to your continued contributions and getting to know you better in the weeks, months and maybe years ahead.

I thought I would use this important opportunity today to share some early thoughts with you about the kind of welfare system I believe in; and about the challenges that lie ahead as we continue the vital task of reforming welfare actually as part of a broader mission to build a society in which the life chances of everyone are improved.

But let me first take a step back.

One of the things that has struck me since taking over at DWP is the sheer size and scale of the department.

There is no other Whitehall department which connects with as many people, at so many important moments in their lives; there’s no other department which spends as much taxpayers’ money.

It accounts for nearly a quarter of all public sector spending in this country. The DWP budget is more than the entire GDP of the nation of Portugal!

And it is therefore not surprising that it attracts strong and passionate views about how, where and why that money is being spent.

The DWP is a department of big numbers; big data; big statistics.

Each year it processes 5 million benefit claims….

….pays £170 billion in benefits and pensions to 22 million people…. ….receives 47 million calls from the public seeking advice and support…. ….and all of this happens in more than 700 jobcentres and contact centres in all parts of the United Kingdom.

But, as I said in that very first statement in the House of Commons just 2 days after I was appointed, “Behind every statistic is a human being.” It’s something I remind myself of and remind my ministerial team of every day.

Because my overriding vision for the Department for Work and Pensions is that, even amidst all of these big numbers, fundamentally, we should be in the business of people….of individuals….we should be in the business of families.

From the very top of the organisation to the farthest flung jobcentre, the thousands of staff, advisers, Ministers – and especially me as the Secretary of State – should understand that we are in the people business.

Welfare that focusses on people also means we must understand the human impact of decisions we take far better. It means that when we talk about the numbers of people receiving benefits or moving on or off of benefits, we also need to understand at a much deeper level the underlying factors for why those individuals find themselves in a set of circumstances that requires support from the state.

A people business does mean providing financial assistance and support to protect people from poverty who, in their current circumstances, cannot provide for themselves. That I think is the mark of a decent society.

But a people business also means recognising that for a great many of those individuals and their families, those circumstances can change; and those circumstances absolutely do need to change. So a welfare system that does not provide this support and basis for transformation in people’s lives falls far short of what a modern welfare system can achieve, I believe.

So these twin objectives should be at the very heart of every reform and at the centre of our welfare system – vital social protection but also the incentives and support to bring meaningful and positive change to people’s lives.

But our efforts to deliver welfare reform should be just one part of a much broader approach for strengthening society, creating opportunity, and breaking down barriers that entrench poverty and disadvantage.

That’s exactly what we mean when we talk about life chances….a relentless focus – an all-out assault as the Prime Minister calls it – on tackling the root causes of poverty in Britain today….On tackling those things which are undermining social mobility and holding people back from reaching their full potential in life.

This is an area which is really close to my heart.

You see, I believe in a society where it should not matter what street you grew up on… how much your mum or dad earn… or where you go to school….

….the society I believe in is one where everyone has a decent set of opportunities to lead fruitful lives.

Over the past few generations, we have seen some incredible and dramatic changes in society. In some ways, society is almost unrecognisable from just a few decades ago.

Never before has so much information been at the fingertips of so many….

the digital communications revolution has transformed people’s access to information and reduced the real life costs of information, it has broken down cultural barriers and made the world a smaller place.

Never before has university been a realistic option for so many. What was the preserve enjoyed by a small privileged elite has been opened to millions.

Never before have we seen such a decline of social deference.

And the pace of this change has been astonishing. The impact this has had on people has been palpable.

And so with these trends in the way people view society, in education, in the reach of digital communications, the revolution in technology….you could be forgiven for thinking that we should be living in a golden age of social mobility.

But for many, that is simply not the case. Today, far too many people have their life chances determined before they have even had the chance to explore all that life has to offer.

We cannot deliver true social mobility, we cannot help people live their lives to the fullest, without fighting the very real factors that hold people back from reaching their potential.

Yes, we’ve seen some really encouraging progress, with record levels of employment, a huge expansion in apprenticeships – over 2 million since 2010 – and lower youth unemployment.

But we need to do much more. So, during my time at the Department for Work and Pensions, 2 things will go hand in hand – reforming welfare, and a relentless focus on improving life chances.

That means leading a life chances strategy that uses the entire machinery of government to break down some of these barriers to opportunity.

So we will be:

Regenerating estates so children have safe and secure homes where they can thrive.

We’ll be using work experience much more creatively to give young people the encouragement they need to get into further education, employment or training when they leave school.

We’re going to be investing in mental health services to tackle some of the debilitating disorders that can have such a devastating impact on young people’s life chances at a crucial stage in their lives.

And we’ll be supporting those with drug and alcohol addictions to turn their lives around and fully recover.

And I know that these are not new problems. But I think this is a new approach we are delivering. As Chair of the Social Justice Cabinet Committee, I will be leading a more coherent and collaborative government strategy….an approach that mobilises all parts of government to tackle poverty, and improve social mobility for the poorest in our society.

