Our long-term economic plan is working. Last year we were the fastest growing major economy in the world. We’ve created a thousand jobs a day. There’s a record number of businesses in Britain. The pistons in our factories are firing……the orders in our companies are rising……the plan is working.
And our vision for the next Parliament is turning this long-term economic plan into a plan for you. It’s about more people starting their first day of work. More parents putting their children to bed at night knowing they can provide for them. More young couples picking up the keys to their first flat. More teenagers doing apprenticeships that will set them up for life. More people retiring not with worry about the future – but with real security. This is a plan to be felt in people’s pockets and homes and hearts and hopes.
It aims to re-draw the rules in this country……so that hard work is rewarded……so that those who put in, will get out. Achieving this vision is impossible without a welfare system that truly works……and that’s what I want to talk about today. We’ve already come a long way.
The system we inherited was a national disgrace. After 13 years of a so-called ‘progressive’ welfare system, we had almost 2 million children living in workless households. The number of households where no member had ever worked nearly doubled. I don’t call that progress. I call progress 1.75 million more people in work. I call progress 900,000 fewer people on the main out-of-work benefits. I call progress employment rising from Scotland to the South West; from Wales to the North East; from the North West to the West Midlands.
That is the progress we’ve made– and today is about where we go next. I want to talk about what the next Conservative Government would do……and the principles that underlie our plans. Before we go into that, there are a few myths I want to take on. We’ve heard these myths bubbling away for the past five years……misleading people, sometimes scaring people……and now, nearing the end of this Parliament, it’s time to take stock.
First – the myth that you can’t reform welfare without hurting pensioners. We have proved that totally wrong. While conducting some of the widest ranging welfare reforms since Beveridge, we have ensured the best deal for pensioners for a generation. It’s a fair deal for those who save – with a new State Pension that gets rid of the complexity, the confusion and the old means test……so that hardworking people know it’s safe for them to save.
It’s a fair deal for all pensioners – with a triple lock that says pensions rise according to whichever is the highest……earnings, inflation or 2.5 per cent. And so it’s more generous – with the State Pension increased by £800 so far. These reforms mean dignity and security for everyone reaching old age……and they show decisively that you can reform welfare and protect pensions at the same time.
Myth two went like this. You can’t reform welfare because there aren’t enough jobs for these people to go into. It’s the argument that it’s not fair to ask people to do more to find work –because there isn’t much work to go around. Again that’s been blown out of the water. More people in work than ever before. More women in work than ever before. More older workers than ever before. More private sector workers than ever before.
Go online, open the papers and you will find a record number of vacancies. There are around 700,000 vacancies at any one time. And those new jobs are not all part-time or zero hours as some would have it –quite the opposite.
In the last year, over 80 per cent of the rise in employment has been people working full-time. As for zero hours contracts – they account for less than one in twenty of all jobs. So there is the work – and it’s decent work – for people to take. The third myth is perhaps the most pernicious. That welfare reform just hits the poorest– changing their lives for the worse. This usually comes from people who say the answer is spending more money……who oppose every change……and who defend everything that came before.
I would ask them: is it compassionate to leave people on the dole for years with no incentive to get into work? Is it big-hearted to leave people on sickness benefit without checking if they can work, if given the right help? Is it kind to sentence people to never going anywhere……of letting people in their teens and twenties sit at home all day slipping into depression and despair? No. No-one wants that life for their own child or their own friend……why would anyone want it for millions of people?
The right thing to do – what I want to do – is break this cycle, change lives and actually tackle poverty – and that’s what our reforms are about. And I tell you: when you meet people who have just got into work after a long time unemployed……you see what this is all about.
The pride. The purpose. The self esteem. It is there in people’s faces. Yes, we need to reform welfare to save money, but this is also about changing people’s lives……and that is why whatever the flack we got – we have got to see this through. So let me turn to next steps. We are guided by a few simple principles – and the first one is this: Work must always be rewarded. This goes right to the heart of our vision for Britain. As a Conservative – I instinctively look up to those who work hard and who put the hours in……and I passionately believe in reward for effort.
For years we had the opposite. You tried to come off welfare – you didn’t take more money home. You tried to earn a wage – and after all the benefit withdrawals and tax, you ended up hardly better off than when you started. Say you were a single mother of two children, working shifts as a carer, trying to claw your way out of welfare. Say you were earning £150 a week.
Under Labour, in some cases, do you know how much of that you would keep, after benefit withdrawal and taxes? 4p in every pound. Four pence. Would you get out of bed on a cold morning for that? No one would. So this is a key, irreducible principle for us: work must always pay.
