John Hutton – 2007 Speech on Ethnic Minority Employment

Below is the text of the speech made by John Hutton, the then Work and Pensions Secretary, to the Women’s Enterprise Project in Bethnal Green, London, on 28th February 2007.

On a day when the final report of the Equalities Review has brought the challenges of achieving true equality in Britain into ever sharper focus – I am grateful for the opportunity to join you to discuss the barriers that still too often prevent women in Britain’s ethnic minority communities from finding employment.

Ten years of progress in employment and welfare reform has made a real difference to Britain today. Record investment in Jobcentre Plus and the New Deal means there are now more people in work than ever before; over 2.5 million more than in 1997 and nearly a million fewer on benefits.

Ethnic minority communities have benefited from the progress we have made. Jobcentre Plus, for example, has helped nearly a quarter of a million people from ethnic minorities move into work over the last few years.

As today’s Equalities Review acknowledges, Britain now has more advanced and effective equality legislation than most other countries; our equality commissions and the forthcoming Commission for Equality and Human Rights represent a framework to tackle discrimination that is unrivalled in Europe. And in just the last three years, we have managed to cut the employment rate gap facing ethnic minorities by nearly 2 percentage points – including improvements for the vast majority of ethnic minority groups.

Yet despite this progress, the employment rate gap between ethnic minorities and the UK as a whole, still stands at around 15% – and a young British Asian women starting out in work today, will have to wait until her retirement before she can expect to see the employment rate for ethnic minorities at the same level as the UK average.

The employment rate for ethnic minorities in East London is less than 50%; and here in the borough of Tower Hamlets – where the percentage of ethnic minorities as a proportion of the working age population is the second highest of all local authority districts in Great Britain – the employment rate is less than a third.

And the rates for women are significantly worse. The unemployment rate for Black Caribbean women in Tower Hamlets, at 11%, is almost double that for Bradford. And across the five Olympic boroughs the employment rate for Pakistani and Bangladeshi women is less than 1 in 5.

We can not hope to have a socially cohesive society unless we are prepared to challenge these wide differentials in employment rates.

But these statistics are not just a scar on Britain’s society today; they are the enemy of Britain’s prosperity and progress for the future.

In London over the next 20 years, ethnic minorities are expected to account for around three-quarters of the growth in the potential workforce.

I do not believe we can have an economically competitive and skilled labour force in the future, if the lower employment rate of ethnic minorities today consigns many children – tomorrow’s workforce – to growing up in poverty. Because poverty is the breading ground for low aspiration and low achievement.

Today, that is the reality for over half of Black British children – and over two-thirds of Pakistani and Bangladeshi children. The question for all of us is whether we believe we can change the future for these communities and for the young people within them.

In fact – such are the barriers to equality in our society – even being in work doesn’t always necessarily mean escaping from poverty. When ethnic minorities on average earn a third less than their white counterparts; when Pakistani and Bangladeshi children in households with at least one earner are still statistically more likely to be in poverty than not; And when working Pakistani and Bangladeshi households are more likely to be in poverty than workless white households.

If we are going to succeed in changing the future, then we can start by challenging the myths and the misperceptions.

What Account 3 and the Women’s Enterprise Project are showing is that the old sterotypes are simply not true.

Many women from ethnic minorities want to work. Many husbands and fathers actually support them to do so.

Often the support offered by local organisations working at the heart of the community doesn’t just help the individual; it transforms opportunities for the whole family. Take, for example, the lady whose family was on benefits. But after training with Account 3 was able to get enough money to support her husband to train to do the Knowledge; and when he qualified they were able to go on and get their own flat. Later they set up their own business; the opportunities they were able to offer their children transformed in only a few years.

As is so often the case; success fuels further success. The achievements of one family inspire another – raising ambition across the community. And there is perhaps no greater example of this growing ambition than with those setting out in business on their own. Today the Women’s Enterprise Project is creating around 35 new businesses a year – working with more than a hundred women in the local community; enabling them to test out ideas in a safe environment and providing support well beyond the creation of the business itself.

The next generation are looking to push the bar even higher. We should encourage them to do so. An Equal Opportunities Commission report found that 90% of Bangladeshi girls surveyed did not agree that their parents would expect them to get married and have children rather than follow a career.

One respondent – a 16 year old Black Caribbean girl said:

“I intend to work hard and get the job I want. I also intend to be successful and to make me and my parents proud.”

The idea that success at work would make her parents proud says a lot about how wrong many people’s assumptions are about attitudes to work amongst minority communities.

In fact, in the Equal Opportunities Commission report, one in five young Pakistani and Bangladeshi women employees are now aiming to be their own boss, compared with only one in ten young white British women employees.

And of those in employment, Black Caribbean, Pakistani and Bangladeshi women under 35 are now more likely to aspire to senior positions when they have dependent children than white British women.

