Tag: Alan Johnson

Below is the text of the speech made by Alan Johnson, the then Work and Pensions Secretary, to the CBI Pensions Breakfast on 25th February 2005.

It’s a great pleasure to have this opportunity to talk to you this morning – and to be giving my second speech in under 12 hours here at the Birmingham International Convention Centre.

Last night I was presenting the awards for the Birmingham Employer Coalition, celebrating the achievements of jobseekers who had overcome barriers to work and employers who had recruited and developed Jobcentre Plus employees.

I talked about our aspiration to move towards an employment rate equivalent to 80% of the working age population – the progress we’ve made –- and the work that is still needed to break down the barriers that prevent disabled people, lone parents, ethnic minorities and older workers from fulfilling their aspirations in the workplace.

This isn’t just about the individuals themselves. Neither employers, nor society as a whole, can afford to be denied the skills and contributions of all those who are willing and able to work. It makes good business sense and of course, it’s crucial to our ability to meet the challenges of our ageing society.

These challenges are very real. In the UK today, centenarians are the fastest growing demographic group.

Two years from now the number of people over State Pension Age will overtake the number of children. In just over 30 years, the proportion of the population aged 65 and over will increase by 50% while the number of pensioners aged 80 and over will double.

Given this expanding longevity and a lower birth rate, we set up the independent Pensions Commission to identify the extent of the challenge we face.

Whilst making clear that there is no crisis today, they emphasised that we had been living in a fools’ paradise as far as pensions are concerned since the late 1970s – and that this would develop into a crisis in 20 to 25 years time, if we didn’t begin to plan for that future soon.

Yesterday, we published a document which sets out our principles for pension reform and which seeks to establish a national debate as a first step towards building a new consensus on the way forward.

I’d like to focus my remarks this morning on these principles for reform and to say a bit about how employers can work with us – by engaging in this national debate and joining us in forging this new consensus.

Reforming the system to meet the challenges of tomorrow does not mean discarding the strengths of a system that is today delivering better average retirement incomes than any previous generation has ever enjoyed.

Pensioners today are sharing in the growing prosperity of the nation. Between 1996/97 and 2002/03, average pensioner incomes grew by 19%, while average earnings grew by 12%.

Since 1997 we’ve taken radical action to tackle pensioner poverty – lifting 1.8 million pensioners out of abject poverty – and tackling the real pensions crisis that we faced when we came into office.

Over 3.2 million pensioners are now in receipt of Pension Credit – with take-up strongest amongst the very poorest. For those who would otherwise be below the Guarantee element, our best estimate is that take-up rates are running at over 80%. And for single women in this group, take-up could be as high as 90%.

We are starting to change what it means to be old in our society.

Since time immemorial, old age has been associated with poverty – from the workhouse, through the studies of William Booth, to the 1980s when many pensioners had to choose between heating and eating.

But figures from the Institute for Fiscal Studies show that we are now in an unprecedented position where pensioners are no more likely to be poor than any other group in society.

We believe that the prevention of poverty must be a fundamental role for the State – so tackling poverty is our first principle and we will not risk condemning pensioners to the poverty of the past.

The other great strength of today’s system is its sustainability. Sustainable public finances are a pre-requisite to achieving high and stable rates of long-term economic growth and to ensuring that spending and taxation impact fairly between generations.

Our current policies and projections see state pension expenditure remaining broadly stable as a percentage of GDP through to 2050.

This compares very favourably with a number of European countries – who face steep increases in public expenditure over the coming years.

So whilst engaging with ideas for reform, we must ensure that this principle of fiscal sustainability is maintained.

The third principle for pensions reform is coherence. The Pensions Commission observed that the UK has one of the most complex pensions systems in the world, reflecting the cumulative impact of many changes and decisions over the last few decades.

We’ve already made some progress in addressing this problem through the radical simplification of the tax system contained in the Finance Act.

In April 2006 we’ll sweep away today’s 8 separate tax systems for pensions, and replace them with a single regime based on a lifetime limit which will start at £1.5 million, and will rise in stages, faster than the rate of inflation over the next few years.

The layer-cake of regulation – baked in a very slow oven – creates real disincentives. Rights built up over the years need to be recorded and processed separately to reflect the regime in place at the time they were accrued.

This can be a nightmare for employers.

So we must go further with our simplification agenda – especially to make our pensions system easier for people to understand.

Our fourth principle is to seek a broad consensus.

