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Speech

Duncan Smith: Restoring fairness to the welfare system

Rt Hon Iain Duncan Smith, Monday, October 3 2011

Iain Duncan Smith

We meet in difficult times. With world economies in turmoil we have an immense but vital challenge to rescue our economy once again. Remember how, despite the siren voices telling us in 1979 that it couldn’t be done, our strong leadership under Mrs Thatcher delivered.

Today is no different.  More than ever we need strong leadership and in David Cameron, we have someone who is delivering it through tough times, as Britain wants and needs.

Labour’s  spend now pay later, debt driven economy spawned a culture of conspicuous consumption, where people were only valued in terms of how much they earned or how much they were worth.

This culture has left us in a debt crisis, the like of which none of us has ever seen before.

That is why we are unwavering in tackling our inherited debt – it is the only path to a strong, sustainable economy for our generation and the next.

Europe

And let me re-assure you, that at a time when the British people are tightening their belts, and the European Commission orders us to open our doors to benefit tourists and pay them benefits when they arrive here, I have a simple message for them.

No, no, no

Yet as we gather here in Manchester, I’m also reminded that not far from this building were streets under siege just two months ago. 

We saw the best and worst of Britain that week.

At night, a violent minority intent on crime. By morning, the majority, clearing up their communities and leading the fight back. 

There is no justification at all, and there never will be, for what happened. 

That is why it is right that punishment is decisive and swift.

Yet there is a depressing and familiar context to this.

That is the steady rise of an underclass in Britain – a group too often characterised by chaos and dysfunctionality...and governed by a perverse set of values.

Yet these problems aren’t new, we have been reporting on them since I founded the Centre for Social Justice seven years ago.

Every now and then they appear:

Think of murdered Rhys Jones, Gary Newlove and Baby Peter, kidnapped Shannon Matthews, and tortured Fiona Pilkington. 

And many others – innocent victims of a broken, damaging culture...a culture that generates growing pockets of deprivation. 

Pockets in which social housing, once a support for families working hard to give their children something better, has too often become a place of intergenerational worklessness, hopelessness and dependency.

The riots serve as a pertinent reminder to us about the deep and clear social problems our Government inherited.

For before the recession began we had over 4 million people stuck on out of work benefits – many for a decade or more. 

We had one of the highest levels of unsecured personal debt in Western Europe.

We had widespread family breakdown and one of the highest teenage pregnancy rates in Western Europe: poor parenting transmitting dysfunctionality from one generation to another.

At the CSJ we found that half of all children born today will experience family breakdown by the age of 16.

Too often these children attended schools where their aspirations were suffocated, within a culture of low expectations.

Social mobility had virtually ground to a halt and the section of society on the lowest incomes has become static and entrenched...too many children born into such communities find that at best, they remain in the same condition as their parents.

At the same time, almost a fifth of all households are workless, and spending on working age welfare rocketed by 50 % in real terms under Labour before the recession.

We found that over a million children had a parent addicted to drugs or alcohol – what hope for them, other than to become users in their turn?

And from there, it is just a short walk into a revolving door criminal justice system.

With income inequality the worst for a generation, the last Government left us a welfare system which treated symptoms, not causes.

To each person it said:

“.......you’re financially better off out of work, better off playing the system and most of all if you are bringing up children, you’re better off apart.”

Is it any wonder we face such entrenched levels of family breakdown, inactivity and a sense of entitlement?

Ending this failure is like turning a super tanker around – but we must and we are.

Remember last year I promised we would tackle it head on.

First, as Chris said, we promised we would confront the worklessness our benefits system has nurtured for too long.

Our Work Programme is giving new skills to people far from the jobs market.

The voluntary and private sectors, paid only when they get people back in work and as they help people sustain it by developing the ‘work habit’, are delivering value for money.

Not just the big society at work, but the big society getting people back to work.

And ending the something for nothing culture.

Promise made, promise delivered

Second, we also promised to start dealing with the long term sickness benefit, too often abused as an excuse for avoiding work.

Our Work Capability assessment will review 1.5million people on Incapacity Benefit, many of whom have been written off and abandoned. 115,000 have already been through the assessment.

Those able to work immediately will look for employment and join the Work Programme; others who could work in the future, will get tailored support. 

With more and more of those once parked on permanent benefits back seeking work or in work –

Third, as David Freud said, we promised to build the Universal Credit, the most radical change to benefits in a generation.

The current system, a mess of multiple benefits paid at varying rates, is open to widespread abuse – the result is massive error and fraud costing our country over £5 billion.

Worst of all, some people lose up to 96 pence of every pound earned in work because of the way their benefits are withdrawn.  Would any of us work at 96% tax rates, especially if we could earn a living without any effort at all?

Universal Credit will ensure that you will be better off in work than out of it, and it will mean taxpayers get value for money.

