Tag: Speeches

Below is the text of the speech made by Iain Duncan Smith, the Work and Pensions Secretary, in London on 31st October 2011.

Introduction

It’s a pleasure to be here tonight to celebrate the life and work of Michael Young.

Lord Young was a visionary of our time.

His approach to public service reform was a lesson to us all.

A lesson that we achieve far less from sitting in ivory towers drawing scientific conclusions on public policy…

…and far more from actually listening to ordinary people, understanding their problems, and proposing practical solutions.

I’m also very grateful to the Young Foundation and Grandparents Plus for arranging for me to be here tonight, and I congratulate them on reaching their 5th and 10th anniversaries respectively.

Both organisations are building an honourable legacy for Lord Young.

7 billionth person

I’d like to begin this evening by considering a remarkable fact.

Today, the United Nations announced the birth of the world’s 7 billionth person.

What is notable is that the world’s 6 billionth person – Adnan Mevic of Sarajevo, Bosnia – has only just celebrated his twelfth birthday.

So that’s an extra one billion people in the world, within a space of just over a decade.

Compare that to the fact that it took 250,000 years to reach 1 billion people in around 1800, and over a century more to reach 2 billion in 1927.

The huge population growth we’ve seen in recent decades has given rise to some incredibly young societies.

Take Zambia, where half of the population are under the age of 16.

But there is another side to this story.

For while countries in Sub-Saharan Africa have been getting progressively younger, societies in the West have been ageing at a tremendous rate.

Ageing population

In the last century or so the UK has seen a surge in the retired population relative to those in work.

So back in 1926 – when the State Pension age was first set – we had some nine people of working age for every pensioner.

Today, that ratio is just 3:1, and it will be moving closer to 2:1 by the second half of this century.

Sitting behind this shift are declining fertility rates and huge improvements in medical science, pushing life expectancy inexorably upwards.

Take the fact that a baby boy born today has a one in four chance of making it to 100.

The chance of a baby girl making it to 100 is one in three.

Young versus old societies

In the press coverage of the UN’s Population Report there have been a number of contrasts drawn between these younger and older societies.

When discussing the younger societies, the talk was a “demographic dividend” – a chance for high investment and growth on the back of a young workforce, as long as the right conditions can be fostered.

But when focus turned to the ageing societies the “dividend” became a “liability”, with foreboding descriptions of “disproportionately more old people depending upon a smaller generation behind them”.

This was followed by statistics about how many “dependents” western societies would have in relation to the number of working-age adults.

Ageing challenge

Now I am the first to accept that we face a demographic challenge.

Age-related spending currently accounts for some 12 per cent of GDP, and is projected to grow by around 5 per cent of GDP by 2060.

And I’m certainly concerned for the next generation – a generation that will have to foot the bill for a crippling national debt, at the same time as helping to pay for their parents retirement and trying to save for their own.

But if we continue to use the language of “dependency” to talk about older people in our society then we will get nowhere.

As Michael Young recognised, we miss the point when we arbitrarily cut the life-cycle into standard segments, with:

“People turned into numbers and the galaxy of differences between individuals deliberately ignored.”

We have to look at how we can change things so that older people are no longer seen as a liability, but are more and more involved in society…

…changing the attitudes that push them to the sidelines…

…and recognising the vital roles they must play in the future.

Working longer

So we need to change our attitude to ageing.

Someone of 60 or 65 can no longer be lazily considered as “past it” – such attitudes are patronising and just plain wrong.

When I arrived in the Department, British business could still force someone to retire at 65 even if they didn’t want to.

This process was called the Default Retirement Age.

It led to lazy business practices and a failure to find out how best to use the talent and experience of an older workforce.

As Young eloquently put it, this provision meant that:

“When the clock strikes sixty-five, the   magic wand of the State turns not coachmen into mice but men into old men…[with] no transition. When the wand is waved millions of people have at once to obey”.

Well I am enormously proud that this Coalition Government acted on Young’s admonition and finally consigned the Default Retirement Age to the dustbin of historical discrimination.

But that is only the start.

We need businesses to stop thinking of old people as having a “sell by date”, and to look more closely at the skills and experience they bring with them.

At my Department we’ve been working with employers and employer organisations through the Age Positive initiative, challenging outdated assumptions about older people.

There certainly seems to be a trend in the right direction – the past decade has seen the age at which people leave the labour market increase.

And this is likely to continue, especially once you factor in the changes we’re making to the State Pension age – changes that are difficult but necessary, given how much life expectancy has changed since the State Pension age was first set.

But to keep all of these changes on track, we have to challenge the damaging claim that older workers block employment opportunities for young people.

This is a fallacy, based on the idea that there is a fixed amount of work available in the economy.

In actual fact, evidence from both the UK and abroad suggests that this is far from the case, and that having more people in work is likely to increase the availability of jobs through the effect it has on growth.

Work-sharing

Nonetheless, I wonder if there is more society could do to match the work of younger and older people.

For example could UK businesses look more intelligently at sharing work between older people…

…who may be looking to do fewer hours…

…and the young, who are keen to start getting some experience?

I understand that Germany has some experience with intergenerational mentoring, where older people work with young school leavers to help them find their way into employment.

I leave this to the social innovators out there – the Michael Youngs of today – to think about some more.

Older people caring

But this isn’t all about work.

Far from simply being members of the labour force, the role that older people can – and in many cases do – play in wider society, is enormous.

Whether it be volunteering, providing social care, or looking after grandchildren, we all gain hugely from the time and commitment that many older people give.

We ignore this at our peril.

Though the vast majority of older people give their time willingly…

…and indeed get great pleasure out of doing so…

…we should not forget that many of the jobs they undertake would otherwise fall on the state.

This is family doing what family does best – quietly, with great commitment, carrying out its duties.

But I’ve long believed that the state has become ambivalent about the importance of family structure.

Not just decent parenting but also the role of the extended family.

In an increasingly atomised society, and in a context of growing family breakdown, it is all the more important that we continue to support, celebrate and hold together these wider relationships.

Without them society would simply collapse.

So far from older people being “dependents” supported by the rest of us, it is worth reminding ourselves of the extent to which society is dependent on them.

The economic backdrop

As a country we face an immense economic challenge at the moment.

Sorting out our huge budget deficit and paying off our enormous debt is a priority if we are to restore growth at a sustainable level.

But we also need to recognise that this isn’t all just about economics.

It is also about how families can support each other so that they can take advantage of any work opportunities in the future.

Where possible we’ve tried to design our reforms so that they make this kind of support and caring easier and encourage it where it matters most.

Grandparent Credits and Childcare

This is something my colleagues at the Department for Health and the Department for Education have been working on carefully, from investing money in short breaks for carers to improving GP awareness of carer issues.

And at my Department one of the first changes we made on coming into Government was the introduction of ‘Grandparents Credits’, meaning that those below State Pension age can start building up credits for a State Pension if they are caring for young children rather than working.

This is about recognising the hugely valuable contribution this kind of caring makes to many children’s lives.

I also believe we’ve managed to strike an important balance with Childcare Support through the benefits system.

When we introduce the Universal Credit we’ll be saying – for the first time – that working parents can get help with their childcare costs even when they are working fewer than 16 hours a week.

This is about saying that it should pay to go back to work no matter how many hours you do – and I hope it has the potential to ease childcare responsibilities for the extended family as well as for parents.

Kinship care and conditionality

Another issue that I know has been raised is the conditionality regime in the benefits system.

Kinship carers accessing the benefit system under the new system will fall under the same conditionality rules as biological parents.

But, crucially, there is the flexibility available for the Jobcentre to take their particular circumstances into account.

We want kinship carers to be looked at on a case by case basis.

And the Jobcentre absolutely has the power – indeed the responsibility – to not impose full-time work search and availability requirements on carers of younger children.

There are specific safeguards on this in the Welfare Reform Bill.

Even where work-related requirements do apply, advisers will have broad discretion to limit these, taking account of an individual’s caring responsibilities.

So I hope this strikes the right balance.

But I’m always willing to listen on this kind of thing – and we’re currently talking to kinship care organisations to understand their priorities.

I’ve specifically asked my colleague Lord Freud to look at the kinship carer issue…

…as we have been approached by a number of people on this.

Not just about government

But none of this is just about what government can do.

As I think Michael Young would have agreed, most of the best ideas in the world come from outside Government.

I understand Lord Young pioneered a venture called LinkAge, bringing together older people without grandchildren, and young people without grandparents.

My own colleague Lord Freud has been personally involved for a number of years now with a very similar project known as Grandmentors – something he helped to set up.

And the organisation I founded – the Centre for Social Justice – recently gave an award to a project in Liverpool called ‘Growing Old Together’ which takes young people into care homes and sheltered housing schemes to spend time with the residents and build relationships with them.

This brings me back to the point about atomisation – projects like these can help reconnect the stretched relationships we find in an increasingly mobile and fluid society.

But remember that these important projects have been driven largely from outside Government.

Out there, in our local communities…

…and amongst our social innovators…

…are where the real change will happen.

The change we need if we’re to move from viewing our older people as dependents, to seeing them as one of the lynchpins of our society.

Ageing Well

I’m pleased to say this is something my Department have started to understand.

When we came in to government we launched the Ageing Well programme, which is about driving better services for older people at a local level.

Although this programme was already being considered when we entered government, we were insistent that it needed to be reconfigured so that it drew much more from local knowledge and expertise.

The Young Foundation has been playing a critical role in this project, and I thank them for their continued hard work.

Age Action Alliance

In addition to this we recently helped launch the Age Action Alliance…

…an ever-growing partnership of public, private and civil society organisations…

…which is taking forward a preventative, community based approach to improving the quality of life of the worst off older people.

This hardly involves central Government at all.

We provide a small secretariat, but that is really just facilitating the work of over one hundred organisations who know what works – including a number of those represented here tonight.

Conclusion

So these are some of the areas that we – and society at large – are working on.

But what is more important is that we recognise what each of these different projects means.

A rejection of the idea of older people as dependents, or a burden…

…and an acceptance that we will need to change our institutions to ensure this overarching narrative becomes a reality.

We need to redesign our retirement system so that older people are encouraged to work longer – and are able to do so if they want to.

We need to think hard about the way we recognise and reward caring, so that we don’t lose the invaluable support from friends and family that currently exists.