The NAPF claimed a consensus for the idea of a Citizens’ Pension set at £105 a week, replacing the Basic State Pension and the Second State Pension.

But the CBI and many others oppose this – favouring less costly approaches and the maintenance of an earnings-related tier.

So we haven’t ever really had a lasting political consensus that gives people the ability to plan ahead with confidence.

The Pensions Commission provides an opportunity to start to build such a consensus – which we intend to grasp.

Politicians are squaring up for an election so consensus is perhaps a tad unlikely right now – but we can and should steer clear of unaffordable and ill-thought-out promises if we are to avoid a return to the fools’ paradise that the Pensions Commission so graphically described.

There are six principles which we believe should be at the heart of any future reform. I’ve covered four of them so far – tackling poverty, maintaining fiscal sustainability, achieving greater simplicity and building consensus.

The final two are perhaps the most challenging and definitely the most urgent.

Inclusiveness – the opportunity for all to build an adequate retirement income; and

Equitability – producing fair outcomes, in particular, for women.

We have already taken important steps forwards here. The State Second Pension means that nearly 6 million low earners – two-thirds of whom are women – as well as 2 million carers and over 2 million disabled people all have the chance to build up a decent second pension for the first time.

Through the Pension Protection Fund – and other measures in the Pensions Act last year – we have taken radical steps to bolster security and confidence in occupational pensions. This includes offering some financial assistance to those who have lost the most in the past.

Stakeholder pensions and the Sandler products mean more flexibility – for example, people are now free to change provider and to stop and start payments without suffering penalties – particularly important for women and carers.

And our Age Discrimination Legislation and improved terms for State Pension Deferral mean that people have greater opportunity and rewards for working longer.

But we need to do more to make it easier for people to save. We need to work with you, as employers, to explore ways to encourage greater employer pension contributions and sharing of good practice.

Next week I am launching a single Government-sponsored website on Good Practice – resulting from the work of our Employer Task Force.

There is much good practice and much that employers can be proud of in the way they have continued to provide decent occupational schemes in difficult times.

I’m also keen for us to develop auto-enrolment so that 4.6 million workers no longer miss out on the contributions of their employers, unless they actively decide to do so.

And that we should look at whether there is scope for developing more collective products using local or central collection mechanisms – for instance, using the machinery of the National Insurance system, possibly on an auto-enrolment basis, to help people save and to secure lower charges for savers.

Finally, we need to end the current bias against women in the Basic State Pension.

The National Insurance system has delivered poor pension outcomes for women – especially for those who have taken time off paid work to raise a family.

It is a national scandal that on average today’s single women pensioners have an income £24 a week lower than single male pensioners – with only 16% of newly retiring women today qualifying for a full Basic State Pension on the basis of their own contributions.

This can not be right. Beveridge’s vision was for a very different world where men had 50 year jobs and a 40 year marriage to a woman who they expected to provide for.

We need a radical improvement in womens’ entitlement to the Basic State Pension, particularly as pension ages for women are raised to age 65.

One of the key questions that we are asking in launching this national debate is whether the gains from a residency-based eligibility for the Basic State Pension would provide a cost-effective and practical alternative way of improving equity of entitlements.

There are a number of ways we can solve this problem, but solve it we must.

Tackling poverty, maintaining fiscal sustainability, greater simplicity, a new consensus, inclusiveness and equitability – these are the six principles that will be at the heart of any reform.

The Pensions Commission process represents a unique opportunity to establish a consensus behind pension reforms that will last for the long term. It’s an opportunity that we must seize.

The Commission will provide recommendations on private sector pensions in the Autumn.

All the Commission’s recommendations, will be best received in an environment of informed and considered debate.

Ahead of these recommendations, the Government will seek to engage with the public – and all our key stakeholders – over the principles we’ve set out. In this way we hope to achieve a shared framework of criteria within which the recommendations of the Commission and others can be assessed.

I know the CBI will be a major voice in this debate – and I thank you for your time this morning.

Below is the text of the speech made by Alan Johnson, the then Work and Pensions Secretary, to the Age Concern Conference on 1st March 2005.

I’m very pleased to have this opportunity to talk to you this afternoon – at a conference that really captures the full dimensions of the challenge of our ageing society.

We are all seeking to find a way through the welcome problems posed by this challenge. There’s no pre-existing road map for a world where pensioners outnumber children and where the dependency ratio will be 2 to 1.

