Below is the text of the speech made by Philip Hunt, Lord Hunt of King’s Heath, to the Third Age Employment Network on 3rd October 2006.
An 80 per cent employment rate. That is the long term aim that the government has set itself – something currently unheard of beyond the volcanic pools of Iceland.
We haven’t just plucked this figure from the ether – whilst our employment rate is already the highest of the G8 countries – we want and need to do more to rise to the new challenges we face. Our aim of an 80 per cent employment rate signals our determination to end social exclusion by offering the opportunity of work to everyone in our society, to provide security in retirement by addressing the dramatically rising dependency ratio between those in employment and those in retirement and to enable us to compete in the world-wide economy.
And to do this we will need to break down the barriers holding back employment opportunities among ethnic minorities, address the problems in employment black spots like some of our inner cities and get more lone parents and people claiming Incapacity Benefit back to work.
And on top of all that we want to see a million more older people in work than we have now.
By building on our past successes, developing our current proposals and changing attitudes and opinions for the future we can achieve what many would call the impossible dream.
Successful Labour Market Policies
We have already shown we can successfully tackle difficult employment problems – there are nearly 2.5 million more people in work today than there were in 1997. In fact, there are more people in work than ever before. The claimant count is falling and we have virtually eradicated long-term youth unemployment, an achievement that some thought was impossible.
We are already achieving success in some of the key areas of our challenging aim of 80 per cent employment. For the first time there are more than a million lone parents in work. We have managed to bring the number of people claiming incapacity benefits down to the lowest figure for 6 years. And we have increased the employment rate among older workers to over 70 per cent – a faster increase than in the overall employment rate. All these things were thought to be difficult if not impossible.
It is these successes that enable us to believe that we can achieve our latest “impossible” aim of an employment rate of 80 per cent.
Health and employment
Clearly a person’s health is going to be a key factor in whether they are able to work for longer. This is true regardless of the person’s age, and health problems or disabilities can act as barriers throughout a person’s working life. The scale of the problem is highlighted by the fact that there are currently over 2.7 million people claiming incapacity benefits and there were 164 million working days lost to sickness last year.
If we are to help as many people as possible to enter into, remain in or return to work, and if we are to truly extend working lives, we need to improve the health and wellbeing of all working age people regardless of their age – making this a real priority for government and society. This is why we launched our Health, Work and Wellbeing Strategy, a cross-government strategy involving DWP, the Health and Safety Executive and the Departments of Health in England, Wales and Scotland.
Through the strategy we are working in partnership with a wide range of partners, including employers, trade unions, insurers and healthcare professionals, to create healthier workplaces, reduce the likelihood of people becoming injured or sick at work and encourage the provision of good occupational health services and enhanced return to work support. There is a need to change public perceptions about the importance of work and links between work and health as well as the perceptions and behaviour of healthcare professionals.
We need to support employers, helping them to better adapt to the challenges of an ageing workforce. We also need to look intelligently and creatively at government services, and particularly healthcare, to ensure that we are delivering the right services for working age people and give these people the priority they deserve.
By taking this action I hope that we are improving the health of older workers; helping them manage chronic health conditions the incidence of which increases with age; helping more people with health conditions find and remain in work; and ultimately help people to work longer and retire healthier.
We are working hard, on a range of fronts, to break down age barriers in employment.
In January this year our Welfare Reform Green Paper outlined our proposals to help people stay in work if and when their situation changes, to support people to get back to work and to help people stay in work through in-employment support.
In the summer, the Pensions White Paper introduces changes to the State Pension Age.
We have been successfully working with employers to promote the clear business benefits of age equality, as well as challenging all the ingrained prejudices.
And we’re backing up our determination to eliminate age discrimination with new legislation.
Welfare Reform Green Paper
Our Welfare Reform Green Paper sets out our proposals for building towards an 80 per cent employment rate. There are specific proposals for people aged 50 and over but each and every proposal has the potential to make a real difference to older people.
As I mentioned earlier, we have ambitious plans to transform workplace health and we have appointed a new Director for Health and Well-Being to work with employers, employees and their representatives and health professionals to ensure that the right support is available at the right time to help people remain in work.
Almost half of the 2.7 million claiming incapacity benefits are aged 50 and over and a third of those have been claiming for ten years or more. That’s just one of the reasons why we are transforming incapacity benefits, building upon the success of our Pathways to Work pilots which have already helped over 25 thousand people into work. Pathways has demonstrated that most people claiming incapacity benefits want and expect to work given the right support.
And Pathways isn’t just an idea, not just a set of statistics, it’s real and it’s making a difference to real people. Jane had been claiming Incapacity Benefit since 1978 because of a back problem and depression. With the support from her specialist Incapacity Benefit Personal Advisor, and help through the Return to Work Credit, Adviser Discretion Fund, Tax Credits and New Deal 50 Plus, Jane started work as a Production Operator after 25 years on benefits.
We are transforming the entire regime of benefits and support with a revised initial health assessment which focuses upon capability and support needs, early support from employment and health specialists and a personally tailored action plan to enable the individual to acquire the skills and support they need to return to employment, and to retain new work.
Our Welfare Reform proposals also, for the first time, will enable older people to access a number of initiatives that have previously only been open to younger people.
For example, at present the New Deal 25 Plus Intensive Jobsearch Activity Period, with its more extensive support, is mandatory for jobseekers aged between 25 and 49, but voluntary for those aged 50 or over. However, this group often fail to take the offer of this help because they’ve grown demoralised about their chances of returning to work.
Therefore we have been running a pilot study since April 2004 to trial mandatory participation in this Intensive Activity Period for people aged 50 to 59.