And we need to work more closely with local groups to redesign projects, products and services so that they are better suited to an older society – and one which is increasingly active.

Lord Young once wrote about the UK as a society that has:

“enjoyed a demographic revolution, even if it has not yet enjoyed it as much as [it] could”.

With the right changes…

…and a firm commitment…

…perhaps we can fulfil Lord Young’s vision…

…and start to enjoy our older society that little bit more.

In fact, maybe now is the time to say that this is the age of the older society.

Below is the text of the speech made by Iain Duncan Smith, the Work and Pensions Secretary, to the British Venture Capital Association on 12th October 2011.

Introduction

It is a pleasure to be here tonight.

I know the economy is on everyone’s minds at the moment.

No more so than in this audience.

Today’s jobs figures are a sobering reminder of the challenge we face.

But before we discuss where the economy is going, I’d like to reflect on where we have come from.

Boom and bust

In the decade to 2008 we saw an uninterrupted period of growth, with employment levels up by over 2 million.

Boom and bust had been eradicated – or so we were told…

Of course we all know what happened when the bubble burst.

But we cannot say that the warning signs weren’t there.

Personal debt had boomed in the years leading up to the recession.

The Centre for Social Justice warned that levels of personal debt were unsustainable in a report published that same year.

Not long after, Northern Rock went to the wall.

And it wasn’t just the banks that were overstretched – it was Governments too.

In fact, the UK had the highest structural deficit of any country in the G7 before the recession started.

Deficit reduction

We were in 2010 that our priority was dealing with this damaging deficit.

And this was a plan that got widespread support – from the OECD, to the IMF, to the CBI.

It also received the support of the Credit Ratings Agencies, with Standard and Poors taking the UK’s Triple A rating off negative watch.

This last step was crucial, and I think we underestimate it at our peril.

While countries across Europe are facing soaring interest rates we have managed to maintain rates comparable to Germany’s, thanks to our consistency in holding the course.

If we deviated from our plan – let’s say we spent just a few billion pounds more – we would face the serious risk of this extra spending being wiped out by billions of pounds more in higher interest costs for families, businesses, and taxpayers.

You simply cannot borrow your way out of a debt crisis.

No complacency

But this does not mean we can be complacent – by any means.

Today’s jobs figures serve as a sobering reminder that while we can protect our own interest rates, we cannot so easily protect against the international economic crisis.

We are riding out a storm at the moment, but it is important that we stay the course.

And it is also important that we do everything we can to stimulate growth.

That doesn’t mean breaking our deficit reduction targets.

It means reducing regulation, freeing up the economy, and getting money moving around the system once more.

So we’re cutting taxes for businesses, reducing corporation tax to the lowest rate in the G7 by 2014.

We’re increasing capital spending on roads and railways, even at a time of deficit reduction.

And we’ve struck a deal with the big high street lenders to increase lending to small businesses by 15 per cent this year.

We have also agreed to the Bank of England undertaking another round of Quantitative Easing…

…and, as the Chancellor confirmed last week, we are looking at whether there is more we can do to get money directly to businesses in the form of Credit Easing.

Private equity and venture capital has an important role to play in this growth story.

I understand that, just last year, private equity and venture capital between them invested some £1.75 billion in high technology companies in the UK.

That’s real money, in the real economy, pushing the technological frontier and promoting growth.

Pensions

But, for me, there is another side to the growth story.

In my role at the Department for Work and Pensions I’m responsible for two of the groups that really matter here: workers and pensioners.

Take pensioners: a significant chunk of our economy is devoted to retirement spending, and so it can have a huge impact.

Our first priority was to secure the position of today’s pensioners.

But we also knew that we needed to reform for the future.

We had a pension system that was increasingly unfunded, and the trend was only set to get worse as life expectancy increased, year on year.

So we were clear that if we were not going to fall back into a debt crisis of a different kind – with the resultant effects on growth – we would need to get the house back in order.

For me this is about asking what kind of society we want for the next generation.

We were heading for one marked by a triple whammy, with our children footing the bill for a crippling national debt at the same time as helping to pay for their parents’ retirement and having to save for their own.

That’s why we are taking the tough decision to ask people to work longer before they receive their State Pension.

And it’s why we are encouraging people to do more to save for their own retirement though automatic enrolment into pension schemes.

Some people have claimed that automatic enrolment is wrong-headed because it will be a drag on growth.

I reject that entirely.

Analysis suggests that automatic enrolment will actually have a positive impact on the economy.

Pension contributions are not somehow lost to the economy.

They are invested in gilts, corporate bonds and equities, supporting increased investment and economic growth.

Social breakdown

So what about the other side I mentioned – the country’s workers?

Britain still has some of the best workers in the world.

But we are increasingly a society divided, because we also have a whole group of people who are cut adrift from the labour market – even from the rest of society itself.

August’s riots forced us – as a society – to take a good hard look at ourselves, and to ask why we had allowed such explosive social problems to become ghettoised.

For these problems have been with us for some time, and were not simply a product of the recession.

More than 4 million on out of work benefits.

One of the highest teenage pregnancy rates in Western Europe.

Over a million children growing up in households with parents addicted to drugs or alcohol.

These were problems that the Centre for Social Justice reported on at back in 2007 – in other words, before the recession started, during a period of unprecedented growth.

This breakdown destroyed our ability to compete in the global market.

The cost of maintaining that many people on benefits was a drag on economic growth and a factor in the growth of the deficit.

And it is now well documented that during this period almost half of the rise in employment was accounted for by foreign nationals.

So potential workers were paid to be idle, rather than being skilled up and supported into employment, while businesses imported workers from abroad to do the available jobs.

Yet much of the money being earned here was being sent back home, so the British economy wasn’t seeing the benefits.

Equally tragic was the human cost – people in communities up and down our country unable to fulfil their potential.

Gangs

This unfulfilled potential takes its most potent form in the street gangs that terrorize many of our poorest neighbourhoods.

In many ways these gangs act to fill a vacuum left by other figures of authority.

Frequently from broken families, gang members seem to be searching for that structure and consistency they are failing to find at home.

Many never make it to the age of 25, yet some of these are really bright kids, just born into the wrong circumstances.

Dealing with Britain’s violent gang culture is vital because the simple truth is that that where gangs rule, decent people cannot live, businesses cannot invest, and communities cannot grow.

What we need is a way out for those who’ll take it and the toughest enforcement against those who refuse.  And, crucially, we have to prevent them joining these gangs in the first place.

Broken welfare system

The first step here is getting to grips with our broken welfare system.

The system is complex, contradictory and incoherent.

It takes people’s benefits away at incredible rates as they move into work, meaning work is frequently not worthwhile.

It treats people more as statistics than human beings – as a box to be ticked or a process to be completed.

And it is racked by fraud and error – some £5 billion lost annually because of the immense complexity of the system.

Reform

So first, we are simplifying things with the Universal Credit, a single integrated payment which will replace an array of benefits and tax credits.

It will be clear, it will be consistent and – most importantly – it will make work pay.

That’s the first vital step for people who have been out of work for a long time.

Second, and equally important, we have introduced the Work Programme, a package of support run by the private and voluntary sectors which provides tailored help to get people back into work.

Crucially, we will only pay for what works.

And we will continue to pay these organisations as they keep people in work.

Third, we know how important experience of work is for young people who are trying to get their foot in the door.

That’s why we have funded an extra 100,000 Work Experience places over the next two years.

And it’s why we’ve committed to an extra 250,000 apprenticeships over the coming years.

Making work pay, skilling people up, building their experience of work – that’s how we can start to rebuild our labour force and keep people off welfare.

The challenge

All of this is vital, but we cannot do it alone.

We have had a great response from businesses to our Get Britain Working campaign.

But I want to know if there is more that the financial sector can do.

I want to know if there are areas where you could get involved that you wouldn’t normally look, or where you are currently underrepresented.

The tragedy is that there are plenty of bright kids out there whose start in life means that they will never end up somewhere like this.

I’ve met many of these young people – and let me tell you, when working with numbers and figures there are some who could leave people in this room standing.

But it’s hard for them to get that first break – take the fact that less than a quarter of all employers in England have given a young person their first job after education.

So I have a challenge for you tonight – a direct challenge to the financial sector to get involved in three areas where we are working with young people.

First, through work experience, giving our young people a chance to get a taste of the world of work.

I understand that few work experience placements are currently available in the financial services sector, and I want to know if there is more that can be done.

Second, through apprenticeships, working with my department and BIS to look at placements which bring young people in, help them learn the trade, and set them up for the future.

This is about giving our brightest young people a shot, even if they haven’t gone through the traditional university route.

It’s about letting them prove to you that they can work hard and better themselves.

And third, we need the financial sector getting involved in the early intervention work that Graham Allen has been driving.

Graham’s reports for Government have shown the incredible impact that intervening early in a young person’s life can have.

He has also shown that where we can turn a young person’s life around, the savings to the public purse are potentially huge.

Take the fact that it costs around £59,000 a year on average for a young offender to be placed in a young offender’s institute, or hundreds of thousands of pounds to support an individual for a lifetime on benefits

The tricky bit is getting the money there up front so that we can reap these savings.

And that’s where social investment comes in.

The idea here is that government encourages private investors to back projects…

…whether it be helping young people back in to work, rehabilitating offenders, or helping a drug addict into recovery…

…by investing in ‘Social Impact Bonds’.

These investors are then rewarded with some of the savings to the public purse further down the line – but only if their investments work.

It is still early days, and this is still a fledgling market.

But I think it is a powerful opportunity.

Sir Ronald Cohen – who will be familiar to many of you as one of the father’s of venture capital – is clear about the possibilities here, stating that:

“Social enterprise and impact investing, in short, look like the wave of the future.”

Indeed, in his view: “Impact [social investment] capital is the new venture capital”.

We are already seeing successful projects getting underway…

…from the reoffending social impact bond in Peterborough…

…to my own Department’s ‘Innovation Fund’, which is currently going through its procurement process.

Yes, Government still has more work to do to provide a clearer direction to the market.

But we also need investors to be willing to take the risk and start getting involved.

Repeat the challenge

So let me repeat: these are the three areas – work experience, apprenticeships, and early intervention – where I ask you to think about reconnecting yourself to some of the most troubled parts of our society.

These are places full of young people who – with the right help, and the right support – could aspire to be where you are tonight.