It’s a world that can often seem strange to people today – because it challenges their assumptions and expectations.

Preparing to meet the new demands of healthier and longer lives is a challenge that has perhaps never been higher in the public consciousness.

Tomorrow’s pensioners will be very different from today’s. They will have lived through technological revolutions rather than World Wars. They will have had to cope with the Smart Card rather than the ration book. They’ll be independent, healthier and have very different political demands.

That we need to act today to build solutions for tomorrow has never been clearer. But the debate about demographic change too often focuses on purely financial issues. How to fund pensions for the longer term – how to enable people to save more for their retirement.

These are crucial questions and it’s absolutely right that pension reform should be key to this debate. But ultimately – as this conference and Age Concern’s report published today make clear – the Age Agenda must be wider than these financial issues. It’s about creating a comprehensive, strategic framework that captures employment and discrimination; healthcare and access to services.

It requires Government to think much more widely adopting a joined-up approach to help older people meet their needs: From Sports Centres – to care homes: From transport –- to the workplace.

And it requires all of us to work together to break down out-dated stereotypes and to explode the myth that ageing is a barrier to a positive contribution to the economy and society – by promoting and supporting work and active engagement in the community.

Much of the Government’s effort in the past seven years has been about protecting the most vulnerable.

Through Pension Credit we have revolutionised the targeting of state support to poorer pensioners. Over 3.2 million pensioners are now in receipt of Pension Credit – with take-up strongest amongst the very poorest.

For those who would otherwise be below the Guarantee element, our best estimate is that take-up rates are running at over 80%. And for single women in this group, take-up could be as high as 90%.

Delivering this change has only been possible because of the hard work on the ground by the Local Service working in partnership with those in the local community.

Effective partnerships need support and a unifying goal. After listening to our customers we launched Link-Age last summer – to build partnerships with local authorities and voluntary bodies around the deceptively simple objective that our customers should have to provide information only once to get their entitlement.

The Pension Service Partnership Fund provides £13 million to finance local initiatives to improve take-up of older people’s benefits – particularly those in hard to reach groups.

The support of Age Concern and other partners has been crucial with for example, Partnerships Against Poverty – in helping to improve the take up of benefits entitlements.

In some cases, improving take-up can make a huge difference. For example, a member of the Local Service in Norwich visited an 85-year-old lady who lived alone in her home to help her complete a Pension Credit application.

Because of a visual impairment she was in receipt of Attendance Allowance and had wrongly believed that this would count as income and prevent her being entitled to any Pension Credit.

Following the Local Service visit she was awarded over £64 a week Pension Credit and a backdated payment of over £3,300.

Many of you in this audience have helped to transform people’s lives through such experiences on a regular basis.

I believe that we are starting to change what it means to be old in our society.

Since time immemorial, old age has been associated with poverty – from the workhouse, through the studies of William Booth, to the 1980s when many pensioners had to choose between heating and eating.

But figures from the Institute for Fiscal Studies show that we are now in an unprecedented position where pensioners are no more likely to be poor than any other group in society.

The prevention of poverty will always be a fundamental role for the State and it’s one of the principles underpinning any future reform of pensions which I set out last week.

But we must go further and wider in our approach – moving beyond the old debates about how to manage dependence and looking to a new world of enabling independence. A world where we have the infrastructure to make ageing an opportunity rather than a threat – encouraging and supporting older people to play an ever greater role in our society.

This means:

– tackling discrimination;

– enabling older people to fulfil their aspirations in the workplace;

– helping them to save for retirement with confidence and in a pensions system that is fair, inclusive and more comprehensible;

– as well as promoting and supporting healthier and more active lives in old age

I’d like just to say a few more words about each.

Firstly, the Government is committed to stamping out discrimination. We will legislate on age discrimination to support our goal of higher employment for all ages.

And our recent announcement of the Equalities Review, examining Discrimination legislation demonstrates our commitment to breaking down the barriers to equality of opportunity in society.

But as with all forms of discrimination – legislation only takes us so far. We all need to work together to achieve a wider cultural change that banishes outmoded attitudes.

For example, generalised stereotypes of people past state pension age as dependent, incapable and vulnerable are a particularly pernicious form of age discrimination. They undervalue the capacities and potential contribution of millions of fit and able people. And by the same token they can inhibit service-providers from focussing properly on those who really need support.

The announcement we made on age equality at the end of last year also took us a long way forward in terms of moving us towards a culture where Retirement Ages are increasingly consigned to the past.