At this point, I’d like to pay tribute to my predecessor, Iain Duncan Smith. Someone who I think will go down as one of the great social reformers of our time. Iain has helped to change the way we as a government look at poverty. He turned the lens on the root causes of poverty rather than just the symptoms and led many important reforms. He has been – and I’m sure will continue to be – a champion for improving the life chances of some of the country’s most disadvantaged people.

All of our life chances work, from the health sector to schools, to decent places to live is vital, but I believe it is a stable home and a family life that gives children the best possible chance.

It is hard to overstate the importance of family. Because no-one can doubt that from a young age, it is the family that helps to define us….

….that tells us who we are and where we’ve come from; it is where we derive our first identity.

Perhaps most importantly, it is from the family that we are first loved and, in turn, we learn to love…

…. where we first learn to fight and to make up….

….and where we first learn to make choices and see the consequences of those choices.

I am not talking about some idealised model of a self-contained nuclear family – society is much more complex than that.

But family is the training ground for life. And a good start provides a great platform for a fruitful life. In contrast, as you well know, family life which is chaotic, violent, broken, damaged, turbulent….

leads so often to a life characterised by educational failure, crime, poverty, and where that cycle is then repeated in another generation. And the impact on the individual, on society, the economy and the welfare budget is massive.

Some have estimated the overall costs of relationship breakdown in our society could be as high as £47 billion. And behind that figure, life chances are squandered.

I know many MPs will see the real human cost of this every week at their surgeries – as I have – with breakdown of relationships often the backdrop to so many of our constituents’ problems.

I don’t think it has to be this way. We believe in the vital and foundational role of the family.

That’s why we have already doubled the funding for relationship support, we have increased the amount of free childcare to support parents and, of course, we are helping families move into work through Universal Credit, which I will come on to in a few moments.

It’s why we have targeted those families that need the most help. Our Troubled Families programme has turned round 120,000 families that had complex and deep rooted problems and we’re extending this to 400,000 more families.

And we’ll go even further, increasing support for new parents with an expanded parenting programme, which will build on the great work of EIF in this area.

If stable family relationships provide the platform, then I believe it is work that provides the economic security and the essential role models which I believe children need to improve their life chances.

Fundamentally, as human beings, we are hard-wired to derive satisfaction from meaningful, fruitful work. Work should be a place where we feel valued – in every sense, where we continue to learn and grow, where we are introduced to new and expanded social networks, a place which is fundamentally good for our physical and mental well-being.

And of course I recognise that for a great many people their own experience of the workplace falls well short of that ideal – but this recognition of the value, the worth of work is very much at the heart of my outlook on welfare reform.

A pound you earn can mean more than a pound provided in welfare.

I have spoken elsewhere about my own personal background and I don’t intend to go over that again here today, but one point I would make about the home life I grew up with was the amazing role model I had of a mother who understood that central importance of work in all its dimensions – for herself personally and for the sons she was raising on her own. That understanding underpinned her own journey from a position of crisis and dependency to a position of ‘economic independence’ – a process which took years by the way.

And I really do believe that a welfare system which does not elevate and reinforce that central understanding of how important work and fruitful activity is for us as human beings is actually very damaging for society.

In 2010, far too many people were being denied those benefits of work. Nearly one in 5 households had nobody in work. Two million children did not see a mum or dad going out to work each day.

There has been much progress since then to restore the value of work within our welfare system. The number of households where nobody works is down over 700,000. The workless households rate in the social rented sector is at its lowest level for 20 years.

Half a million more children are benefiting from having the role model of a parent that works – and the outlook this brings.

The value of this work and the dangers of dependency was something the architect of the welfare state, Sir William Beveridge, recognised and believed in.

His blueprint for the modern welfare state in 1942 was clear about the relationship between welfare and work. Beveridge said:

Getting work … may involve a change of habits, doing something that is unfamiliar or leaving one’s friends or making a painful effort of some other kind. The danger of providing benefits which are both adequate in amount and indefinite in duration, is that men as creatures who adapt themselves to circumstances, may settle down to them.

And he stressed:

The state in organising security should not stifle incentive, opportunity, responsibility

But the welfare system we ended up with was one where: Incentives to work were being undermined. Opportunities to get on were being passed by.

The sense of responsibility people had for their own lives was being eroded.

Financial support for people facing poverty is vital – I always tell my colleagues….never, never underestimate the importance of a family in need getting that support in a timely and effective way – but on its own, cash support is rarely enough.

As a result, people were often trapped in the unfair position of being better off staying put on benefits rather than taking the first steps back into work.

The welfare system I believe in – and I want to see – is one that transforms lives rather than traps them.

One that recognises and responds to the fact that people do have hopes, they do have aspirations, they do want to take opportunities to better themselves and their family.

One that responds to the way real people behave in the real world.

It was out of the destruction and devastation of the Second World War that Beveridge’s principles for welfare were forged.

I want to restore and reinforce some of those founding principles of our welfare state that have maybe over the years have been forgotten or eroded.

So my vision for jobcentres is that they should be far more than places where people sign on and receive out of work entitlements. I want jobcentres to be places of true transformation. Places where motivated and skilled teams are supporting positive change in people’s lives.