My challenge to all of you is this: don’t just be a successful business – for all the benefits that that brings to our country, and it really does.

We need you to also be thinking about how you can put something back into your local community to change people’s lives.

Conclusion

So let me bring this back to where I started – the state of the economy, where we have come from and where we are going.

Getting the deficit in down is crucial, and so is the plan for growth.

But we cannot assume that these issues are separate from the social side of things – from welfare, from pensions, from family breakdown, from drug addiction, or from gangs.

Whether it be the cost of paying 4 or 5 million people to sit on out of work benefits while bringing in workers from abroad…

…or the cost of putting the same young people over and over again through the criminal justice system…

…the social side is absolutely crucial to the economy.

It is a terrible waste of resources to have people sat on the margins of society, unable to engage with the system.

Ignoring this has been the mistake that too many Governments have made in the past.

But August showed us was that containment is not an option anymore.

For the riots provided a moment of clarity for us all, a reminder that a strong economy requires a strong social settlement.

Our task is to achieve this rebalancing of society,

Restoring our economy must go hand in hand with restoring society.

I believe that this is the challenge of our generation.

Together, I hope we can rise to that challenge.

Below is the text of the speech made by Iain Duncan Smith, the Secretary of State for Work and Pensions, to the Robert Owen Institute on 14th September 2011.

Introduction

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

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

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

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

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

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

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

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

Social breakdown

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Damaging culture

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

The scenes of our young people ransacking local businesses…

…sometimes proudly displaying their acquisitions on the internet…

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

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

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

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

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

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

Gangs

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

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

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

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

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

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

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

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

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

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

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

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

As Disraeli said:

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

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

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

Yes, we will be tough on the gangs.

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

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

But this is only part of the bargain.

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

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

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

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

Again, Robert Owen was right where he explained that:

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

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

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

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

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

Early intervention

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

The evidence on the importance of early intervention is overwhelming.

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

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

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

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

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

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

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

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

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

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

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

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

But much of the responsibility here falls to local authorities.

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

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

Schools

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

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

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

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

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

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

That figure is now down to around 4 in ten.

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

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

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

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

Innovation Fund

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

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

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

Key here is the role of social investment.

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

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

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

Universal Credit and Work Programme

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

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

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

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

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

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

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

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

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

But this is going to be tough.

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

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

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

Work experience and apprenticeships

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

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

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

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

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

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

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

Family

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

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

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

This isn’t about Government interfering in families.

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

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

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

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

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

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

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

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

Culture

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

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

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

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

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

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

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

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

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

This culture has affected everything.

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

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

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

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

We should worry instead about the human aspect.

Conclusion

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

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

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

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

Below is the text of the speech made by Iain Duncan Smith, the Work and Pensions Secretary, to the Relate Annual conference on 3rd November 2010.

Introduction

Today, I want to talk to you about the importance of family.

There is absolutely no doubt that family life has a huge influence on the very foundations of society – just how important is a sociological lesson we have learned the hard way over the past 25 years.

That is why supporting families sits high on this Government’s agenda.

Indeed, just this Monday evening, I sat down with David Cameron and the Deputy Prime Minister to discuss what more we can do to help through the Ministerial Taskforce on Families and Children – so this is clearly an issue that is taken extremely seriously right at the top of Government.

We are well aware that every family is different.

As a Government, we should not be in the business of prescribing how people live their lives.

Yet we cannot ignore just how crucial families are to both the life chances of an individual and the social fabric of the nation.

So it is right that this Government is committed to supporting people’s desire to build strong, stable families through practical policy measures.

And it is important that we recognise the role of marriage in building a strong society, especially if we want to give children the best chance in life.

We all know that commitment gets tested regularly in every family.

And all the evidence shows that couples who persevere emerge with stronger relationships.

But it can be hard to get through every test without support, which is why I’m delighted to be here today to support the tremendous work done by Relate.

Define the Problem

All the evidence shows that family influences educational outcomes, job prospects, and even life expectancy.

That means that positive, family-friendly policies can bring wide-ranging benefits to society.

But when government abandons policies that support families, society can pay a heavy price.

Take poverty:

lone parent families are more than twice as likely to live in poverty than two-parent families

Or Crime:

children from broken homes are 9 times more likely to become young offenders

and only 30% of young offenders grew up with both parents.

And overall wellbeing:

Children in lone-parent and step-families are twice as likely to be in the bottom 20% of child outcomes as children in married families

So this is not some abstract debate.

Family life affects all of us – what happens on our streets, in our communities, and in our economy.

What you learn from a very early age has a great deal to say about the person you will eventually become and the life you lead.

That is far from saying that your life is determined by your family circumstances.

Many people overcome early difficulty to achieve great things.

But we would be foolish to ignore the weight of evidence that shows just how influential family can be to life outcomes.

Cost of failure

That is why, as the Centre for Social Justice estimates, the cost of family breakdown is £20-24 billion.

And the Relationships Foundation puts the figure at nearer £40 billion.

The fact remains that these are huge numbers – yet they represent just the direct costs.

The costs to society as a whole through social breakdown, addiction, crime, lost productivity and tax revenues are very difficult to quantify – but research suggests they could be up to £100 billion.

Yet, according to research by the Centre for Social Justice, what we spend on the prevention of family breakdown is only around 0.02% of what is spent on dealing with the consequences.

This is something which you at Relate know only too well.

In an era when we are constantly challenged by social breakdown, the family must be placed right at the heart of our solutions.

The real price of family breakdown is measured in the human costs – which is why it is critical we get the right policies in place to support the desire everyone has for a strong, stable family.

That is why we cannot go on ignoring the evidence that working with couples before they break up brings great benefits to their families and society.

People’s expectations of marriage are unsustainable. We have seen expectations rising but understanding falling.

There are people who don’t marry because they cannot afford a ‘fairytale’ wedding. Their attempts to do so can lead them to start their lives together in debt – often a precursor to failure.

There is a need for help to be available to people both pre- and post-marriage.

Which is why I want to pay tribute to you here at Relate and the other guidance organisations who provide such vital services.

Coalition Commitment

The scale of the challenge is huge:

Britain now has amongst the highest divorce and teenage pregnancy rates in Europe

– a recent OECD report, “Doing Better for Children” showed that despite having higher than average family incomes, outcomes for children in the UK are among the worst of all OECD nations

– it also showed that the UK has some of the highest levels of lone parenting and family breakdown

– and the report highlights the very high levels of alcohol and drug consumption among our young.

In 2008/09 we spent over £35 billion on financial support for children and yet 2.8 million children were still living in poverty.

What this tells us is that throwing money at the problem will not solve it.

Overcoming child poverty requires a more strategic approach, where parents, families and their communities are provided with the means and incentives to help themselves out of poverty and give their children the very best start in life.

This is why we need to look more closely at the underlying issues.

The family agenda is being driven by the Prime Minister right from the heart of government.

David Cameron chairs the Ministerial Task Force on Children and Families, working closely Nick Clegg and others, including myself.

All of us across Government are working together to support families and family-friendly Government.

And we are already making progress on many of the Coalition’s commitments:

– raising the income tax personal allowance so families can keep more of the money they earn

– taking Sure Start back to its original purpose of early intervention to help parents who are struggling and increasing its focus on the neediest families

– and putting £7 billion into the Fairness Premium to support the educational development of disadvantaged pupils.

I can tell you that allowing families to take greater control and encouraging people to take personal responsibility is a feature that echoes right across Government policy.

Levers for Change

In my own Department, for example, we are tackling welfare dependency through the Universal Credit system and the new Work Programme to help more people escape the poverty trap.

Welfare dependency is a huge problem in this country.

We have one of the highest rates of workless households in Europe and 2.8 million children living in poverty.

Many of the children growing up in these households without a proper role model simply don’t know what it is to aspire to work – one of the surest routes out of poverty.

As a result, their life prospects are severely curtailed and so the cycle of dependency repeats itself across the generations.

I am determined to help people break that cycle by reforming the welfare system.

Because we can only get to grips with the underlying problems by tackling the pathways into poverty:

– worklessness and welfare dependency

– debt

– addiction

– educational failure

– and family breakdown.

In each of these areas, families lie at the heart of our policies.

Families are also central to our thinking when it comes to the Cabinet Committee on Social Justice, which I chair with the support other senior Cabinet members.

We have already commissioned two Labour MPs to carry out work for this Committee:

Frank Field on Child Poverty and Life Chances, and Graham Allen on early intervention.

We know that progress in these areas will translate into real benefits for other areas of society.

Frank Field is looking at a wide range of issues, including how to help stop poverty becoming ingrained.

He is also looking at how we measure poverty as well as how we address it.

What I can tell you is that many people have told Frank about the importance of preventing family breakdown in the fight against poverty.

I am also looking forward to Graham Allen’s report on early intervention. I know this is something he cares deeply about, because I worked with him on this when I was in Opposition.

What is clear is that the earlier we address the life challenges people face, the more likely we are to solve them.

So Graham will be producing a report about best practice in January, followed by another in May on how to fund Early Intervention programmes.

Here again, when we receive the final reports I hope that we will be able to demonstrate that we are addressing the underlying issues that impact family life – not just the symptoms.

Further interventions

We have to do much more to support families in other areas such as:

– relationship support

– parenting support and education

– family and couple therapy

– therapeutic interventions, for example therapy for post-natal depression, debt counselling and mental health support

– family law advice focusing on prevention, child support and child contact

– helping parents reach their own financial and care arrangements for children following separation

– teenage pregnancy, and

– tackling domestic violence and violence towards women, where a report will be published shortly.

These are all issues that we will be looking at through the Ministerial Taskforce on Families and the Cabinet Committee on Social Justice.

But Government cannot do everything on its own.

We all need to work together on this – faith groups, voluntary organisations, health services, Police, community workers, and all the groups represented here today.

Conclusion

We need your continued support, working with us to build stronger families and communities for the future.

Because if there is one message to take with you today, it is this – no Government can ignore the importance of healthy families.

So we will strive to deliver the family-friendly policies this country needs right from the heart of Government.

I know you have expressed concerns about the ending of the Children and Young Persons Strategic Grant. However, as I said before we want to ensure that our focus is on families.

And the Families Task Force will come forward with suggestions for how we best do that.

In the meantime we have allocated £470 million to support civic society.