We’re abolishing them for people under 65, and we’re giving those above that age a Right to Request to work past 65 which their employers will have to engage with seriously.

And the review in 2011 – which will look at whether it is time to sweep retirement ages away entirely – is to be tied to evidence on specific social trends all of which are showing that retirement ages are increasingly outmoded.

Empowering older people in the workplace, enabling them to choose to work for longer must be a key part of any response to the ageing challenge. As a society, we can not afford to squander the skills and contributions of anyone who can and wants to work, but who remains outside the labour market.

This was a central theme of the DWP’s Five Year Strategy which was published at the beginning of last month, at the heart of which was a new long-term aspiration of moving towards an employment rate equivalent to 80% of the working age population.

It takes us beyond just helping the unemployed to help those who are even further away from the labour market – who have more complex and substantial barriers to overcome.

It could involve supporting as many as 1 million people on Incapacity Benefit into work, an extra 300,000 lone parents; and 1 million more older workers in the labour force, including many who will choose to work beyond the traditional retirement age.

Some have suggested that we should raise the State Pension Age but part of the challenge that we face in the UK, is to help people to work up to the current State Pension Age rather than setting a new one. For example, statistics show that over 1/3 of men are outside the labour market by the age of 60; 2/3 before age 65.

Our approach is to give people the flexibility and choice to work longer if they want to. State Pension Deferral increases the rewards for choosing to work for longer – introducing an enhanced pension 50% higher for life or a lump sum of up to £30,000 for people who decide to take their State Pension at 70 rather than 65.

And our tax simplification measures also mean that, for the first time, it’s possible to carry on working for the same employer whilst drawing an occupational pension.

Another key dimension, is giving individuals the information they need to enable them to save for their retirement. And we are delighted to be working with Age Concern and Citizens Advice on developing a partnership programme on Informed Choice and Financial Capability.

Through the Pension Protection Fund – and other measures in the Pensions Act last year – we have taken radical steps to bolster security and confidence in occupational pensions. This includes offering some financial assistance to those who have lost the most in the past.

Last week, we set out our principles for wider pensions reform, seeking to establish a national debate as a first step towards building a lasting consensus on the way forward.

It’s good to see this was welcomed by Age Concern, the CBI, TUC and many of our other partners.

As well as building this consensus and continuing to tackle pensioner poverty, we’re determined to ensure fiscal sustainability, while seeking greater coherence, inclusiveness and equitability.

Sustainable public finances are a pre-requisite to achieving high and stable rates of long-term economic growth and to ensure that spending and taxation impact fairly between generations.

In building a long-term solution, we must not be drawn into policies – however appealing today – which will ultimately place an unsustainable burden on future generations.

In respect of greater coherence, we’re seeking to make the system simpler to understand and to make it easier for employers to get on with running good schemes.

With inclusiveness and equitability, we’re seeking to provide the opportunity for everyone to build an adequate retirement income – whether they are low to medium earners; employed or self-employed; and to ensure fair outcomes for all, particularly women.

One of the key questions that we are asking in launching this national debate is whether the gains from a residency-based eligibility for the Basic State Pension would provide a cost-effective and practical alternative way of improving equity of entitlements.

Meeting the ageing challenge is also wider than saving more and working longer – it includes healthcare and access to services.

Good health is the key to a good quality of life and to fully-independent living. This also means continuing to invest in community services, particularly to support family members and other informal carers.

But it’s about more than just health and helping people secure the care they need. We need to tackle the fear of isolation and exclusion that comes from increasing numbers of older people living on their own and feeling unable to influence local decisions.

So achieving real engagement of older people in community decisions, will require enabling them to build alternative networks of support and interest and to contribute their wisdom and skills through voluntary activity.

All these themes will be drawn together in our national Strategy for an Ageing Society and I have been grateful to Age Concern and our other partners for their support with our work on this.

The Strategy will be the first of its kind pursuing the ambitious aim of transforming the challenges of demography into opportunities for our society.

It will look and plan ahead – seeking employment opportunities that are not dependent on age; longer life expectancy with better health; a practical vision of active ageing to support personal responsibility and engagement with the community; and independence and choice in older age with support for those who need it.

It will bring together plans for development and reform into a programme built around achievable outcomes.

It’s a truly cross-Government operation – but it’s far from restricted to Government alone.

Ultimately, delivering the cultural change that is needed to break down old stereotypes means working with Age Concern and all our partners to deliver real opportunity and security for all in later life.