We are seeing positive results. Where this extra support is given to everyone, more people aged 50 to 59 do successfully leave benefit dependency and return to work. That is why we plan to extend this mandatory help nationally in 2007.
Similarly we propose to bring couples over 50 and claiming Jobseeker’s Allowance into the Joint Claims regime, where we’ll treat each person as an individual jobseeker. This is already required for couples who were born after 1957, and serves to keep both parties in contact with the work-focused help and support available through Jobcentre Plus.
New Deal 50 plus continues to offer help on a voluntary basis to eligible customers and their partners who are aged 50 or over. We estimate that since 2000 the programme has supported over 150,000 people in their return to work, and we’re continuing to look at improvements to the programme, such as aligning the exclusive In Work Training Grant more closely with Information Advice and Guidance providers.
We are also proposing a pilot initiative to test the effects of strengthening New Deal 50 plus by making participation in the programme mandatory at 6 months rather than purely voluntary. By doing this we can test whether more people over 50 can be helped into work in this way.
Additionally, we are working on a project to test the effectiveness of face-to-face guidance for older people in work. We plan to trial the means of giving people information on their options for working up to State Pension Age and beyond, if they wish, to help them plan for a more financially secure retirement..
Pensions White Paper
Increasing the number of older people in work by 1 million is a long term aim. Achieving it will depend on a number of factors, including continued macro-economic stability, the pace of welfare reform, and ensuring we have the right policies in place to reach those most likely to otherwise leave the labour market early.
In the medium term we’ll be phasing in a rise in Women’s State Pension Age from 60 to 65 between 2010 and 2020.
In our recent Pensions White Paper “Security in retirement: towards a new pensions system” the Government announced proposals to raise the State Pension age from 2024 onwards. It is vital that we safeguard the long term affordability of the State Pension.
To ensure people have the opportunity to work to age 65 and beyond they will need greater access to flexible working and later retirement opportunities, and the ability to manage their work and pension income to meet their own circumstances. We have increased the range of choices and financial incentives for individuals to draw or defer their State Pension while they carry on working. Tax rule changes also now allow people to draw part or all of their occupational pension while continuing to work for the same employer, where scheme rules allow. For carers, the majority of whom are aged over 45, there will be a new right to request flexible working from April 2007.
There will need to be behavioural and cultural change around retirement along with changes to the benefit system. Information will be available on the services the Government and others offer to support people in making informed choices.
Working with Employers
There is, of course, one particular barrier that can prevent older people working – age discrimination.
We have been working closely with the business community to drive forward the age agenda. Our Age Positive campaign has been running successfully since 2001; and with business lead organisations our ‘Be Ready’ campaign has been promoting practical guidance on adopting age good practice to employers since Spring 2005. We supported this business-led campaign to reach all 1.4 million employers, offering free guidance material to help employers prepare towards the age legislation. And through the age legislation we have taken the decision to introduce a default retirement age of 65 to make compulsory retirement below that age unlawful, for the first time.
But we must do more. A report by the Chartered Institute of Personnel Development, published last year, found that well over half of respondents had suffered age discrimination at work, and nearly a quarter still used age in recruitment decisions.
Clearly this is an unacceptable situation which cannot be allowed to continue. Since Sunday, as you will all know very well, it has been unlawful to discriminate against anyone on the grounds of age in the field of employment or vocational training. The Age Regulations give individuals important new rights, extend existing rights and remove traditional barriers. We have worked with employer organisations to help prepare employers and have directly contacted all employers three times since May 2005 to help prepare them, and offered free guidance and support.
We will monitor the effects of the default retirement age and review them five years after implementation. Our aim over time is to move to a position where there is no compulsory retirement unless it can be justified by individual employers. We intend to remove the default retirement age as soon as we can show that it is no longer necessary or appropriate.
Default retirement age is not a compulsory retirement age. We will continue to encourage employers to adopt more flexible practices around retirement. I’m delighted to say that my Department, the DWP, has taken the decision to remove its retirement age altogether for staff below the senior civil service. The message is the same for all – it’s time to remove age discrimination from your business.
I am aware that criticism has been levelled at the Government for retaining the development rate of the National Minimum Wage for workers aged between 18 and 21. We have done this to protect younger workers. Our concern is that, if we did not protect the development bands some employers might lay off their young workers. The independent Low Pay Commission share this concern and recommended the introduction of an exemption along these lines last year.
Unskilled, inexperienced young workers are in an especially vulnerable position in the employment market. The exemption will allow employers to take on young workers and use the development bands of the minimum wage, without the fear that this could be unlawful.
For the first time this country’s legislation will give people new rights to protect them from being discriminated against due to their age. Whatever your view of the new law, it represents a major step forward.
To finish, our strategy is not about forcing people to work until they drop. It is to enable older people to continue in work if they want to, stop employers from discriminating against them and demonstrate that people of a certain age should not be thrown on the scrap heap and left there. And as I said earlier, work is generally good for your health and wellbeing and can influence a person’s health when they reach retirement and therefore the quality of that retirement.
We are proud of our achievements over the last 8 years in improving the prospects for older people to stay in, or re-enter work. But we know we can’t take an exclusively “top-down” approach and try to tackle this problem alone. The work of organisations like TAEN, and initiatives like your own Agebusters website, are essential to challenging and removing ageist workplace practices that have been accepted as ‘common sense’ for years.
We’re not complacent. We know that there’s more to be done. And you can be assured that we’ll be working hard to move towards our long term aim of an 80 per cent employment rate and a million more older workers.