We are also reforming the welfare system to make work pay, as well as introducing reforms to pensions and Housing Benefit.

If you accept – as I do – that Government has a role to play, then we must also support the best solutions for families:

– committed, stable relationships with two parents that produce the best outcomes for adults and children

– unapologetic support for marriage, recognising that this provides a sound basis for the majority of long-term relationships, and

– proper support for families under stress to minimise the risk of family breakdown.

This is how we support the strong stable families that strengthen communities and forge a better Britain for everyone.

And Relate must be at the heart of that.

Thank you.

Below is the text of the speech made by Iain Duncan Smith, the Secretary of State for Work and Pensions, to 11th November 2010.

Introduction

Welcome to the Arlington Centre where Broadway provides its key services – projects like this change lives and transform communities long forgotten by others – they prove a better future is possible for people on the margins of society.

My contract

Several weeks ago I set out my contract with the British people.

In the clearest possible terms it says:

If you are vulnerable and unable to work we will support you.  This is our fundamental responsibility in office.

It says this Government is unashamedly ‘pro-work’.  We believe in work and its wider benefits.  We recognise it is the best route out of poverty, and we should always reward those who seek a job.

Thirdly, it was a pledge to deliver fairness for those who fund the system: taxpayers.

So today, based on my contract, this vision and our consultation, I am delighted to publish “Universal Credit: welfare that works”.

The vision: understanding poverty

For me, this programme represents much more than a Ministerial brief or initiative.

My passion for welfare reform, and my desire to fight poverty within Government, has been driven by the stark reality of what I’ve encountered.

As I travelled to many of Britain’s poorest communities I concluded that tackling poverty had to be about much more than handing out money. It was bigger than that.

I could see we were dealing with a part of society that had become detached from the rest of us.

People who suffer high levels of family breakdown, educational failure, personal debt, addiction – and at the heart of all of this is intergenerational worklessness.

Only in understanding this can poverty be defeated.

A Coalition Government for Social Justice

Let me explain why I believe the Coalition can be different.

We recognise both the symptoms and the causes of poverty.

We have Frank Field’s review – let me here pay tribute to Frank’s tireless efforts on poverty throughout his time in Parliament.

We recognise there is no better shield from child poverty than strong and stable families.

And we know that our poorest children should be inspired and equipped to secure a better future.  And here I also want to thank Nick Clegg for his work championing this issue through Government.

As a result of this work we have announced £7 billion targeted early years support for two year olds, and the pupil premium to help the most disadvantaged school children.

We will help people out of debt and utilise the brilliance of the voluntary sector to move addicts into recovery.

And, crucially, we will ensure that welfare works.

Reforming welfare to secure economic growth

To achieve all of this we need fundamental welfare reform.

Some have said recently that it is jobs not reform which is important. But in doing so they miss the point.

Let us take the last 16 years, a period of sustained growth.

63 consecutive quarters, passed from one Government to another.

Around 4 million jobs were created in the UK during this period, and yet some 4.5 million people remained on out of work benefits before the recession had even started.

So inactivity was persistent, despite the unprecedented level of job creation.

That is one of the reasons why around 70% of the net rise in employment under the previous Government was accounted for by workers from abroad.

Businesses had to bring people in from overseas because our welfare system did not encourage people to work.

And there is a deeper tragedy – almost 1.5 million people have been on out of work benefits for nine of the past ten years – during the longest sustained period of economic growth this group of people never worked at all.

So it is not just jobs – something else is wrong.

Our reforms are about reconnecting with that group.

We want them to be able to seize the opportunities of work as the economy grows – even today there are around 450,000 vacancies in the economy, and I want everyone to have the opportunity and support to fill these roles.

In prosperous times this dependency culture would be unsustainable.  Today, it is a national crisis.

The working-age welfare budget has risen by 40 per cent in real terms during the last decade – the decade of growth.

Therefore, I hope the publication of this White Paper sends an unequivocal message that this Government will not back away from necessary reform.

Reforms – headlines messages

I will outline the specifics of our White Paper to Parliament later, but this morning I want to draw out some key ways in which it will deliver the change we urgently need.

First, to those who are vulnerable and unable to work, this White Paper proves we remain absolutely committed to supporting you.

We will continue to provide extra support for those with disabilities, caring responsibilities and children.

Second, for those out of work who are capable of working, our reforms mean it will always pay for you to take a job.

And by unifying out-of-work benefits, Housing Benefit and Tax Credits into a simplified single Universal Credit, we will end the risk and fear associated with moving in and out of work.

But this is a two way street.  We expect people to play their part too. Under this Government choosing not to work if you can work is no longer an option.

That is our contract – we will make work pay and support you, through the Work Programme, to find a job, but in return we expect you to cooperate.

That is why we are developing sanctions for those who refuse to play by the rules, as well as targeted work activity for those who need to get used to the habits of work.

Impacts of reform

These reforms will transform lives.

Some 2.5 million households will get higher entitlements as a result of the move to Universal Credit.

We expect to lift 350,000 children and 500,000 working-age adults out of poverty by the standard measure.

This is just our analysis of the static effects of reform.

Analysing the dynamic effects isn’t easy, but we estimate that the reforms could reduce the number of workless households by around 300,000.

And around 700,000 low-earning workers will be able to keep more of their earnings as they increase their hours.

Third, this White Paper delivers a fair deal for the taxpayer.

We expect to reduce administrative costs by more than half a billion pounds a year, and to reduce levels of fraud and error by £1 billion a year.

And clearly everyone will benefit if we move people off welfare and into work.

Conclusion

These announcements are an important step towards reform.

They aren’t driven by a desire to moralise or lecture.

Instead, they begin with recognition that as a political class we have got this wrong for too long.

Our antiquated welfare system has become a complicated and inflexible mess.  It has been unable to respond to our evolving job market and the changing nature of our workforce.

Society has changed but the benefits system has failed to change with it.

So it is time to bring welfare into the 21st Century.  We want a system which isn’t seen as a doorway to hopelessness and despair but instead as a doorway to real aspiration and achievement.

I don’t say our programme is a panacea.

I can’t say it will change everything.

But I do say it’s a start.

Below is the text of the speech made by Iain Duncan Smith, the Secretary of State for Work and Pensions, in London on 27th May 2010.

Introduction

Good morning.

I am pleased to be here as Secretary of State for Work and Pensions, heading a strong and committed team of Ministers – Lord Freud, Chris Grayling, Steve Webb and Maria Miller.

I would also like to take this opportunity to thank the Permanent Secretary, Leigh Lewis, and his staff for the hard work and dedication they have shown over many years.

Walking around the building I have got some idea of the depth of enthusiasm of the staff who work here. People are keen to be involved in our programme of reform.

In fact, some of the people I have talked to – while in no way commenting on the previous government – have told me that the system they administer with such dedication is indeed breaking and in need of urgent attention.

But then, that is why I took this job.

Poverty Pathways

Six years ago, I launched the Centre for Social Justice, determined to deliver on a promise that I made to a number of people in some of the most deprived areas, that I would work to improve the quality of life of the worst off in Britain.

I had a vision that if people of good will and determination could come together – ignoring party labels and rooted in the most difficult communities in Britain – we could find a way to deliver on that promise.

We wanted to understand the root causes of poverty.

From this starting point, the team refined the work into five pathways to poverty – family breakdown, educational failure, addiction, debt, and the fifth, worklessness and economic dependency.

This, it was agreed, was what drives poverty.

Yet far too often, these pathways have not been reflected in the priorities of successive governments.

You can see that every day right here in London – one of the richest cities in the world where great wealth lives in close proximity to the harsh realities of poverty.

What, perhaps, is most remarkable is the degree of consensus among academics and, most importantly, inspirational leaders and community charities, that we need a new approach to tackling persistent poverty.

How, they asked, can it be right for generations in families to live and die without ever holding down a regular job?

How can it be right that we ask the unemployed to take the greatest risk for the least reward?

And how can we find new ways of breaking the cycle of dependency and re-discover social mobility?

The Problem

I want this Department to be at the forefront of strategy to improve the quality of life for the worst off.

But this will be no easy task. As last week’s poverty statistics showed, the challenge we face is huge.

Income inequality is at its highest since records began.

Working age poverty, after flat-lining until 2004, has risen sharply and now stands at the highest level seen since 1961.

There are more working age adults living in relative poverty than ever before.

Some 5.3 million people in the UK suffer from multiple disadvantages.

And today, 1.4 million people in the UK have been on out of work benefits for nine or more of the last 10 years.

Crucially, this picture is set against a backdrop of 13 years of continuously increasing expenditure, which has outstripped inflation.

The figures show that at current prices, we spent £28bn in 1978/79, excluding pensions.

By 1996/97, the figure was £62bn.

And today (2009/2010), it stands at £87bn, including tax credits, which takes the overall bill to £185bn once pensions are added.

Worse than the growing expense, though, is the fact that the money is not even making the impact we want it to.

A system that was originally designed to support the poorest in society is now trapping them in very condition it was supposed to alleviate.

Instead of helping, a deeply unfair benefits system too often writes people off.

The proportion of people parked on inactive benefits has almost tripled in the past 30 years to 41% of the inactive working age population.

Some of these people haven’t been employed for years.

Indeed, as John Hutton pointed out when he had this job, “Nine out of 10 people who came on to incapacity benefit expect to get back into work. Yet if you have been on incapacity benefit for more than two years, you are more likely to retire or die than ever get another job.”

That is a tragedy. We must be here to help people improve their lives – not just park them on long-term benefits.

Aspiration, it seems, is in danger of becoming the preserve of the wealthy.

The legacy of the system we have today stands at more than 1.5 million people on Jobseeker’s Allowance; almost 5 million out-of-work benefit claimants; and 1.4 million under-25s who are not working or in full-time education. Nearly 700,000 of those young people are looking for a role in life, but cannot find one.

The Economy

We literally cannot afford to go on like this.

The need to reduce costs is shared across the government, but here in DWP we always have to be conscious that we are often dealing with some of the most vulnerable members of our society.

That is why I will be guided throughout this process by this question – does what we are doing result in a positive Social Return on Investment?

In short, does this investment decision mean a real life change that will improve outcomes and allow an individual’s life to become more positive and productive?

That is how we will be guided on every decision.