Together we can empower older people and allow society to benefit from what is ultimately one of the greatest advances of our time – longer and healthier lives.

Below is the text of the speech made by Alan Johnson, the then Work and Pensions Secretary, to the ABI Conference on 9th March 2005.

It’s a great pleasure to have this opportunity to speak at the ABI Conference.

The UK insurance industry is a world leader –- the largest in Europe, the third-largest in the world. It has a crucial role to play in the UK economy not least as a major employer, with a third of all financial services jobs – nearly 350,000 people – and as a source of overseas earnings.

And it has a crucial role to play in our society. You only have to look at recent natural disasters such as the Tsunami (where the first life insurance payments were made last month) or the floods in Boscastle last Summer.

In today’s world, we are all more aware of the risks that we face and of the challenges of managing them. I’m grateful to the ABI not just for representing their members so well but for working in partnership with Government to help address so many of these challenges.

One of which is the reform of liability insurance where the ABI’s “Making the Market Work” initiative has helped trade associations and others to access the insurance market more easily. Earlier this week, an ABI survey revealed a dramatic slowdown in the rising cost to employers of liability insurance. And through the new Health and Safety Performance Indicator – which the ABI helped to develop – we’re making it easier for small businesses to improve their management of risks.

And, of course, the ABI’s support has been crucial in addressing the pensions and savings challenge that is now higher in the public consciousness than ever before.

The demographics are stark – two years from now, the number of people over State Pension Age will overtake the number of children. In just over 30 years, the proportion of the population aged 65 and over will increase by 50% while the number of pensioners aged 80 and over will double.

Given this expanding longevity and a lower birth rate, we set up the independent Pensions Commission to guage the extent of the problem we face.

In their first report the Commission said that we had all been living in a fools’ paradise as far as pensions are concerned since the late 1970s – and that whilst there is no crisis now this would develop into a crisis in 20 to 25 years time, if we didn’t begin to plan for that future soon.

The past few years have been a difficult time for all those involved in pensions:

– for the insurance industry re-building trust after pensions mis-selling;

– for companies facing rising costs and soaring pension scheme deficits as the stock market plummeted;

– for the thousands of employees who lost their pensions when their employer went bust, leaving the pension scheme underfunded;

– for Government trying to balance regulation to protect pensions with the need to make it easier for people to save.

The Pensions Commission’s second report will deal with the question of compulsion in occupational pensions. But while there’s still a long way to go to make a success of re-vitalised voluntarism, we’re beginning to see signs that, together, we are turning the corner.

Mis-selling is now increasingly a distant memory. Government and the industry has worked to create a new independent Financial Services Authority, restoring confidence and improving regulation.

Stakeholder pensions and the Sandler suite of products mean a choice of new, low charge products and more flexible and tailored ways in which people can save. Between April and October 2004, contributions to Stakeholder pensions went through the £1bn barrier for the second half-yearly period running.

We’ve lifted 1.8 million pensioners out of abject poverty since 1997.

Through the Pension Credit, we have revolutionised the targeting of state support to poorer pensioners. Over 3.2 million pensioners are now in receipt of Pension Credit – with take-up strongest amongst the very poorest.

For those who would otherwise be below the Guarantee element, our best estimate is that take-up rates are running at over 80%. And for single women in this group, take-up could be as high as 90%.

With an extra £10 billion a year spent on pensioners, we are starting to change what it means to be old in our society.

Since time immemorial, old age has been associated with poverty – from the workhouse, through the studies of William Booth, to the 1980s when many pensioners had to choose between heating and eating.

But figures from the Institute for Fiscal Studies show that we are now in an unprecedented position where pensioners are no more likely to be poor than any other group in society. And we’re beginning to see signs that we are turning the corner with occupational pensions. Company pension schemes are benefiting from a resurgent stock market and an increase in employer contributions.

The FTSE 100 is now back over 5000 points; one survey showed that employer contributions to defined benefit schemes in 2004 were up almost 50%; and other studies show that the value of pension funds last year grew on average by around 10%.

As one recent survey suggests, with over two years of steady growth now behind them, pension funds have recovered most of the losses they sustained during the savage bear market of 2000-02.

And over the longer-term, that stock market risk is actually producing positive real returns – over and above inflation – some 4% over the past 10 years.

But this doesn’t mean we can slip back into our fools’ paradise.