Our vision is a Britain that rewards work. And we are doing some important things to realise that. We have already capped benefits to £26,000……and the next Conservative Government would lower that to £23,000……because no household should receive more in benefits than the average family earns. We have also announced that we would freeze working-age benefits for two years in the next Parliament……so benefits don’t rise higher than wages, and it pays to be in work.
Most important of all, we are introducing Universal Credit. This is sweeping away all the old overlapping benefits that meant you were better off on welfare. It is replacing the complexities with a single payment – ensuring that from the very first hour you work – you will be better off. And already this is getting results.
New research comparing Universal Credit to Jobseeker’s Allowance shows that on UC, claimants……spend more time looking for work……they move into work more quickly……and they earn more money.
As we announced this weekend, Universal Credit has now started to roll out nationally – and it is set to reach two thirds of all Job Centres by the end of this year. And rewarding work shouldn’t stop with the welfare system itself. Once people are in work, we must keep rewarding them more. We’ve delivered the first above inflation increase in the Minimum Wage since the financial
crisis……and we’re on a trajectory to reach over £8 an hour by 2020. We are cutting the taxes of the lowest paid. Today no-one earning £10,000 pays income tax. Three million of the lowest paid have been taken out of income tax. The next Conservative Government would raise that tax-free threshold to £12,500……meaning no-one working 30 hours on the Minimum Wage will pay any income tax at all.
That is what’s progressive. Not trapping people in a system where you take with one hand and give with the other……but letting them earn, allowing them to keep more of their own money……put simply: rewarding work. The second principle is this: There must be a link between what people get and what people give.
When the welfare state began there was a clear set of values that underpinned it. You would pay in when you can, and if you fell on hard times it was there for you……a safety net that was bound together by common values and mutual contribution. People didn’t tend to take advantage of the system.
But over time those values got eroded. Welfare became a series of giveaways. One of the things people were most frustrated by was the fact that people could migrate to this country and start claiming benefits immediately – despite having never paid in. That was the epitome of something for nothing……and as we have made clear, the next Conservative Government will go into those European negotiations with a clear mandate to change it.
No in-work benefits or social housing unless you have lived here and contributed to our country for a minimum of four years. And then there were the messages we sent young people in this country. You could leave school, sign on, start getting your benefit, start getting housing benefit……and the contribution you were asked for was minimal.
Turn up every couple of weeks and sign on – tick the boxes, no questions asked. No CV? No problem. No real effort put in? No problem. And all this had a corrosive effect. For those paying for welfare – it infuriated them. For those dependent on welfare – it infantilised them. Because people don’t just live up to expectations – they live down to them too.
If you give people nothing to work for, no responsibilities to uphold – they’re going to lose the ability to stretch themselves and find work. So we came in with a mission to re-set the messages we are sending young people. Our goal is effectively to abolish long-term youth unemployment. That well-worn path – from the school gate, down to the Job Centre, and onto a life on benefits – has got to be rubbed away.
To achieve that we have set a bold expectation: When you leave college, you should either be earning or learning. Doing an apprenticeship, studying at university or college, or doing a job. And the right incentives have got to be there to encourage this. We’ve already said that with a Conservative Government – save in exceptional circumstances – it will only be possible for a young person to claim Housing Benefit when they move out if they have a job.
Access to Jobseeker’s Allowance for 18-21 year olds will be abolished and replaced with a Youth Allowance……time-limited to six months……after which you will have to take an apprenticeship, or do daily community work for those benefits. We would use the savings made from all this – and from reducing the benefit cap – to fund 3 million new Apprenticeships……that is 3 million chances of a better life.
And I can announce today that in the next Parliament we would take further steps to make sure young people don’t get sucked into a life on welfare. About 10 per cent of 18-21 year olds who go to the Job Centre to make a claim are what is known in the jargon as “NEETs”. They have not been in employment or education or training for more than six months before they sign on. They drift from school to worklessness to benefits……and not enough is asked of them.
Now of course, the best thing is for young people not to fall into inactivity in the first place……and we are doing a whole range of things to stop that happening……whether it’s raising the education age, increasing apprenticeships or creating the new careers company to give them guidance. But if they have drifted into a life of inactivity, then it’s pretty clear what these young people need. They need work experience. They need the order and discipline of turning up for work each day. So a Conservative government would require them to do daily community work from the very start of their claim, as well as searching for work.