We have to constantly remind ourselves that we are here to help the poorest and most vulnerable in our society.

So we will require that when we implement a programme it has a clear and evidence-based outcome.

We will also discipline ourselves and ensure that we are not tempted to alter it according to which way the political wind is blowing that day.

Fidelity to the original objective is vital in getting the best value for money for the taxpayer. And if a programme is not cost-effective against that criteria, then we must look at a better way to deliver.

Making Work Pay

To do all this, there are a number of key problems we must address.

One of the first is that for too many people work simply does not pay.

Let’s say someone on benefits is offered a relatively low-paid job.

If you factor in the withdrawal of, say, JSA, plus Housing Benefit and Council Tax Benefit – all at different rates – it means that for too many people they are left with little more income in work than they received on benefits.

Add to that normal costs of travelling to work and the loss of any passported benefits, and you soon start to see why work may not be the most financially sensible option.

For a young person, the situation is even worse since they are usually ineligible for Working Tax Credits.

Worse again for some people, the move from welfare into work means they face losing more than 95 pence for every additional £1 they earn.

As a result, the poor are in effect being taxed at an effective rate that far exceeds the wealthy.

The system has become regressive.

Extremely high effective tax rates also impact lone parents who want to work more than 16 hours a week.

So our current benefits system is actually disinincentivising people from work.

These prohibitive marginal tax rates mean that for some people, work simply does not pay.

We have in effect taken away the reward and left people with the risk.

It is no wonder they are so resistant to finger wagging lectures from government.

I have always believed that choice in life is about that balance and the ratio between risk and reward.

Get that ratio right and positive decision making will become the norm. Life chances will improve considerably and cost savings will follow as well.

The Work Programme

There has been much talk about sanctions. But I believe it is only right that if we are helping people to get back into work, then we also have a right to expect that those we support are ready and willing to take on work if it is offered.

That is why reform of the Back to Work programme is so important.

We will create a Work Programme which will move toward a single scheme that will offer targeted, personalised help for those who need it most, sooner rather than later.

My Ministerial team is working on the details and we’ll be hearing more about the Work Programme in the coming weeks.

But it seems obvious to me that if we know a particular older worker is going to struggle to get back into employment, it is only fair that we try to get them on to a welfare-to-work programme immediately, rather than pausing for 12 months as is currently the case.

A greater level of personalised support also means more people will be work-ready as the jobs market picks up, so over time we will get a higher return on investment, as well as producing greater life changes for the individual.

To make sure we get the best value for money, we will also be changing the framework to bring the ideas and energy of the third sector and the private sector to the forefront of the process.

We will reform the regime so that we properly reward the providers who do best at creating sustainable jobs that help people move out of benefits and into work. But we are not prepared to pay for anything less.

At the same time, we will also make sure the system is fair by ensuring that receipt of benefits for those able to work is conditional on their willingness to work.

So to be fair to the taxpayer, we will cut payments if they don’t do the right thing.

In addition, we will re-assess all current claimants of Incapacity Benefit on their readiness to work.

If people genuinely cannot work, then we will make sure they get the unconditional support they need.

However, those assessed as immediately capable of work will be moved on to Jobseeker’s Allowance straight away.

At the same time, those who have the potential to return to work will receive the enhanced support they need through ESA (Employment and Support Allowance) and the Work Programme.

Again, this is about fairness in the same way as ensuring that we get rid of the jobs tax so that employers are not penalised for giving people a chance to get back to work.

Pensions

The principles of fairness, responsibility and social justice also inform our agenda for pensions.

For example, we are phasing out the default retirement age so that we are not penalising perfectly healthy people who want to keep working and keep contributing.

The idea of someone being fired just because they turned 65 is nonsense.

People who are good at their job and want to work for longer should be able to do so.

In my view, that’s only fair. But of course this policy area rests with BIS, so the detail of how we do this is really their decision.

However, one of the big issues we have to face up to as a society is that we are all living longer and healthier lives.

That has huge implications for the pensions regime.

When the contributory state pension was first introduced in 1926, men were not really expected to live much past their pension age.

In fact, average life expectancy for a boy born in 1926 was just 64 years and 4 months.

By contrast, one in four babies born today will live to 100.

Shifting demographics means that the pensions landscape has changed massively.

That is why we have to make sure that pensions are affordable for the country and that is why we have to increase the pension age.

Another thing we are doing on pensions is to end the rules requiring compulsory annuitisation at 75.

This will simplify some of the rules and regulations around pensions. But it also means we will have a fairer system where people take proper responsibility for the decisions that make best financial sense for them.

And, of course, from April 2011 we are triple-locking the value of the Basic State Pension so that it will rise by the minimum of prices, earnings or 2.5%, whichever is higher.

So if earnings are going up fast, the pension will increase in line with earnings. If prices are going up fast, it will increase in line with prices. And if neither is going up fast, it will go up at least 2.5%.

Next, we also have to find ways to encourage greater personal saving. That means we need a vibrant private system too.

We want to encourage employers to provide high quality pensions for all their employees, and I look forward to working with employers, consumers and the industry to make automatic enrolment and increased pension saving a reality.

Real freedom in retirement comes from planning ahead for the future.

It would be one of the most positive changes we could make in office.

Welfare Reform

The third strand of reform we have set out covers the welfare system and it reflects my determination to make it simpler and more transparent so that work always pays.

We know that work provides the most sustainable route out of poverty, so it is absolutely vital that we get this right and people see a clear link between work and reward.

Less complexity in the system will also save money in administration costs, as well as cutting back on the opportunities for fraud and error.

However, the biggest savings of all will come from putting clear incentives in place to get people back into work and off benefits altogether.

By putting a dynamic approach to benefits in place, we will make sure that individuals and households are always better off in work so that they can take a sustainable path out of poverty.

Challenges Ahead

However, none of this will be easy.

There are major challenges ahead.

Some are technical – for example, how do we link all the various benefit systems that generate such complexity and confusion?

Some are practical – such as working out how we get the best out of the third sector and private sector providers on the Work Programme.

Some of the most difficult challenges will be cultural though. Because for too long, we have discouraged people from taking up their responsibilities as the Welfare State has pushed in to fill the gap where family and society used to function far more effectively.

Conclusion

Social Justice will define my role as Secretary of State at this Department…from jobseekers in our agencies, to families, carers and pensioners.

Indeed, I am pleased to announce today that I will chair a Cabinet Committee on Social Justice with the cooperation of my Coalition colleagues.

My drive is for social justice to run through the fabric of our government, in all that we do.

I also want to reinforce my personal determination to remove the barriers to social mobility and equal opportunity.

And I wish to set out my determination to build a fairer society.

In doing so, let me underline my personal commitment to equal opportunities for all.

This is my commitment to social justice and a welfare system that is fit for the 21st Century.

And I hope that by working together, we can make social justice a reality for Britain long into the future.

The prize is a welfare system that is simple, more efficient and one that helps to restore the social mobility that should be at the heart of British society.

A welfare system that is fit for the 21st Century.

Below is the text of the speech made by Iain Duncan Smith, the Secretary of State for Work and Pensions, to the Institute for Public Policy Research (IPPR) on 7th December 2010.

Introduction

I’d like to thank IPPR for the invitation to speak to you about welfare reform.

It’s important that we have a debate about this.

We currently have:

5 million people on out of work benefits

one of the highest numbers of children in workless households in the whole of Europe

and 2.6 million individuals on incapacity benefits, of which around 1.6 million have been in receipt of benefits for more than 5 years.

And the costs of welfare dependency are unsustainable – the welfare bill has risen by over 40% in the last decade or so.

Complexity

So let me start with an analysis of why we’re in this situation.

First, the system is immensely complex.

A host of benefits, premiums, and allowances interact with each other in a myriad of ways.

And different benefits are delivered by different agencies, making it difficult for people to know who to contact and when.

It’s no wonder the guidance manuals for advisors run to thousands of pages.

Even my officials debate the exact number of benefits – it depends on whether you are counting premiums, additions and so on or not.

Disincentives to work

Once they are on benefits, one of the first questions people ask is whether they will be better off in work.

Too often they find that the answer is no, or only just.

This is because, after a small disregard, benefits are tapered away at a very high rate.

For example, certain lone parents can lose 96 pence of every pound they earn.

Currently around 130,000 people face a marginal deduction rate of more than 90%.

Even worse, around 600,000 individuals face a Participation Tax Rate of over 90%.

For some people choosing not to work is a rational choice.

Long term dependency

And then there is the challenge of long-term dependency.

Many people on Incapacity Benefit suffer from temporary conditions, and could be supported to return to work.

But instead many have remained on the benefit for years, self-esteem often damaged and skills often rendered obsolete.

And we shouldn’t forget that, in 2007/2008, almost half of all claimants who underwent a Personal Capability Assessment for Incapacity Benefit did so by paper-based assessment – they remained on benefit without their condition being assessed in person.

This isn’t about being ‘tough’ on claimants by making them attend face-to-face interviews.

It’s about helping them to keep in touch with the labour market and access the support they need.

And there’s another issue we need to tackle back along the line – we need to do more to stop people falling out of work in the first place and on to sickness benefits.

Principles of reform

So we needed to take a fundamental look at the support being provided – and that is what we have done.

In a sense this is about creating a contract with people.

We have to make the system simple.

We have to make work pay.

We have to help the most disadvantaged to find and take work.

And in return, we expect them to take the work when it is available.

Universal Credit

First, make the system simple and make work pay.

The Universal Credit is at the heart of this.

The Universal Credit will be tapered away at a clear and consistent rate – around 65% before tax – making it easier for people to see how their earnings will change as they move into work.

Clarifying the taper rate will mean that in the future politicians will have to have a more open debate about where they believe the taper level should be set.

Bear in mind that, right now, some people currently lose 96p in every pound they earn.

The Universal Credit will also use variable disregards to allow for different groups, such as lone parents and those with disabilities.

We estimate that the Universal Credit will improve work incentives for around 700,000 people currently in low-paid work, and will pull around 850,000 children and working-age adults out of poverty.

We are now developing our delivery plan for the Universal Credit.

We expect to start introducing the Universal Credit from 2013, testing the system in the Spring before beginning roll-out in October.

From October 2013 all new claims for out-of-work support will be treated as claims for Universal Credit.

And from April 2014 to October 2017 we will work through existing cases.