And it’s already happening.

One of my early visits in the role was to a Jobcentre Plus in Enfield in North London, where I saw

….work coaches helping young people avoid the clutches of gangs and build a more positive life through work….I saw work coaches supporting people with mental health conditions to get treatment and stay connected to the world of work.

This is vital, life changing support on the front line.

And as part of my vision for the organisation I want those skilled work coaches to be really valued in the public eye, in a similar way that nurses and firefighters are respected and valued – because in terms of life-changing interventions, or crises being tackled what our teams of work coaches are doing and achieving is remarkable.

Whatever and wherever it may be in the department, I want everyone in DWP to go to work each day sharing in my twin objectives – protecting people from poverty and supporting people to transform their lives.

And that is what our reforms are about. In particular, Universal Credit.

Universal Credit is a very real human reform. It’s putting people at the very heart of the welfare system for the first time….It has, I believe, the potential to be the most important public sector change project for decades.

It works with people, recognising that people’s lives and circumstances are different. Universal Credit doesn’t treat a person as a number. It’s about a human being in the jobcentre staying with you as you move into work and progress…. ….coaching you….mentoring you….supporting you.

It also provides the right incentives for people to move into work. William Beveridge, I believe would have supported that.

So I am absolutely committed to leading a continued, successful roll out of Universal Credit. That is a priority for me, as is continuing to embed it as the spine that runs through the welfare system.

And to those who are sceptical of Universal Credit, I just say this: ‘look at the evidence so far’. When you compare those who are already receiving Universal Credit to a similar cohort receiving previous Jobseeker’s Allowance, you will see people on Universal Credit:

  • are spending roughly 50% more time looking for work
  • they are 8 percentage points more likely to be in work
  • and when they are in work, they’re more likely to be earning a higher wage

In the words of the chief executive of the Institute for Fiscal Studies, ‘it is a genuinely radical reform….that will clear up some of the most egregious complexities and disincentives that our benefit system has imposed for far too long’.

This month, we will reach an important milestone. Universal Credit will be available in every single jobcentre in the country for single people making a new claim. The next stage will be the ambitious full rollout, so that every person, in every circumstance, who steps into a jobcentre to make a new claim will be on Universal Credit. That will be my focus in the months ahead.

Universal Credit and our other reforms to support people into work are working.

There are now more than 2 million more people in work than in 2010; with the number of workless households at a record low.

But I know there is more to do to ensure the opportunities of work are available to everyone. The diversity of those in work should reflect the diversity of society.

And that, finally, brings me to an area of reform that is another one of my priorities:

And that is supporting disabled people and people with health conditions into work.

We are making progress. Nearly 300,000 more disabled people have moved into work over the last 2 years.

But despite this, there remains a very significant gap in the employment rate between disabled and non-disabled people. Whilst the employment rate for people who are not disabled is 80%, for disabled people it’s less than 50%.

In the context of a very strong labour market and the millions of people that have moved into work over the last few years, I think that gap is simply unacceptable.

I want to be clear. The employment gap isn’t because of a lack of aspiration on the part of sick and disabled people. We know the majority want to work or stay in work.

Some attitudes held by society have stopped disabled people from moving into work for many decades. So I want to challenge health and care professionals, employers and wider society to break down those barriers.

That’s why on my first day as Secretary of State, I announced to Parliament that I wanted to start a new conversation with disabled people, with their representatives, healthcare professionals and employers.

We need to recognise the role that work plays in supporting good health. And importantly, that a health condition or disability needn’t be a barrier to work.

To do that, the workplace, the welfare system, the health service will all need to work much better together….to help people stay healthy in the first place. If someone gets sick, they need the right support so they can stay close to the world of work and re-join it as quickly as possible.

It’s already clear to me that there are lots of interesting ideas emerging. I look forward, with my ministerial team, to listening to all of the ideas and views and discussing them with disability groups, employers and the health, care and welfare sectors.

Together we have an opportunity to do so much better for disabled people – to improve their health and their opportunities.

And this opportunity to have a decent job and the economic security that comes with a regular wage – as well as all the other positive aspects of being in work I have set out today – I think this should be universal.

As such, I want to make sure this opportunity is available in all communities, in all parts of the country, on every street and in every household, across all sections of society no matter what your background, especially for the poorest.

That’s what our life chances strategy is about.

Children growing up in families where there are healthy and strong relationships are the foundation from which they can be supported to step up and grasp those life opportunities.

I am somebody that does believe the state also has an important role to help transform lives. And I am determined that a restless, innovating spirit of reform should continue to shape my department as we place people at the very centre of everything we do.

Because there is still much more to do to create a welfare system that I think is true to its founding principles.

A welfare system that does protect the most vulnerable.
A welfare system that transforms lives rather than traps them.
A system that treats people as human beings with hopes and aspirations and provides the right support and incentives for those to be realised.

If my department isn’t transforming lives, helping people into work every day, it’s not doing its job.

That’s the welfare system that I believe in. That’s the welfare system people deserve. Thank you.