John Hutton – 2005 Speech to Women and Pensions Conference

Below is the text of the speech made by John Hutton, the then Work and Pensions Secretary, to the Women and Pensions Conference in Manchester on 7th November 2005.

Good morning everyone. I’m very pleased – although rather surprised – to be here in Manchester to open this Women and Pensions Conference today.

Can I first of all begin though by taking just a moment to pay tribute to my predecessor David Blunkett. Many of you here will have known David well and worked with him. David saw tackling the issues of inequality as central to the success of any long term pension reform. In every job he has held, David believed in a progressive approach to improving the lives of some of the most disadvantaged members of the community.

In only a short time as Work and Pensions Secretary he did tremendous work in developing the welfare reform agenda and establishing the National Pensions Debate. I want to build on the foundations he has laid – to take the National Pensions Debate to the next stage – in responding to the Pensions Commission report due in a few weeks time and in building a consensus on a long-term solution to the pensions challenge.

Developed economies around the world are today all being confronted by the same need to design and deliver modern welfare systems, which are in touch with and responsive to, the aspirations of all their people. But we must also remember that the challenges we face today are reflective of both new opportunities – people living longer, more of us in work than ever before – as well as challenges. How we respond to these challenges – whether on pensions or welfare reform – will have a fundamental bearing on what type of society we want to see develop in our country in the years ahead.

A Welfare State essentially forged out of the spirit, hope and grief of two world wars, stands as a tribute to an enduring set of progressive values that I hope will last for decades. These values of support for people in times of need; of dignity and fulfilment in old age; of the responsibility to work if able – these decent values, are as relevant and necessary for the next 60 years as they have been for the last 60 years.

But there are few of us here I believe that could honestly say that a Welfare State designed around the needs, expectations and social norms of mine and my parents’ generation, will not need to change if it is to remain relevant to my children and grandchildren’s generations. The reason we need to make these changes is clear and obvious. Our society is changing and changing rapidly.

The forces of globalisation and demographic change challenge people’s fundamental assumptions and expectations about many aspects of their lives. In a modern world, where international market forces can impact on the very nature of the work people do; where people can have ten jobs in a career rather than one; the fear and uncertainty of social and economic change risks becoming one of the greatest barriers to our continued prosperity.

A renewed Welfare State must, first and foremost, provide the support that enables people to make the transition from one job to another – and from one stage of the career to the next. It must help people balance the multiple pressures of work and family life; and to benefit from the opportunities which change creates. And it must always ensure that those who cannot work are properly supported.

But we should be clear about one other thing as well. We can not tackle inequalities of income in retirement in isolation from tackling inequalities during working life. A renewed Welfare State therefore has a crucial role to play in the way we support people to prepare for their retirement. 100 years ago there were 10 people in work for every 1 person of pension age. Today there are 4 and in fifty years time there will only be 2. And this dramatic change is not confined merely to the UK. Across the EU as a whole, over the next 25 years, the total working age population will fall by 7%; while those over 65 will rise by 51%.

That’s why, since 1997, the Government has invested in Jobcentre Plus and begun a radical transformation of the Welfare State from a passive one-size-fits-all system to an active, enabling service that tailors help to the individual so that they can acquire the skills and confidence to move from welfare to work. And when they are in work, it is always an improvement to being on benefit.

By 1997, one in five families had no-one in work and one in three children were growing up in poverty. Inter-generational poverty had become deeply engrained into many of our communities. But now by supporting people in work and providing financial security for those who can’t work, we have helped 2.1 million children and 1.9 million pensioners escape from levels of absolute poverty since 1997.

Today there are 2.3 million more people in jobs and with around three-quarters of the working age population in work, our employment rate is the highest of any of the G8 countries. But we can and will go further.

If we are to meet the challenges of supporting an ever healthier – but ever ageing population – our society can not afford to be denied the skills and contributions of all those who can and want to work.

That is why our aspiration of an 80% employment rate is so important. It’s why I wholeheartedly endorse the Principles of Welfare Reform that David Blunkett published last month; and it’s why I am committed to taking forwards this reform agenda – to build a modern, active and inclusive Welfare State that balances rights with responsibilities; that matches respect of society for the individual with respect for society by the individual; and which above all, helps people to move away from dependency to making their own way in the world.

Later today, I’m making my first visit to a Jobcentre Plus in Manchester. I’m meeting a local resident who last year suffered severe depression and left work, coming onto Incapacity Benefit. Now, thanks to a local initiative, the leadership of her local city council and support from the Jobcentre Plus she has secured a place on a training course at a local college. With continued advice and support she is seeking to set-up her own business when her course finishes later this year.

So I truly believe that this agenda must be about helping, supporting and inspiring people – not threatening, forcing or restricting them. It’s about changing the focus of the debate from what people can’t do to what they can. And if we get this right, then we will have the foundations on which we can build a consensus on long-term reform of the pensions system itself – and with which we can look forward to the opportunities of longer and healthier lives with confidence.

I know that I have much to learn – which is why I was so keen to come here today – to listen and learn from the experts gathered here – and to support the National Pensions Debate in engaging with people from all backgrounds in understanding the issues and contributing ideas. I want to work with you to get these big decisions right.

I can already tell you that after only a few days in office – I am clear that fairer outcomes for women need to be at the heart of the consensus we seek.

But this means tackling inequality throughout working life, not just in retirement. Social and labour market policies must go hand-in-hand. It is why it is so important that we build on the steps we have already taken – since 1997 – to tackle past inequality in outcome during working life as well as tackling poverty for today’s pensioners. This is why we have focused on comprehensive measures from early years to extended schools; to extended maternity and paternity leave and flexible working.

I’m very pleased that Tessa is able to be with us this morning – and I know she will say more about the ways that we can achieve greater equality of opportunity for women – building on the work being done by the Women and Work Commission and going further in tackling a gender pay gap which, while still unacceptable, is now at least at its lowest point for 30 years.

We have, of course, also taken major steps in tackling pensioner poverty. The UK pension system is today delivering better average retirement incomes than any previous generation has ever enjoyed – with 1.9 million lifted out of absolute poverty since 1997; 1.3 million of whom are women. Pension Credit has been crucial to this – but the State Second Pension has also helped – with the great majority of those accruing entitlement as carers being women.

Stephen will say more in a moment about the detail of last week’s report and some of the questions that this raises for discussion this morning.

But I would like to conclude these opening remarks by paying tribute to many of you in the room today who have worked so hard to develop the case for lasting change and to renew our focus on this crucial issue of equality.

Today I am here to learn from you – to listen to your views and to understand your ideas. Tomorrow I will need to work with you to make the changes that can extend more opportunities to more people, to improve our welfare system and to protect the values that underpin it.

In particular, I hope we can work together successfully to shape the future of retirement income – a future driven by greater equality, not just in retirement but across our society.

Thank you.