Last week I launched the new occupational pensions regime handing over the Pension Protection Fund and the new Pensions Regulator to the respective Chairs of the new bodies.

In April they will be up and running – moving from vision to reality.

The new flexible and pro-active Pensions Regulator will further bolster security by tackling the risks to members’ benefits while enabling well-administered and secure schemes to continue without unnecessary regulatory burden.

The Pension Protection Fund will mean bringing real security and peace of mind to over 10 million members of defined benefit schemes. For an average cost of £20 per head per year – roughly what one might pay for a fortnight’s holiday insurance – scheme members will get meaningful protection for life.

And through the Financial Assistance Scheme, we are offering some financial assistance to those who have lost the most in the past.

We’ve been able to make some progress in simplifying the system for employers with last year’s Finance Act untangling eight separate tax regimes which have been thrown on top of each other over the years and replacing them with one coherent system.

And the Pensions Act is freeing up the old Section 67, making it possible for businesses to rationalise pension rights into a single system retrospectively; As well as removing the requirement to index Defined Contribution Schemes, and reducing indexation for Defined Benefit Schemes.

There is much further to go – but gradually our joint working in informed choice and financial education is making a difference.

Today’s ABI research shows that people are starting to understand the need to work for longer in order to ensure an adequate income in retirement. And it suggests strong consumer support for our measures which increase choice and flexibility over longer working – whether through the new rule that will allow people to claim their occupational pension while continuing to work for the same employer; Or through improved terms for State Pension Deferral where people can for the first time choose between an enhanced pension 50% higher for life or a lump sum of up to £30,000 for taking their State Pension at 70 rather than 65.

These are small but important steps on the road to a long-term solution which avoids that much heralded crisis in 20 to 25 years time.

At the end of last month we set out our principles for wider pensions reform, seeking to establish a national debate as a first step towards building a lasting consensus on the way forward.

This was welcomed by the ABI, CBI, TUC and many of our other partners.

We’ve never really had a lasting political consensus that gives our citizens the ability to plan ahead with confidence.

The NAPF claimed a consensus for the idea of a Citizens’ Pension set at £105 a week, replacing the Basic State Pension and the Second State Pension.

But the ABI, CBI and many others say that this is too costly and far from the panacea that it is claimed to be.

The Pensions Commission report provides an opportunity to start to build a true consensus – and this is an opportunity we intend to grasp.

I disagree with the doomsayers and scaremongers who proclaim the end of the final salary scheme and claim to hear the death-knell for company pensions.

Last week I was with employers large and small as well as the CBI, TUC, ABI, CIPD and others, at the Employer Task Force launch of the new Good Practice Website –- showing how employers are adapting to the changing economic climate and maintaining their pension commitments. Many of them through innovative hybrid schemes.

We need to spread this best practice and to innovate further – which is why it was important that the ABI led the consortium on the Workplace Information Pilots and why I believe that auto-enrolement could be a powerful tool to be utilised much more widely.

Why is it that 4.6 million people aren’t taking advantage of contributory schemes that their employer provides?

Effectively these workers are turning down the equivalent of a pay rise – and the evidence suggests that this isn’t an informed decision.

Seeking to provide security in a risky world – is about being honest and open about those risks and doing all we can to control them. But the risks are linked to opportunities – whether in investment growth or, the greatest opportunity of them all – longer, healthier lives.

Government has to be prepared to take unpopular decisions and ask difficult questions in order to build the right long-term solutions.

Increasing the retirement age for public sector workers, set for civil servants at 60 around two hundred years ago is one necessary change.

And I believe we need radical reform in order to tackle the scandal of women’s pensions – where on average, today’s single women pensioners have an income £24 a week lower than single male pensioners – with only 16% of newly retiring women qualifying for a full Basic State Pension on the basis of their own contributions.

One of the key questions we are asking in launching the national debate is whether the gains from a residency-based eligibility for the Basic State Pension would provide a cost-effective and practical alternative way of improving equity of entitlement.

I know that an outbreak of political consensus is unlikely in the next few weeks, but we do need a national debate to try to build such a consensus rather than knee-jerk reactions; we do need radical long-term reform not one party solutions that will be altered by future Governments of other political colours; and we do need a mature debate that requires us all to work together to explore affordable, sustainable and innovative approaches that build on the progress we have made in tackling pensioner poverty.

The ABI have already played a crucial role – and I know that I can count on your support in shaping this debate; building this consensus and ensuring that today’s workers, tomorrow’s pensioners, can look forward to a secure, active, independent and less risky old age.