This will be given the highest priority in my Department, and we are already deploying a strong management team and our most capable and experienced people onto the programme.

There has been speculation about the IT which will be used to deliver this programme.

But the fact is the scale of the IT delivery is similar to that for Employment Support Allowance, which was successfully delivered on time and within budget.

DWP and HMRC are working closely together to ensure the IT required to support Universal Credit is delivered on time, and that customers and employers are transitioned to the new systems in a co-ordinated way.

The timescales we are working to were endorsed by a number of leading IT practitioners at a recent workshop, where the overwhelming view was that with appropriate governance the IT is deliverable in 2013.

The Work Programme

Tackling incentives is important, but it is only one part of the story – we must also offer appropriate work support.

That is where the Work Programme comes in.

We are creating an integrated programme, making the best use of the private and voluntary sectors.

Providers will be paid an attachment fee when a claimant starts on the programme.

Thereafter, they will be paid by results.

We will pay a job outcome fee, rewarding those who manage to get claimants into work.

And, perhaps most importantly, we will pay a sustainment fee, paid to a provider for managing to keep someone in work.

Too often we’ve seen too much churn of people in and out of work. We need to support people as they develop the work habit.

Claimants will be referred to the Work Programme at different times according to the level of support needed.

For example, we expect the majority of customers to be referred after a year, but to make sure we limit wage scarring in the young those aged 18-24 will be referred after 9 months.

Those most in need of support, for example ex-offenders, will be offered early access to the Work Programme to ensure they receive it within a timescale that is most appropriate to them – this could be as early as three months.

IB reassessment

We are also continuing with the previous Government’s plans to reassess those on Incapacity Benefit.

This process is already underway with trial reassessments in Burnley and Aberdeen, and we plan to have reassessed 1.5 million claimants by 2014.

But we know that the Work Capability Assessment isn’t perfect, and that’s why we asked Professor Malcolm Harrington to recommend reforms.

Professor Harrington’s report made a number of helpful recommendations, including proposals for the provision of mental health champions in medical examination centres to help better account for mental and cognitive conditions.

We have accepted all of his recommendations, and will be working closely with his team going forward.

We are also looking to intervene earlier, to stop people falling out of work and on to sickness benefits in the first place.

This is being driven by the Fit for Work Service Pilots, which provide return-to-work services aimed at employees who have been absent from work through ill health for 4-6 weeks.

And when employers need it, they can access professional occupational health advice from national telephone helplines.

Housing Benefit

I know that there will be debates as we take these reforms forward – we’ve already seen that with our changes to Housing Benefit.

But we can’t avoid the facts.

Since 2000, private sector Housing Benefit awards have grown by between 70% and 80%, while average earnings have grown by only 30% to 40%, and expenditure has nearly doubled in cash terms in the last decade.

Without reform expenditure is expected to rise to £24bn by 2014/15.

So taxpayers are increasingly seeing people on benefits living in houses they couldn’t hope to afford themselves.

And, most importantly, there is a growing dependency trap, with people on benefits stuck in housing which they would struggle to afford in work.

So we’ve had to make changes.

But we’ve also made sure the most vulnerable are protected:

We’ve introduced a transitional period for those already on Housing Benefit

We’ve made extra money available for Discretionary Housing Payments

And we have a strategy to drive rents down by temporarily widening discretion for payments to be made direct to landlords.

This isn’t just about creating jobs.

The claim made in response to our reforms is that they won’t work because there aren’t enough jobs for people to move into.

In fact there are jobs even now, in difficult times – Jobcentre Plus alone took around one million new vacancies over the last quarter.

And the Office for Budget Responsibility recently forecast that employment in the whole economy will rise by 1.1m between 2010 and 2015.

But creating jobs isn’t the whole story.

From 1992 to 2008 this country saw 63 consecutive quarters of growth, across two governments, with 4 million more people in employment by the end of that period.

And yet before the recession had even started we had around 4.5 million people on out of work benefits – up to around 5 million today.

But we know that for much of this period of growth the majority of the rise in employment was accounted for by foreign nationals.

This isn’t about pointing the finger – it’s a simple question of supply and demand.

The demand for workers was there, but not the supply.

This is, in a sense, an indictment of our country’s ability to prepare its own citizens for the world of work, or to make work worthwhile.

Our reforms are about reaching the residual unemployed and helping to make sure they are available for work.

Conclusion

These are difficult times, but my concern is that unless we make these changes now, when the economy grows again we will see a repeat story of too many British people written off.

Too many people unable or unwilling to take the work that is on offer, with businesses unable to find what they need in this country and so having to look overseas.

We have to break into this residual group, and start to give them the hope and opportunity that we would all expect.

As I said last night, out there in Smith Square, it has been an immense honour to have led the Conservative party for the last two years.

I very much hope that – as tonight seems likely – my successor is chosen quickly, so that we can all get behind the leader.

The new leader will have my absolute loyalty.

And I encourage all those members of the voluntary party who made me the first leader of the party elected by the grass roots, to also give that leader their whole-hearted support.

From this moment onwards, we must never again allow our own private interests and squabbles to distract us from the task of opposition – the task of exposing this government’s manifold failures and defeating them at the next election.

This speech was planned a little time ago, as the beginning of our great push to communicate the policies we announced at Blackpool.

I decided I wanted to make the speech here at the CPS.

This think-tank has always performed the role of intellectual pioneer for the Conservative Party, and, indeed, for the country…and I could think of a no better place to set out the programme for the first Conservative government of the 21st century – the government I hoped to lead.

Events, you might have noticed, have somewhat overtaken me.

But last night, after hearing the result of the confidence vote, I decided that I would still make this speech.

Because although I will not lead the first Conservative government of this century, I believe I have provided its manifesto, its policy prospectus.

I believe our Party now has an agenda as radical and attractive as that drawn up by Keith Joseph at the dawn of the Thatcher era.

I’d like to take this opportunity to pay particular tribute to Greg Clark and his team in the Policy Unit.

I know Greg has worked closely with the CPS in recent years and I am sorry he isn’t here tonight.

He wisely went on holiday to Mexico at the end of last week!

But he and his team – some of whom I see here – deserve the thanks of the entire party for what they have done.

It is my deepest wish that the policies they have worked on for so long will form the programme of the next Conservative government.

It is a settlement which, after much hard work, has won the support of all wings of the party – but which has lost none of its radicalism in the process.

Tonight I want to talk about four inter-linked principles which I hope Conservatives will continue to stand for, whoever is elected leader – …the principles which will be my legacy to this Party.

The first is the need for a complete renewal of our public services.

The second is the need to place social justice, and concern for the plight of the vulnerable, at the very core of Conservative thinking.

The third is the need for freedom, the rule of law and a strong and competitive economy.

And the fourth is the need to defend the state itself, and the constitutional arrangements of the United Kingdom.

The first task of the next Conservative government must be public service renewal.

Of course, Conservatives were the joint authors of the welfare state.

It was the Conservative health minister in Churchill’s wartime government who drew up the first plans for the NHS.

It was Rab Butler who passed the great Education Act of 1944, ensuring mass education for Britain’s children.

It was Harold Macmillan who, as housing minister in the early 50s, built up the public housing stock.

Conservatives can share the credit for the creation and maintenance of the welfare state… …but we must also take our share of the blame for its failures – and commit ourselves to its renewal.

The era of uniform, comprehensive, state-run services is over.

Consumers are no longer prepared to be told to get what they’re given and be grateful.

The professionals who deliver public services are no longer prepared to be treated like cogs in the machine.

Taxpayers are no longer prepared to be billed, again and again, to pay for the ever-rising cost of a failed system.

If the plans I have laid down are followed by my successor…the next Conservative government will make a real and immediate difference to people’s lives.

Every parent in England and Wales will have a Better Schools Passport, giving them total control over the education of their child.

Every citizen will have a Patient’s Passport, entitling them to free care anywhere in the NHS. And if, for whatever reason, they have to go private, they will get help to do so.

The right-to-buy programme will be extended…so that housing association tenants can also experience the satisfaction and responsibility of home ownership.

We will scrap Labour’s tuition fees for students and stopped their plans for extra top-up fees.

And we will work to end the means test for pensioners and improve and incentivise saving for retirement.

We will begin this process by raising the basic state pension in line with earnings.

All these are radical, feasible, Conservative policies.

They are based on the simple principle of trust.

The welfare state was founded in a period when people were expected to trust the government – not government to trust the people.

We’ll reverse that relationship.

Under the first Conservative government of the 21st century, the state will not be a monopoly provider of education and healthcare.

It will primarily be a funder, and a regulator.

Government will trust teachers and doctors, managers and ministers, to make the decisions about how they work.

Politicians often talk about how much we value our public service professionals. Conservative policies prove we mean it.

Second is my commitment to one nation Conservatism.

A child born into poverty in the first decade of the 21st century is more likely to stay poor than a child born into poverty in the 1950s.

This is a shameful fact.

Sadly, this Labour government – despite its best intentions – has not succeeded in reversing the trend.

Inequality has actually widened under Tony Blair.

Gordon Brown’s notional target of lifting a million children out of poverty has only been met by lifting families from just below the poverty line to just above it.

Persistent poverty – real, grinding hardship – has often got worse under Labour.

For too long the Labour Party have abused a monopoly position on these issues.

Labour have failed to address the material roots of poverty and haven’t even begun to address the relational and spiritual dimensions of deprivation.

But if Conservatives are to become an effective party of social justice we must not just oppose the worn-out approach of the liberal left…

We must also oppose the nihilistic individualism of the libertarian right.

One nation will never be built if public policy ignores some of the leading causes of poverty… Causes like family breakdown and drug addiction.

There is nothing compassionate about weakness in the face of the drug menace.

Social justice will never be achieved if government undermines society’s most basic institution – …the marriage-centred family and the many people of all backgrounds who benefit from its care.

The poverty and crime killing so many communities won’t be defeated if we don’t help young people stay off drugs and recover from their addictions.

That much was made clear to me when I met with a support group for the parents and grandparents of drug addicts in Glasgow.

The faith and courage of the Gallowgate Family Support Group also taught me that drugs can be defeated.

As Jim Doherty of that support group told me – “just give us hope and we will do the rest.” If the Conservative Party has half as much courage as those parents and grandparents, …then we will go forward to the next election with a policy on drugs that does – indeed – bring hope to Britain’s hard-pressed communities.

