“We need a proper employment plan” – Jonathan Ashworth’s full speech

Below is the full text of the speech delivered by Shadow Work and Pensions Secretary Jonathan Ashworth to the Learning and Work Institute today:

Good afternoon. It’s a pleasure to be here with the Learning and Work Institute. For over 100 years, you and your predecessor organisations have been at the heart of the debate of how to equip workers with the skills to find work and crucially progress at work. You were founded at a time of great economic insecurity, given international events from savage war and a lethal pandemic raging at the time.

And today we meet in time of economic turbulence. We are in a period of high inflation with more painful increases in energy bills to come, more food price increases in the shops, the rising cost of living outpacing wage growth.

The response of the government – to the extent we can fathom any government approach at all – is to strip demand from the economy through tax rises hand in hand with the Bank of England’s interest rate rises.

I want to argue we need a proper employment plan. That we need modern supply-side reforms to increase employment to help tame inflation, to make our economy more productive and raise living standards in a sustainable way.

That means reforming the way we provide employment support to raise participation in the labour market now. And prepare us for the future of the three Ds – decarbonisation, digitisation and demographics.

• Decarbonisation, where we will need new support, training and help so workers are ready to take advantage of the new jobs – the ‘green heat’ of future technology that helps us transition to net zero.
• Digitisation, where there is a risk of more low-paid work and a gulf between this and higher-paid work with few routes to advance from the bottom to the top becomes even more ensconced.
• Demographics, where our population is ageing and longevity could [leave] us short of 2.6 million workers by 2030.

So we need reforms to protect our living standards today and reforms to protect our living standards tomorrow.

Let me be clear: unemployment for me is never a price worth paying. Worklessness is devastating for individuals. I’ll never forget queuing up in the old ‘dole office’ with my dad in the 80s. Ongoing joblessness wrecks lives and is a crushing waste of talent.

It’s why I’m so passionate about providing real employment opportunity for all so that families can build a good life. But the way in which we provide employment support is failing. Overall employment is down since the pandemic. Hundreds of thousands of over-50s have left the labour market altogether and the numbers of those on out of work benefits is one million higher.

The analysis you have published today is stark and skewers recent ministerial boasting of a jobs miracle:

• The UK has seen the biggest drop in its employment rate of the major G7 economies
• Hundreds of thousands of over-50s have left the labour market. The UK is an international outlier, seeing the biggest drops in over-50s in the workforce of ten major countries studied.
• There are now twice as many people economically inactive due to sickness as there are unemployed people.

Earlier this year, the TUC explored the drivers of the so-called ‘silver exodus’ from the labour market. They found a growing number of the over-50s leaving for reasons of long-term sickness or disability, for others it was retirement or caring responsibilities.

And worryingly, the TUC highlighted the sharp inequalities in which over-50s are leaving the labour market. Of those leaving for reasons of ill health or caring responsibilities, a higher proportion are in lower-paid occupational groups of process, plant and machinery operators and elementary occupations including cleaners, security guards and call centre workers. The TUC calculate almost one in three older people who are inactive due to health problems come from these sectors.

BAME workers, while less likely to retire early than white workers, those that do leave the labour market earlier are more likely to do so because of poor health or caring responsibilities.

Older women historically had higher rates of inactivity than older men. And the proportion of older women leaving the labour market for caring responsibilities has been higher than men, though there [have] been some men leaving the labour market for caring responsibilities.

And there are a number of over-50s who have left the labour market for reasons of retirement. Many cashing in defined contribution pension pots. This doesn’t tell us whether they have other sources of income, but it does suggest this cohort of older people are not using ‘pension freedoms’ to provide a sustainable retirement.

We’ve seen in the past what being out of work at this age means for people in terms of their health, financial stability and mental wellbeing. But it’s a waste for society as well, undermining our sense of common purpose. And it holds our economy back when we have so many workforce shortages with vacancies at [a] record high and inflation ravaging living standards.

How should we respond? I’ve committed the next Labour government to a strategy for ageing and supporting the [over-50s’] return to work will be a key plank of that.

As a former Shadow Health Secretary, [it’s] no surprise to me that years of squeezing healthcare capacity have left us with 6.5 million on NHS waiting lists for treatment and over 300,000 waiting over a year. I long warned this would risk permanent disability for many working people forcing them out of the labour market.

My Labour colleague Wes Streeting is developing a detailed plan to bring waiting lists down, and I’ll be working closely with Wes, as I believe more can be done to [provide] better support for those who have left the labour market but can be helped to return with the right help in place.

Mental ill health is one of the biggest drivers of absence from work. Today, I’ve been at Central and North West London NHS Trust’s employment services, looking at their impressive schemes for better linking employment support with community mental health providers.

I’ve also been studying programmes like in Southampton where local government, the NHS and DWP worked together to help more people move into work who otherwise would not have been. Expert evaluation has shown that for every £1 spent on the Southampton initiative it resulted in economic benefits of £1.76.

The reformed employment service I want to build would not only offer specialist, tailored help to the over-50s who want to return to work but would be better integrated with local government and local health services, and I’m launching a conversation today about what that could look like in practice.

I’m aware of course that, given the concerns over Covid transmission, ensuring older people feel safe in the workplace is also important. The Health and Safety Executive must be properly supported to ensure legal obligations to assess and manage risk in the workplace is enforced.

Secondly, despite the silver flight from the workplace, the ONS reports that 6 in 10 people in their 50s would be prepared to return to the labour market if the right flexibility existed. Our deputy leader Angela Rayner has launched a new deal for working people with the right to flexible working at its heart.

People living longer brings great opportunities, but big challenges as well. Retaining older people in the workforce is good for employers, bringing benefits and experience. It’s good for the economy overall boosting growth.

One in three people born today will go onto develop dementia. Many of us will be confronted with the need to care for a loved one at some point in our older years. Perhaps a partner or a parent.

Just as important it seem policymakers have finally began to appreciate the importance of menopause support and policy in the work place. So in short the right to flexibility will become more ever more important especially if we want to retain older workers.

Finally: retraining. Someone in their 50s could well want to work for another 15 or even more years if the right training offer was available. My colleague Bridget Phillipson has asked David Blunkett to produce a strategy to ensure we are equipped for the skills challenges of the future. I’ve been discussing with Bridget and David directly how we retrain and keep older people in work.

With a cost-of-living crisis raging, these are the kinds of welfare and employment reforms to help people move back into work, progress at work. We cannot abandon a generation of people to worklessness just as happened the past.

Genuine full employment will be a driving mission of the next Labour government and as a reformer, I’ll be working with our Shadow Employment Minister Alison McGovern on a plan to ensure those out of work – including the over-50s and those who have fallen out [of] work since the pandemic – receive the real support they need as part of our plan to grow our economy and [sustainably] raise living standards giving people the security they deserve. Thank you.