Mark Hoban is a former Financial Secretary to the Treasury and Employment Minister, and is MP for Fareham.
Such businesses as Barnbrook and Lucketts are the engines of private sector job creation. Neither of may be household names across much of the country – but they certainly are in Fareham. Lucketts is a very successful local coach company which employs over 300 people is about to recruit another 20 staff. Barnbrook, a small advanced engineering company, is investing in its future by recruiting half a dozen young people. In every constituency across the country there are businesses like Lucketts and Barnbrook that have played their part in creating 1.7 million new jobs since May 2010.
Our opponents find this success hard to stomach. Over the last four years, as more and more jobs have been created, they have sought to undermine this achievement. They claimed the jobs were part time, but of the 473,000 new jobs created in the last year nine out of ten were full time. They said that they were temporary, but the number of temporary workers fell in the last year. They claimed that these new jobs benefitted migrants, but of the 473,000 new jobs, nine out of ten went to British nationals.
The most recent claim is that they are low wage jobs, but nearly 140,000 new jobs were created in professional, scientific and technical areas and 100,000 in administrative and support services – not traditionally low pay sectors. On top of that, youth and long term unemployment is falling. Labour now has nowhere left to hide. They have to accept that businesses have created good quality, permanent, full time jobs that are going to UK nationals. It is time for them to stop denigrating businesses that have created the 1.7 million new private sector jobs or the additional 1.3 million people in work.
Businesses’ appetite for job creation has been matched by an unprecedented appetite for work. There are record numbers of people in work and record numbers of women in work, and we should not overlook the fact that the proportion of the working age population who are economically inactive – in other words, neither in work nor looking for work – is now below pre-recession levels. These figures, which are drawn from the Labour Force Survey, are also borne out by benefits data. The number of people claiming the main working age benefits for the economically inactive (those who are out of the labour market through ill health or caring responsibilities) has fallen, too. Nearly 200,000 fewer people are claiming income support for lone parents compared to May 2010, and the numbers claiming sickness benefits have fallen by 158,000 over the same period.
Why have people come back into the labour market? When people hear about so many jobs being created, it must give them hope that it will be worth them getting out there and looking for one. So the availability of jobs helps, but so too do our reforms to the welfare state. We inherited a welfare state that simply didn’t work. It promoted dependency, not independence and self-sufficiency. It wrote off people who had been out of work through ill-health. It offered a one size fits support for job seekers that didn’t help a person tackle their own barriers to work. It eroded the financial incentive to work compared to a life on benefits. We have reformed the system to provide the right support to get people into a job – breaking a culture of dependency and worklessness.
As part of our reforms, we have raised our expectations of job seekers and given them personalised support. Using insights from behavioural economics, The Department for Work and Pensions (DWP) has developed a new claim commitment that sets out a very clear contract between the job seeker and the taxpayer. The job seeker, with the support of a JobcentrePlus adviser, sets out in detail what they will do to find work in the next week or fortnight in return for their Jobseekers Allowance. They also know that if they don’t meet their side of the bargain, then their Jobseekers Allowance is at risk. To tackle barriers to work, the DWP has set up the Flexible Support Fund to provide tailored additional help: whether that is funding a course, paying the fare to get to an interview or buying a shirt and tie so that the applicant can look presentable at an intereview.
Even the process of signing on has been changed. Under the old regime, people spent four to seven minutes with an adviser once a fortnight. Now some job seekers are seen more often, even daily, to get support, whereas others can sign on electronically because advisers know they have few barriers to work and just need to get out there to find a job. The launch of Universal Jobmatch has enabled job seekers to search for vacancies 24 hours a day, seven days a week rather than having to come in to the Job Centre. Higher expectations, personalised support and a modern approach to job seeking have, I believe, contributed to the fall in unemployment. Businesses have seen more people come forward who want to work because they want to provide for themselves and their families rather than rely on the taxpayer.
But getting more people into work is only the first stage of our reforms. Universal Credit will not only provide better financial incentives to get people into work but will also encourage people in work increase their earnings. Unlike the tax credits system, the DWP will work with those on low incomes to help them boost their earnings. This will further reduce their dependency on the taxpayer and encourage self-reliance.
Welfare reform is a key part of our long term economic plan. We need to get more people into work to enable our economy to grow. We inherited a welfare state that discouraged work. We won’t succeed in the global economy if we don’t encourage more and more people to work through the right combination of incentives and support. This is not just about economics; it is also about ensuring the success of businesses, like Lucketts and Barnbrook, and restoring dignity to those written off by the welfare state. Work gives people the opportunity to look after themselves and their families. Work boosts self-esteem. Work helps relationships. Our welfare reforms are good for the economy, business and, above all, people.