Just imagine, a system that places work at the heart of the benefit system –

Which is why, for those fit for work I have a simple message:

Work with us to find and stay in employment and you will get all the support we can muster.

However, failure to seek work, take work, stay in work, or cooperate, and you will lose your benefits.

This is our contract with the British people.

To bring an end to the something for nothing culture.

Promise made, promise delivered.

But we are doing more:

As Maria pointed out, we are improving disability support, which is currently unfair and un-ambitious. 

Too many in receipt of Disability Living Allowance are left for years with no re-assessment of their circumstances: more than two-thirds of the current case load has an indefinite award.

DLA is a lifeline for many, but it just isn’t working effectively enough in its current form.  And many jobseekers who receive it are confused, often thinking that if they take work, they’ll lose support because it is complicated and oddly inflexible.

Whilst we’ll help those who can work to sustain work, we will always care for those who cannot.

But those with a disability must no longer be left behind.

And that’s not all. We are determined to help bring young people to meaningful employment - For it is they who have felt the recession the hardest

We have created funding for 250,000 new apprenticeships and 100,000 new work experience places.  This alongside an innovation fund of £30 million to help our most disadvantaged young people.

Last year we also promised we would support the older generation.

That is why, working with Steve Webb, we restored the earnings link and introduced a triple lock guarantee. 

And enforced retirement is going. Our rapidly ageing society means the next generation face paying for our retirement whilst approaching theirs, retiring worse off than their parents.

We mustn’t allow that to happen.

That’s why we will be on the side of savers through auto-enrolment – up to 8 million people saving more for their future.

This, alongside our changes to the retirement age, will allow for bold state pension reform.  A single tier pension would end means testing, to increase income for many more, especially women and those who are self-employed.

  • An improved state pension
  • An end to enforced retirement
  • And reward for those who save

Promise made, promise delivered.

This brings me to one of the most important issues for our country...the role of the family.

This isn’t about Government interfering in family life; it’s about Government recognising that stable two parent families are vital for the creation of a strong society –

It’s about parents taking responsibility for their children,

It is about government realising that we have to create a level playing field for the decisions people make about family.  This means reversing the biases against stability we’ve seen in recent years, including the damaging financial discouragement to couple formation, despite the evidence of its stable outcomes for children.

We also need to make sure that support is available when families most need it.

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.

Furthermore, the Prime Minister has made it clear that in this Parliament the Government will recognise marriage in the tax system.

The riots were a wake-up call on street gangs too.

The scenes of young people ransacking local businesses, displaying stolen goods on the internet, spoke to a damaging culture on the rise in recent years.

Gang members were not the sole perpetrators of the riots but they played a significant part. 

I have seen how these gangs destroy lives in my own Borough – the young murdering the young.

Four years ago, when I was Chairman of the CSJ, I commissioned a national review of Britain’s street gangs to seek solutions.

It found that street gangs are both a driver and a product of the social breakdown gripping our deprived areas.

Many young gang members drift in from dysfunctional broken backgrounds, in search of a place to belong, a perverse kind of family, others through fear of retribution.

With no role models except the violent and the criminal, like child soldiers of the third world these young minds bear the deep scars of a life filled with anger and violence.

Fighting this through our police forces is crucial, but this isn’t a job for officers alone; we must end the false belief that we can arrest our way out of this crisis. 

No, what we need is a way out for those who’ll take it and the toughest enforcement against those who refuse.  Also, through early intervention, we have to prevent them joining in the first place.

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

I was once told that:

‘The inner-city is not just a place...it’s a state of mind’.

In August the inner city came to call and everyone was horrified by what they saw.

For too long we have let these problems be ghettoised as though they were a different country. Whilst the majority of the British people feared crime and violent crime most of all, it was in the inner city areas where most crime and violence exist.

For too long the last government understood that we had a social problem, but considered it a second order issue.

They knew too many British people were on benefits living unproductive lives, but their short term coping strategy was to bring in more and more workers from overseas to fill the gaps. A growing underclass was establishing itself, shut away, dysfunctional and too often violent.

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

That is why I speak of the urgency of change and ask us to fulfil our historic role, to put our heads and our hearts in tandem and become social reformers once again

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

Our task is to achieve this rebalancing of society,

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

In essence, what we are engaged in is more than benefit change and more than just welfare reform. 

It is social reform, leading to social recovery.

This day, let that be our promise to our country, a promise forged even in the teeth of an economic gale,

And against the siren voices saying it cannot be done,

That we will hold true to our purpose and renew our commitment to reform our society, so that we can restore aspiration and hope, to people that have been left behind for too long. 

This is the challenge of our generation,

Let us rise to that challenge.

Rt Hon Iain Duncan Smith

Iain is the Secretary of State for Work & Pensions and Member of Parliament Chingford and Woodford Green.

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