Below is the text of the speech made by Alan Johnson, the then Secretary of State for Work and Pensions, to the New Beginnings Symposium on 15th March 2005.

It’s a great pleasure to be here at the New Beginnings Symposium and to have this opportunity to talk to you on one of the most important political issues of our time.

Making the UK a World Leader in Disability means achieving three things:

– Building legislation that gives disabled people comprehensive and enforceable civil rights

– Creating employment opportunity with personal tailored support for those who want it; and

– Achieving a step-change in public attitudes that empowers disabled people to live independently and to be recognised and indeed respected as equal members of society.

I’d like to say a few words about each.

When we came into office in 1997 – despite 14 previous attempts to bring forward effective legislation – only the most outrageous forms of direct discrimination against disabled people had been outlawed and there was no protection at all for the disabled employees of small firms.

The 1995 Act lounged on the statute book doing very little and with no champion to help people to enforce their rights, or to provide advice and guidance to employers about how to meet their duties.

We’ve created that champion – The hugely successful Disability Rights Commission – and we are now working to ensure that the DRC’s championing of disability remains at the core of the new Commission for Equality and Human Rights.

We’ve also set about implementing the most profound extension of disability civil rights this country has ever seen.

Last October saw protection against discrimination given to an additional 600,000 disabled workers. And it saw a further 7 million jobs and 1 million employers brought within the scope of the employment provisions of the Disability Discrimination Act.

Our current Disability Discrimination Bill – which has its Second Reading in the Commons a week tomorrow – takes us even further. When enacted, the new Bill will extend the coverage of the DDA to at least another 175,000 people – and extend the definition of disabled people to a number of new groups by, for example, removing the requirement that mental illnesses must be “clinically well recognised.”

The Bill will end the anomaly of transport not counting as a service under the DDA and will allow us to set an end-date of 2020 for all rail vehicles to be made accessible to disabled people, including wheelchair users.

It will also place a duty on public authorities to promote equality of opportunity for disabled people. This will be vital in helping to eliminate the institutional disadvantage that many disabled people still face.

For the first time, disabled people can have confidence that their needs will be at the forefront rather than being considered as an afterthought.

For example, local authorities won’t be able to consider closing facilities like libraries or leisure services without thinking first about how disabled people in the area would be affected.

This promotion of equality is central to our vision of a truly fair society offering opportunities for all. And it underlies much of our efforts to empower disabled people to realise their ambitions in the workplace as well as in society as a whole.

Exclusion from the workplace has a damaging impact on individuals depreciating their skills and their self-esteem. It places a financial cost on society and a taxation burden on business – hitting both profitability and competitiveness.

New Beginnings has played an important role in joining together employers and disability organisations.

The business case is now so compelling that employing disabled people can no longer be seen as purely an ethical responsibility – but as a business imperative.

But disabled people need personal tailored support to fulfil their employment aspirations.

Since 1997, through our investment in Jobcentre Plus and the New Deal, we have begun to transform the welfare state from the passive one-size-fits-all inheritance to an active service that tailors help to the individual and enables people to acquire the skills and confidence to move from welfare to work.

The New Deal for Disabled People has seen nearly 55,000 job entries since its launch in 2001. But our other New Deal initiatives – for lone parents and young people for instance – have also been effective.

Altogether, nearly 200,000 disabled people have been helped into work through our total package of New Deal programmes.

And we are seeing very encouraging early results from our Pathways to Work Pilots – cutting edge proposals bringing together Jobcentre Plus, the Health service, GPs and employers to improve the package of support we offer to people on Incapacity Benefit.

The latest Pathways statistics show that the number of recorded job entries for people with a health condition or disability has almost doubled compared with the same period last year; and there are up to six times as many people taking steps to get back into work in Pathways areas compared with the rest of the country. On a national basis this early success would be equivalent to over 100,000 IB claimants being helped into work each year.

All of this has contributed to the rise in the employment rate of disabled people – up 5 percentage points since 1998 to 50.3%. This really challenges the old pre-conceptions because now more than half of disabled people work and therefore a disabled person is, for the first time, more likely to be in work than out of work.

But none of us can rest on our laurels. We believe that any individual who wants to work should have the personal tailored support to fulfil this aspiration.

As a society, if we are to meet the challenge of an ageing population with a falling birthrate, we can not afford to be denied the skills and contributions of those who want to work but who remain outside the labour market.