We will also need courage if we are to do the right thing by Britain’s hard-pressed families. Those who believe that family breakdown is a purely private matter are blind to the enormous public consequences – …as well as the personal consequences for the children to which we all owe a duty of care.

I am personally determined that a hard-headed and open-hearted approach to questions of poverty becomes a central theme of conversation and debate within the Conservative Party.

An effective approach to drugs.

Help for families to stay together.

And a renewal of very local forms of voluntary activity and social entrepreneurship that often succeed where the centralised state fails.

These should be the leading ingredients of one nation Conservatism in the twenty-first century.

My social justice agenda springs from my visit to Easterhouse in February 2002.

That was dismissed by many as a media stunt.

But that visit – and many more to hard-pressed neighbourhoods since – have had a profound impact on me.

If my main legacy to the Conservative Party is a body of policy……my commitment to fight poverty is that body’s beating heart.

In the coming weeks I intend to think carefully about how I, personally, will take that commitment forward.

The third principle I wish to leave my successor is the enduring Conservative commitment to freedom.

Not a freedom that cuts people off from one another…but build communities where no one is held back by a lack of opportunity, and no one is left behind by a lack of compassion.

Today, Britain feels like a place where you need a license to live your life.

Taxes have risen by a half since 1997 – regulations rule every aspect of our lives.

We must cut taxes and red tape.

The next Conservative government must be a low tax government.

It was John Stuart Mill who said: ‘a state that dwarfs its citizens, will find that with small men, no great things can be accomplished’.

Today we are too afraid of risk…the risks that bring reward.

Everything I have been talking about tonight tends to this: we must unleash the creative energies of the British people…to serve themselves, their families and their communities far more effectively than the state ever will.

But there is another freedom – the freedom from fear.

You can’t have a free people without order.

That’s why the fight against crime is a fight for freedom.

Conservative proposals will deliver 40,000 extra policemen and give every local community real control of their local force.

I now come to my third principle of my legacy to the Conservative Party.

Labour has not only undermined the cultural defences of civilisation.

It has undermined the state itself.

It has politicised the civil service.

Eroded civil liberties.

Suborned our once-independent intelligence services.

Neglected the armed forces.

And held in Parliament in contempt.

I have talked about a Government that trusts people.

We also need a Government that people can trust.

Conservatives must restore the integrity of our national institutions – and restore integrity to public life.

Most of all, we must have some honesty about Europe.

Because we are now, truly, at a fork in the road.

It has been the genius of our evolving Constitution that every step forward has been the continuation of an older tradition.

But this is different.

The proposed EU Constitution represents an explicit and total break with the past.

The Constitution gives EU law primacy over UK law, and creates the European Court of Justice as the sovereign legal authority of the United Kingdom …the position previously held by the Queen in Parliament.

This Treaty is something no Government can accept on the authority of its own elected mandate.

The British Constitution is not the property of Tony Blair, to do with as he will.

It is the property of the British people, held by the Government only in trust.

No Prime Minister or Member of Parliament can vote away the basis on which he holds his office or his seat.

So I have established the Conservative Party policy on this question: we are against the European constitution in principle.

Three months ago, in Prague, I set out Conservative policy clearly and simply – and with the support of all wings of the party.

Under the Conservatives, Britain will reclaim exclusive control of agriculture, fisheries and foreign aid.

We will stem the tide of European regulation, and refuse to be part of a common foreign policy or a European army.

And we will retain control of our borders and of our economy.

This is not a blueprint for withdrawal from the EU.

It is a positive step towards the sort of EU which most Europeans want: diverse, flexible, comprising independent states.

We must build a new Europe.

Not a single, unitary and unaccountable super-state …but a loose association of independent democracies, co-operating as they see fit but retaining their sovereign right to run their own affairs.

We must take this vision forward.

A great deal has changed for me over the past two years.

Serving as leader of the opposition meant challenges on a scale that no one who hasn’t done the job can appreciate.

There have been some privileges – but many more problems!

All of this – from the sweet moments of victory to the bitter moments of defeat – have changed me.

I’m still stubborn, and self-opinionated – and I’m still almost always right!

But anyone with a modicum of sensitivity and insight – and I hope I’ve got at least a bit of both – …couldn’t help but be changed by what I’ve seen and done since 2001.

So I’ve got an admission.

I’ve been on a journey.

A political journey as well as one all around this country.

I’ve been appalled by much of what I’ve seen.

In 21st century Britain, children dying of drugs that their parents died of too.

In 21st century Britain, poverty still real.

In 21st century Britain, pensioners trapped in their homes by fear of crime.

On this journey, I’ve been reminded of something that lies deep in the Conservative conscience… …buried too deep for too long……that our party fulfils its greatest purpose when we bring social solidarity by delivering social justice.

The people who taught me this lesson weren’t academics.

They certainly weren’t the national media.

Our party is sometimes accused by the media of being out of touch with modern Britain.

In truth, the whole political class has lost touch with those in greatest need.

Can we wonder that millions despair of politicians – and so opt out of the political process?

My teachers were those often patronisingly described by those on the Westminster scene as ‘ordinary people’.

In Gallowgate and Easterhouse, Hackney and Handsworth…I’ve met extra-ordinary people who fight for the poorest Britons, in communities ruined by drugs and crime.

These remarkable men and women taught me more about leadership than any politician could have.

They are real leaders.

Their strength is their certain belief in the most profound of human qualities – hope, compassion, and a sense of fairness …beliefs derived from real lives, lived on the front line.

The only meaningful freedoms for them are the freedom from fear and want, crime and addiction – they yearn not for license, but for order.

My journey is not a trip to an uncertain future – but the journey home.

To a Conservative home, where the security of family and community bring hope and fairness.

My journey is not over.

My mission will continue.

It is the Conservative mission for fairness…

…true to our inheritance…

…vital for our people…

…worthy of our nation.

Below is the speech made by Iain Duncan Smith, the then Leader of the Opposition, at the Conservative Spring Conference on 16th March 2003.

We are holding this conference with our country on the brink of war.

In the twelve years from the fall of the Berlin Wall to the fall of the World Trade towers, a dangerous idea took hold.

People came to believe that a new world order of peace and security had begun.

They were wrong.

Today, the stakes are high.

Not just for Britain and the United States but for the whole world.

The credibility of the United Nations and the Security Council are at stake.

The relationship between America and Europe is at stake.

Britain’s security is at stake.

Difficult decisions are necessary.

This is not a time to play party politics and I will not do so.

That’s why I’ve backed those who are ready to take on that tyrant Saddam Hussein.

I know some people have doubts;

Of course, no decent man or woman ever welcomes war.

But Saddam Hussein is a real menace to world peace.

He is a monster to his own people.

He has not disarmed despite twelve full years of second chances.

And he’s not disarming now.

John F Kennedy – at the height of the Cuban Missile Crisis – said, “Our goal is not the victory of might, but the vindication of right.

Not peace at the expense of freedom, but both peace and freedom”.

He warned: “The greatest danger of all would be to do nothing.”

That warning echoes across the decades.

It calls us to duty.

No one understands duty more than those who serve in our armed forces.

I had the privilege to visit them in Kuwait a fortnight ago.

They are the finest troops in the world.

I am so proud of them.

As they wait, think also of their families whose wait will be even longer.

I send them all our thoughts and prayers, as I say, God speed and come home safely.

As perilous as the international situation is – it would be wrong to be distracted from Britain’s domestic challenges.

For we have another duty.

To hold this government to account.

To provide effective opposition.

To build the alternative government this country so desperately needs.

Not since the 1970s – when the Conservatives last rescued Britain from Labour’s mess – has this country needed our party more.

Our party’s duty is clear.

It is to serve and to succeed.

That success will depend on all of us…

Working together; campaigning together…arguing together!

Well perhaps, not arguing together too much!

I’d like to pay tribute to each and every one of our Party members; our Association officers and our councillors up and down the land.

I thank all of you.

I know you fight hard for our cause.

I know you work selflessly for your communities, and for your country.

You work for the moment when Conservatives will restore hope and pride to Britain.

Today I want to talk about the opportunity before our party.

An opportunity to serve this country again.

Because – and let me give you a headline here – the new Labour project is dead.

Mr. Blair may stay in Downing Street for a couple more years but his mission is over.

His Third Way has reached the end of the road.

Just think, for a moment, about this government’s record:

Higher taxes.

But poorer public services.

More laws.

But less order.

Bigger promises.

But shrinking hope.

For six long years the British people gave Tony Blair the benefit of the doubt.

But there is no doubt now.

Tony Blair’s day of reckoning is fast approaching.

The British people are ready for change.

They want change founded on fairness.

Fairness for vulnerable people and fairness for the backbone of this country.

We need to reassure them that Conservatives can deliver that fairness because we build on success.

Our successes at home – in Conservative councils throughout Britain.

And on what is already working in other countries.

Let me begin by recording the significance of Labour’s latest failures and broken promises.

More and more people are having what you might call ‘wake up moments.’

They are moments triggered by yet more news of this Government’s failure, incompetence and dishonesty.

In pubs…

At the school gates…

On the factory floor…

People are talking about the moment they realised that this government was conning them.

For some the wake-up moment came last summer during the ‘A’ levels fiasco.

Never again will those people trust Mr. Blair’s promises on education.

For some the wake up moment came a few months ago when Labour stopped sending burglars to prison.

Never again will those people trust Mr. Blair’s promises on crime.

For some, the wake up moment came when their council tax went through the roof and for others it will come when Labour’s National Insurance Jobs Tax takes yet more pounds from their wage packet.

Never again will those people trust Mr. Blair’s promises on tax.

For some, that wake up moment will come when Labour attempts to sign up Britain to a European Constitution and a European single currency.

Never again will the people trust Mr. Blair’s promises on Europe.

No Mr. Blair – we’re not going to let you sell the birthright of the British people.

In 1997 Mr. Blair led people to believe that things could only get better.

Many people had such high hopes of him.

In 2001 they heard another set of promises and – although doubtful – gave Mr. Blair one last chance.

Remember those promises?

Remember that grin?

There isn’t so much to smile about now.

Mr. Blair has squandered a golden economic inheritance, and two large parliamentary majorities.

Every year he’s taken an extra one hundred billion pounds of tax from you… and all for nothing.

