Today I’m setting out how reforms to earn our way out of the cost-of-living crisis and social security changes to ensure the system is fair and affordable go hand in hand. To have a system that’s fair and affordable we need to help more people into work, make sure we have decent and secure jobs, and ensure that the work that people have done throughout their lives is properly recognised when they lose their jobs and in old age. Labour has always been the party of work. As Ed Miliband reminded us, the clue is in the name.
Of course there are people who, either because of sickness or disability, can’t work, in the short term, and sometimes throughout their lives. That’s why it’s even more important that we have a system which supports them with dignity and empowers the many disabled people who desperately want to work to do so.
But to make that system affordable, our first task must be to get more people into work. Despite the fact that we’re finally seeing welcome falls in the short-term unemployment figures, we have levels of long-term unemployment not seen since the last time we had a Tory government.
That’s why Labour’s Jobs Guarantee, offering a paid job to all young people unemployed for more than a year, or over 25 year olds unemployed for two years or more, jobs they would have to take or lose their benefits, is at the centre of our plans for welfare reform.
And it’s why today I’m announcing new proposals to ensure that the poor English and maths that leave too many people locked out of work for years on end, are addressed up front. Labour’s Basic Skills Test will ensure that the one in ten jobseekers who lack numeracy and literacy skills take action to address the problem as soon as they start claiming benefits.
We have to recognise that the basic bargain that people used to understand: get a job and you’ll be able to support your family, is breaking down. Today, for the first time, more than half of those in poverty have got a job, and a shocking two thirds of children in poverty live with a parent who works.
The spread of low-paid and insecure jobs doesn’t just have consequences for these families, it has huge costs for our country. New figures from the House of Commons Library reveal that the record number of people working part-time who want to work full-time is costing the public purse £4.7 billion a year. That’s why our reforms to earn our way out of the cost-of-living crisis, including reforming our banks, strengthening the minimum wage, tackling the exploitative use of zero-hours contracts and encouraging employers to pay a Living Wage are so vital, not just for the prospects of thousands of working families, but for making sure that our social security system is sustainable.
We need that system to be affordable because we know that many people will still need to rely on social security at some point in their lives, including many of those who never thought they’d need it. It’s worth bearing in mind that when we talk about the unemployed today, on the latest figures, this includes over 130,000 former managers and senior officials, over 100,000 professionals and over 170,000 who previously worked in skilled trades such as engineers, electricians or IT technicians. People who had paid into the system all their lives, but felt that when they came to rely on it, too often it offered ‘nothing for something’, and failed to recognise the years of contributions they’d made. That’s why I’ve asked the IPPR to look at how we can make sure that people know that work will pay throughout their lives.
This is the agenda of the British public and it is Labour’s agenda based on the right values for the times we face. It’s the agenda we need to get started on now so that a One Nation Britain can work and earn its way to a better future.
Rachel Reeves is Shadow Secretary of State for Welfare and Pensions