That’s why my Department’s recent Five-Year Strategy sought to build on the highest employment rate of any G8 country by establishing the aspiration of moving to a new employment rate equivalent to 80% of the working age population.

Central to this strategy, is a fundamental reform of Incapacity Benefit that builds on our investment in Pathways to Work, the New Deal and Jobcentre Plus and focuses on what people can do rather than what they can’t.

Let me make this clear – It’s not about cutting – or time-limiting – benefits. Neither is it about forcing anyone to apply for jobs they aren’t able to do.

It is about enabling people to fulfil their aspirations. We know that up to 1 million disabled people on benefits want to work – our reforms are about giving people a framework of health and employment support and a benefit structure that supports and incentivises them to return to work. It means radically changing the benefit to enable it to reflect all that we have learnt about work aspirations and supporting the needs of those on IB.

The new system will provide a basic benefit below which no-one should fall. A speedy medical assessment linked with an employment and support assessment. Back to work help available to all – with increased financial security for the most chronically sick; and more money than now for everyone else who takes up the extra help on offer.

Such change can only work against the backdrop of a nationally-rolled-out Pathways to Work programme and a ground-breaking partnership with employers and the medical profession:

With the medical profession increasingly seeing work as a route back to good health and encouraging their patients to do likewise; and with employers ensuring good occupational health in the workplace and thinking about the rehabilitation support they make available. We will need to shape these reforms on the basis of the evidence of what works – with piloting playing an important role. And we will consult carefully and thoroughly with all of you.

We intend to publish a Green Paper in July which will allow us to consult formally on our more detailed thoughts in areas such as:

How the new benefit system and the distinction between its different elements will operate

How we can best ensure the individual and their Personal Advisers can frame an action plan which is realistic for the individual and how the Employment and Support Assessment can facilitate this

What people will be required to do in the future to access the higher rates of benefit

What safeguards and appeals processes should be in the system to make sure that the new requirements operate fairly

But right from the start – i.e. today; I am keen to involve you in the shaping of these reforms. And I am particularly interested in starting to develop a consensus around 4 issues.

Firstly – what should be the content of the “return to work activities” that we recognise as beneficial in helping people to get back to work?

Secondly – how can we minimise the risks people face when they want to move into work and ensure people have every incentive possible to take the traumatic first step?

Thirdly, what can we do to signal that being on the Disability Sickness Allowance for the most chronically sick doesn’t mean someone is written off or has no interest in working – but does recognise the severity of their sickness or disability?

Fourthly – what key features does the system need to ensure that it works effectively for people with mental health conditions?

Although the formal consultation won’t begin until the Green Paper in July, I would appreciate people writing to me on these four issues – return to work activities; minimising the risk of moving into work; shaping the signals given by the Disability Sickness Allowance; and enabling the system to work effectively for people with mental health conditions.

Your views will be very helpful and will inform the writing of the Green Paper.

Improving the support and incentives for getting and staying in employment was a cornerstone of the Prime Minister’s Strategy Unit report earlier this year.

This set out an ambitious 20-year strategy to improve the life chances of disabled people by promoting independent living supported by individualised service delivery.

It recommended new ways of ensuring more co-ordinated policy making across Government, specifically through a new Office for Disability Issues, and it sought to enable disabled people to participate in policy design and service delivery.

Our commitment to advance the civil rights of disabled people is not confined to these shores but has an important EU and international dimension.

DWP will be making disabled people’s rights one of the key themes of our presidency of the EU later this year. We’ll be holding a conference here in London dedicated to making a reality of disability rights in all member states and we hope this can be a further stimulus to co-operation between disabled people’s organisations across the 25 countries of the EU.

But ultimately, no Government action, legislative or employment support programme will be sufficient unless it is accompanied by a step-change in public attitudes.

Empowering disabled people is about more than legislation. It’s about people’s equal worth as individuals so that they are not disabled by the preconceptions of others.

This is the great emancipation issue of our time. In years to come, I believe that the mis-treatment of disabled people typical of the last century – and still too often the case today – will be seen as the affront to humanity that it is.

We must all work to raise awareness of rights for disabled people; to promote equality and challenge individual and institutional attitudes that threaten our vision of a society of equal rights and opportunities for all.

This is a vision worth fighting for. It’s a vision that I believe we are making significant progress towards. And it’s a vision that together we can deliver. Making this vision a reality will truly make the UK a world leader in disability issues.