Below is the full text of Shadow Work and Pensions Secretary Jonathan Ashworth’s speech to the Learning and Work Institute today:
Good afternoon. It is a pleasure to be here with the Institute of Learning and Work. For more than 100 years, you and the organizations that came before you have been at the heart of the debate about how to equip workers with the skills they need to find work and, above all, to progress at work. You were founded at a time of great economic insecurity, given the international events of a savage war and a deadly pandemic that was raging at the time.
And today, we meet at a time of economic turmoil. We are in a period of high inflation with more painful increases in energy bills to come, more food price increases in stores, cost of living increases higher than wage growth.
The government’s response – as far as we can understand any government approach – is to pull demand out of the economy through tax hikes alongside the Bank of England’s interest rate hike.
I want to say that we need a proper employment plan. That we need modern supply-side reforms to increase employment in order to control inflation, make our economy more productive and raise living standards in a sustainable way.
This means reforming the way we provide employment supports to increase labor market participation now. And prepare us for the future of the three Ds – decarbonization, digitization and demography.
- Decarbonization, where we’ll need new support, training and help to get workers ready to take advantage of new jobs – the ‘green heat’ of future technology that helps us transition to net zero.
- Digitization, where there is a risk of more low-paid work and a chasm between it and better-paid work with few pathways to progress from the bottom up, is becoming even more entrenched.
- Demographics, where our population is aging and longevity could [leave] we are short of 2.6 million workers by 2030.
So we need reforms to protect our standard of living today and reforms to protect our standard of living tomorrow.
Let’s be clear: for me, unemployment is never a price to pay. Unemployment is devastating for individuals. I will never forget standing in line at the old “unemployment office” with my father in the 80s. Continued unemployment destroys lives and is a crushing waste of talent.
This is why I am so passionate about the idea of providing real employment opportunities for all so that families can build a good life. But the way we support jobs is failing. Overall employment has been declining since the pandemic. Hundreds of thousands of people over the age of 50 have completely left the labor market and the number of those receiving unemployment benefits exceeds one million.
The analysis you published today is stark and disrupts recent ministerial boasts of a jobs miracle:
- The UK has seen the biggest drop in its employment rate of the major G7 economies
- Hundreds of thousands over 50 have left the labor market. The UK is an international exception, recording the largest declines among the over-50s in the workforce of the top ten countries surveyed.
- There are now twice as many people economically inactive due to illness as unemployed.
Earlier this year the TUC explored the drivers of what is known as ‘money drain’ from the labor market. They found that an increasing number of people over the age of 50 were leaving for reasons of illness or long-term disability, for others it was retirement or family responsibilities.
And worryingly, the TUC has pointed to the stark inequalities in which the over-50s are leaving the labor market. Among those who leave for health reasons or family responsibilities, a higher proportion belong to the lower paid occupational groups of process, plant and machinery operators and to elementary occupations, including cleaners, security and call center workers. The TUC calculates that almost one in three elderly people who are inactive due to health problems come from these sectors.
BAME workers, although less likely to retire early than white workers, those who leave the labor market earlier are more likely to do so due to poor health or family responsibilities.
Older women historically had higher inactivity rates than older men. And the proportion of older women who leave the labor market to care for their children is higher than that of men, although there are [have] some men left the labor market for family responsibilities.
And there are a number of over-50s who have left the workforce for retirement reasons. Many are cashing in defined-contribution pension pots. This does not tell us if they have other sources of income, but it does suggest that this older cohort is not using “retirement freedoms” to ensure a sustainable retirement.
We have seen in the past what being unemployed at this age means for people in terms of health, financial stability and mental well-being. But it’s also a waste of society, undermining our sense of common purpose. And it’s holding back our economy when we have so many labor shortages with vacancies at [a] record standard of living and ravaging inflation.
How should we respond? I have committed the next Labor Government to a strategy for aging and supporting [over-50s’] the return to work will be a key element.
As a former Shadow Health Secretary, [it’s] I’m not surprised that years of healthcare capacity squeezes have left us with 6.5 million on NHS waiting lists for treatment and over 300,000 waiting a year. I have long warned that this could lead to permanent disability for many workers, forcing them out of the workforce.
My Labor colleague Wes Streeting is developing a detailed plan to reduce waiting lists, and I will be working closely with Wes as I believe more can be done to [provide] better support for those who have left the labor market but can be helped to return with the right support in place.
Poor mental health is one of the biggest contributors to work absenteeism. Today I was at NHS Trust Employment Services in Central and North West London, looking at their impressive programs to better link employment support to community mental health providers.
I also looked at schemes like in Southampton where local government, NHS and DWP worked together to help more people get jobs who otherwise wouldn’t have. The expert assessment showed that for every £1 spent on the Southampton initiative, £1.76 in economic benefits resulted.
The reformed employment service I want to set up would not only offer specialist and tailored help for over-50s who want to get back to work, but would be better integrated with local government and local health services, and I am launching today a conversation today about what that might look like in practice.
I am of course aware that, given concerns about Covid transmission, it is also important to ensure that older people feel safe in the workplace. The health and safety manager must be properly supported to ensure compliance with legal obligations to assess and manage risks in the workplace.
Second, despite money draining from the workplace, the ONS reports that 6 in 10 people in their 50s would be willing to return to the workforce if the right flexibility existed. Our Deputy Leader Angela Rayner has launched a new agreement for workers with the right to flexible work at its heart.
People living longer offer great opportunities, but also great challenges. Keeping older people in the workforce is good for employers because it brings benefits and experience. It’s good for the overall economy, which stimulates growth.
One in three people born today will develop dementia. Many of us will face the need to care for a loved one at some point in our old age. Maybe a partner or a parent.
Equally important, it seems policy makers have finally begun to appreciate the importance of workplace menopause support and policy. In short, the right to flexibility will become increasingly important, especially if we want to retain older workers.
Finally: conversion. Someone in their 50s might well want to work another 15 years or even longer if the right training offer were available. My colleague Bridget Phillipson asked David Blunkett to produce a strategy to ensure we are equipped for the skills challenges of the future. I spoke directly with Bridget and David about how we retrain and keep seniors working.
With a raging cost of living crisis, these are the kinds of welfare and employment reforms to help people get back to work, get ahead at work. We cannot abandon a generation of unemployed people as has happened in the past.
True full employment will be a driving mission of the next Labor government and as a reformer I will work with our Shadow Jobs Minister, Alison McGovern, on a plan to ensure that the unemployed – including the over 50s and those who fell out [of] have been working since the pandemic – are getting the real support they need as part of our plan to grow our economy and [sustainably] raise the standard of living by giving people the security they deserve. Thanks.