This Labour government is a one hundred billion pound a year failure and history will not judge it kindly.

Not least because history will be written by people who have to pay Labour’s frightening top-up fees.

It will by read by people who have to face up to the consequences of Labour’s cynical raid on pensions.

Labour isn’t just hurting people now; it’s stealing their futures.

Many British people feel that they’ve been taken for a ride.

You’ve saved for years for your retirement but your pension is dropping in value by the day.

You’re working longer hours and paying more tax than ever before.

And despite the tax you’re paying, the schools, hospitals and trains you depend on – still aren’t working.

You respect the law but get no protection from those who don’t.

You do your bit for others and just get hassle in return.

It’s no surprise that some people are asking themselves:

What’s the point?

What’s the point of doing everything you can; when it feels like the system is stacked against you?

The people who work in Britain’s public services feel this more than most.

Professional initiative and independence have been ripped out of our public services.

Ripped out by a Government that thinks it always knows best.

A government that prescribes to our doctors and nurses, that lectures our teachers, and that handcuffs our police officers.

Let’s not forget, it’s doctors and nurses who take life and death decisions.

It’s teachers who are trusted with our children’s schooling.

It’s police officers who protect our homes and our families.

We rely on them all.

They shoulder huge responsibilities on our behalf.

They are the real heroes of our communities.

Yet this Government doesn’t trust them.

Instead it hands over your money to a million bureaucrats who are miles from the frontline of our public services.

The British soldiers of the First World War were described as lions led by donkeys.

Today our public services are staffed by doctors and nurses, led by number-crunchers.

Teachers led by target-setters.

Police officers led by pen-pushers.

That is why the tax you are paying is not giving you the better healthcare or the better education or the better policing that you need.

It’s being wasted in a system that insults and undermines the dedication and professionalism of the people who really do know best – the people at the sharp end.

So: what’s missing in Blair’s Britain?

I’ll tell you what I think it is.

It’s fairness.

The British people don’t expect the earth.

They – just – want – a fair – deal.

Labour preaches fairness;

The Conservative Party practises fairness.

We believe in a special obligation to the young and to the old.

We believe in helping people who are least able to help themselves.

We believe in giving a youngster in trouble a chance to go straight.

We believe in opportunity for people of every background.

And we reject the lonely individualism of those who would allow everything – and stand up for nothing.

Crucially, we understand that fairness cuts two ways.

Conservatives appreciate you have to be fair to the people who pay for the public services and for society’s other responsibilities.

People who build and run businesses.

People who provide for their families and their futures.

People who play by the rules and aren’t a burden to the police or courts.

People who are patriotic.

People who advance social justice by giving to their communities.

These people don’t belong to a special interest group.

Theirs is not a trendy cause.

And they are forgotten by this government… except, of course, when Gordon Brown wants their money.

But they are the quiet strength of our nation and, yes, they are getting angry.

These people are the backbone of our country and this Government has ripped them off.

Voters are deserting this failing government.

But the Liberal Democrats are not an alternative to Labour.

They are its dark shadow.

If Tony Blair is new Labour.

Charles Kennedy is old Labour.

But, have I got news for you, Mr Kennedy;

By the next General Election we will make sure that every voter knows what your party really stands for.

Before May’s elections, Liberal Democrat Candidates will cynically attempt to distance themselves from Charles Kennedy’s policies.

But Liberal Democrat councils are just like Labour councils.

And in the Welsh Assembly and the Scottish Parliament, it’s impossible to tell the difference between Labour and the Liberals.

They both tax more.

They both waste more.

And they both deliver less.

Why vote for more of the same – only worse?

Labour and the Liberal Democrats are both in thrall to a culture of despair.

The cynical despair of politicians who’ve lost the will to make a difference.

They have always been content to manage decline.

Conservatives never have and Conservatives never will.

People no longer believe Labour’s promises.

They’ve watched Labour fail.

They don’t want their hopes dashed again.

But they need proof that the Conservative Party is different.

And that means we have to be straightforward.

We must promise only what we can deliver.

There’s an urgent job that needs to be done and we have to show that we’re up to it.

Labour, like a cowboy builder, promised perfection, charged the earth and built something that’s falling apart.

Well, enough is enough.

They build on sand.

But we’ll build on rock.

At home, we’re already building on a very strong record in local government.

The independent Audit Commission has proved that Conservative councils provide better quality services at a lower cost than Labour and the Liberal Democrats.

Conservative councils are led by people who’ve run businesses, worked in the public services and given to their communities.

They don’t waste council taxpayers’ money.

They don’t wrap projects up in red tape.

They get the job done.

That’s why we need more Conservative councillors elected in May.

That’s why we need more Conservatives in the Scottish Parliament and in the Welsh Assembly.

And our programme at the next General Election will be built on what’s already working in other countries.

There’s New York’s successful war on crime.

Australia’s tough but fair asylum policy.

Holland’s rich mix of high-achieving, local schools.

France and Germany’s hospitals where the sick do not have to wait.

We’re learning from what works elsewhere in the world and we’re going to make it work for Britain, too.

So, I can say with confidence:

The next Conservative Government will put 40,000 extra police officers on Britain’s streets.

And this will be funded by our quota system which will restore order to Labour’s asylum chaos.

So chaotic that – on Friday – Labour’s system was judged the weakest in Europe.

By reforming Britain’s public services Conservatives will stop the waste of taxpayers’ hard-won earnings.

We will give headteachers authority over their schools.

They will have effective powers to restore discipline in the classroom.

State scholarships will open the door of opportunity for children in failing schools.

We will put clinical priorities first by scrapping Labour’s politically-motivated targets for the NHS.

And because Conservatives trust nurses and doctors, we will create foundation hospitals with real freedoms to serve local communities.

These freedoms will stop the suffering caused by the current system’s failings.

Just think of people who’ve waited months for a desperately needed operation.

So desperate for treatment that they use their life savings to pay for it outside the NHS.

Labour won’t face up to the fact: the system fails these people.

Labour always defend the system against the patients.

Conservatives always put patients first.

That’s why we’ll help people who’ve paid their taxes, and can wait no longer, to get care faster in a private, public or voluntary run hospital of their choice.

We call that our Patient Passport.

And it’s not just patients that deserve fairness.

Conservatives know that parents, students, passengers and victims of crime deserve fairness, too.

That’s the difference between us and Labour.

Conservative policies will help everyone in Britain.

They will help everyone who is worn down by failing schools, rising crime, substandard healthcare, child poverty and insecurity in old age.

Our agenda is so vital for people in vulnerable communities like Easterhouse, Glasgow.

I will never forget my visits to them and to Gallowgate and Moss Side and Hackney and Grangetown and all the many other places where hope is in retreat.

These are the people in Labour’s heartlands that Tony Blair has forgotten.

The Conservative Party will not forget them.

Some say: ‘they’re not Conservative – and never will be’.

They said the same 25 years ago when Conservatives introduced the right-to-buy – giving council tenants the opportunity to own their own home.

Now we plan to extend the right to buy to housing association tenants, too.

Much, much more still needs to be done today for people unfairly excluded from all that Britain has to offer.

Our party – the party of Burke, Disraeli and Shaftesbury – fulfils its greatest purpose when it upholds fairness for every person in Britain.

Not only for the disadvantaged but for the hard-working, law-abiding, patriotic majority who deserve a fair deal, too.

So, when you’re next asked why vote Conservative? say this:

One:

Conservatives in local government already spend taxpayers’ money more carefully and get the job done.

Two:

Conservatives want a fair deal for everyone.

For those who rely on public services;

For those who work in them; and for those who pay for them.

And three:

Conservatives are passionate about making Britain’s economy and public services work again.

We will deliver because our programme is built on what already works at home and elsewhere in the world.

All of our efforts; all of our energy – will be devoted to the urgent tasks facing the British people.

Devoted to getting on with the job…

Not Mr Blair, just to getting on TV.

In the last eighteen months the mission and purpose of our party has been renewed.

This party is now – and always will be – the party of enterprise and prosperity…

But we are also a party committed to better public services.

This party is now – and always will be – a party that keeps taxes low and gives people power over their own lives.

This party is now – and always will be – a party of freedom, tradition and national pride…

But we are just as much a party of fairness.

We are a party committed to those who need society’s help and to those who provide it.

We stand for justice for the victim and justice for those who need help to mend their ways.

We believe in compassion that helps vulnerable people and compassion that rewards responsibility.

In practical terms:

Fairness requires us to help people fleeing from persecution and to stop the scandalous abuse of Britain’s asylum system.

Fairness demands that we properly punish criminals and that we help young people to escape the conveyor belt to crime.

Fairness leads a Conservative government to always appreciate the dedication of single parents and to reward marriage for the dedication and stability it provides children.

This is my agenda.

An agenda for fairness.

It’s Conservative.

Conservative in heart and mind.

In idealism and practicality.

In vision and reality.

If ever there was a common ground of British politics then this is it.

It’s where the British people stand.

It’s where we stand.

My mission – a mission for the whole Conservative party – is to safeguard our prosperity and to improve our public services.

To build one nation.

To create a Britain that is fair for all its people.

We will not be distracted from this mission.

Ours is a great party.

And sometimes, great parties are tough to lead.

So, I took on this job thinking it would be hard.

And, you know what?

It is!

It is hard.

But it’s not as hard as bringing up a child on an inner city estate.

It’s not as hard as saving all your life and seeing your pension fund plundered by the government.

It’s not as hard as watching your mother wait and wait for an operation she desperately needs.

It’s not as hard as seeing the country you love divided and demoralised.

I didn’t seek the leadership of this party for its own sake.

I sought it so that we could give back hope to our country and to all its people.

People who are sick and tired of Labour’s broken promises.

Sick of a failing health service.

Tired of taxes… raised and wasted.

Sick of the drug epidemic.

Tired of government spin and lies.

People don’t expect the earth.

But they want a fair deal.

And they deserve a fair government.

From Easterhouse to Hackney, amongst pensioners and the young, you can hear the beating heart of a discontented Britain.

Discontented and dismissed – they’ve lost faith that things could change.

It is our challenge to re-unite this country and to restore fairness.

This is a challenge worthy of us – we must respond.

Our country is waiting.

Our party is ready.

Ready to build a Britain to be proud of;

For a people that deserve the very best.