From day one – they must play their part and make an effort. That could mean making meals for older people, cleaning up litter and graffiti, or working for local charities. Your first experience of the benefits system should be that yes, you can get help – but it isn’t something for nothing, and you need to put something back into your community too. The next principle is this. No one should be left behind. Whether you had a bad start in life……or suffer from an affliction that you could beat with the right help……no-one should be written off.
We used to have a system where if you had a sick note from the state – it was often a sick note for life. Indeed there are around one and a half million people today who have been on sickness benefits for more than five years. Now of course, if you have a serious disability – physical or mental – and you really cannot work, then the welfare system must be there for you. But the truth is, there are many people receiving welfare who have treatable conditions.
Today there are 90,000 people in our country claiming sickness benefits for conditions such as drug addiction, alcohol addiction or obesity. Treatable conditions……but right now there is no requirement for them to undertake treatment.
So in a way, the system is colluding in the problem. It’s possible for people to carry on claiming benefits without making any efforts at recovery……and that is effectively condemning them to going round and round in a destructive circle……with no spur or incentive to break out of it.
It would be easy to just forget about these people and keep them on the welfare rolls. The hard thing – and the right thing – is to help them break that cycle. That is why I have asked Dame Carol Black – a world-renowned expert in these issues – to conduct a rapid review. We want to know how we can help these people break the cycle……beat their problems, get back into work and start living more fulfilling lives.
We want to work out how the benefit system can be used to incentivise positive changes in their lives – not just keep them stuck in bad old habits. And yes, that means looking at whether people should face the threat of a reduction in benefits if they refuse to engage with a recommended treatment plan. But let me be clear.
There will not be some magic solution on this. A lot of these situations are incredibly complex……and often there is an overlap with mental health issues to be handled carefully. But I don’t want us to tip-toe around these issues any longer while there are people whose lives are ticking away – and we can help them.
Like I said: no-one should be left behind. The final principle that guides us goes to the heart of what welfare is all about. If you are genuinely sick, and vulnerable, and you need help – you will get that help. The safety net will always, always be there for you – in fact we have made it stronger. The system we inherited was fiendishly complicated for a lot of people to access……and a significant part of the welfare bill went to those who actually could be working with the right support.
We said: let’s make it simpler, let’s get proper objective assessments of whether people can work…..and above all let us direct resources at those who really need it. As someone who knows how much help those with genuine disabilities need, this was very important to me. So we introduced Personal Independence Payments – and today more of the most disabled people get more money.
I repeat: more people with the most serious disabilities are getting the highest level of support. And of course – when it comes to caring for those with disabilities, the reality is not just payments and benefits……the reality is the day-in, day-out caring done by an army of devoted people in our country. The people who are up early and up late……giving their loved ones medications, washing them, cooking for them……in what can be a lonely and unsung role.
We as a country need to do more to recognise Britain’s amazing carers. That’s why as a Government we have protected Carers Allowance – and as part of Universal Credit, it will be easier and more worthwhile for them to work part-time too. We’ve also boosted the resources to give carers breaks from caring – and supported the hospice movement which does so much to help this happen.
All of this is about seeing through that fundamental principle of welfare……that in Britain, if you fall on hard times or are dealt a bad hand – we are here for you. So we’re rewarding work……ending something-for-nothing……making sure no-one is left behind……and looking after those who genuinely need help. And these welfare reforms as a whole do something else too:
Restore real fairness to our country. Our welfare system should be something that unites our country in pride – not that divides it in resentment. But when people worked hard and paid their taxes – knowing that others were choosing to live on welfare……when they saw their money going on social housing they could never afford to live in……or when hardworking young people were stuck living with their parents into their 30s – while others got a council house straight out of school……that created a sense of deep unfairness.
We are putting that right with a clear set of rules that apply to all; a British deal on welfare: If you are in work – you’ll be better off. If you’re out of work and want to – we’ll back you. If you’re out of work and refuse to – we will not keep supporting you. If you’re genuinely sick or disabled – we will be there for you. And if you’ve worked hard all your life – we’ll make sure you have dignity and security in retirement.
Basic, fair, common sense rules……and they come back to what I said on the steps of Downing Street on my first night as Prime Minister. I said we would build a more responsible country. Where we back those who work hard and do the right thing. Where we look after the elderly and frail. Where – I put it – those who can, should; and those who can’t, we will always help.
It’s a long road to building that country. But with every person who moves off welfare into work, we’re getting there. With every teenager who goes into an apprenticeship, and not to the Job Centre – we’re getting there. And that’s why we need another five years.
To finish the job. To change more lives. To secure a better future for you, your family and for Britain.