So it is about how best to support the fulfilment of this ambition – that I want to discuss with you today. And I’d like to offer a few thoughts about how we can start this discussion.

Firstly, I believe we need to make significant changes to the nature of the support on offer to help people from ethnic minorities move into work.

This is one of the principal reasons why I have asked David Freud to review our welfare system as part of the wider policy review process currently being led by the Prime Minister.

The hallmark of this Government’s welfare reforms has been our movement away from the passive one-size-fits-all benefit dependency of the past towards the creation of a more active approach tailored to the specific needs of individuals.

If we are to provide better help and support to those furthest from the labour market we have to build on this progress – moving further away from the traditional approach – based on what type of benefit someone is claiming – to one based on individual needs.

An approach that offers new and ever more tailored support in return for individuals taking up the responsibility to do all they can to help themselves.

We are now beginning to devote more resources in this way. But this doesn’t necessarily mean expanding State provision. Rather it means drawing on the expertise and contribution of providers in all sectors – whether public, private or voluntary.

It’s about providing greater flexibility for local community based organisations to work together to find local solutions. It means Government simplifying the existing myriad of short-term funding contracts, in favour of a clearer funding structure. It means moving towards providing more support for innovation with longer-term payments based on clear outcomes, and more flexibility for local organisations to determine the best approach to support for their people.

What does this mean for the hardest to help? It means exploring outcome-based funding to reward successful welfare to work providers – that places a higher priority on these groups; that offers providers greater rewards for helping those who are furthest from the labour market – including specific individuals or ethnic minority groups. Not just overcoming the barriers to finding work and then pulling up the drawbridge of support; but rather overcoming the barriers to staying in work and progressing within the workplace too.

It means recognising that the State is not always the best vehicle for providing support. That community organisations – like the Women’s Enterprise Project here in Bethnal Green – have a unique ability to build relationships and inspire trust – that goes far beyond what the State can sometimes do.

And there should be more room in our welfare system for local flexibility and freedom.

The City Strategy brings together a consortia of local stakeholders to improve the co-ordination and delivery of support for jobless people in key areas across the country – including in here in East London.

We believe that by freeing resources from Whitehall and giving power and responsibility to local communities, we will achieve better outcomes for local people. But this has to translate into results. And in many City Consortia areas – including in East London – that has to mean better employment outcomes for ethnic minorities, and especially for women.

Through this partnership-based approach, together with improvements in training and skills – such as the increased emphasis on English language training for benefit recipients we announced earlier this month – I believe that we can offer new and unparalleled support to help people from ethnic minorities acquire the skills and expertise to realise their ambitions in the workplace.

But our success will depend equally on women who are out of the labour market actually taking up the opportunities available to them – with the same ambition and commitment that we see showcased by groups like the Women’s Enterprise Project on a daily basis.

Of course, also fundamental to our success will be whether we can deliver a step change in tackling workplace discrimination.

Analysis suggests that potentially up to half of the ethnic minority employment gap could be explained by employer behaviour.

Currently, Black Caribbean, Pakistani and Bangladeshi women are more likely to be graduates than white British women and men. Yet Pakistani female graduates are over four times more likely to be unemployed than white female graduates. And those in work are less likely to reach senior positions than white British women – despite being more highly qualified.

We need to understand more clearly the factors that are driving this discrimination.

Alongside Trevor Phillips’ Equalities Review, my Department is today publishing a new research report which for the first time presents clear evidence of a Muslim employment gap. It analyses the probability of being in employment based on different combinations of ethnic and religious group. It finds that for women, Muslims of all ethnic backgrounds – whether Pakistani, Bangladeshi, Indian or even White – face a higher employment penalty than any other religious group. It’s even the case that a White Muslim, faces a higher employment penalty than a Pakistani of no religion. The analysis also suggests that Muslim men of all ethnic backgrounds face similar employment penalties.

Of course, there will be those who suggest this is simply a cultural issue.  And this may play a part in the calculations of the employment penalty. There is some evidence in the Equalities Review today that some people don’t aspire to enter the labour market.

But we also know that such generalisations are a poor excuse for avoiding the fundamental problems of inequality and discrimination. Or for ignoring the other constraints that ethnic minorities often face – such as lack of access to childcare.

We simply can not afford to ignore the very real possibility that specific discrimination based on religious practice could be an important part of the challenge we face in breaking down barriers to work for Britain’s ethnic minorities.

The Equal Opportunities Commission report, for example, found that compared with their white counterparts, working Black Caribbean, Pakistani and Bangladeshi women under 35 are three times more likely to be asked about plans for marriage and children at job interviews; much more likely to experience negative attitudes because of their religious dress and 50% more likely to have difficulty finding a job.

It is vital that we work together to better understand and address this problem. Whatever the underlying causes, this employment gap is entrenching deprivation in Muslim communities and can only exacerbate the social tensions and alienation that we all want to tackle.

There are many forms of ethnic, religious and cultural discrimination – some long entrenched, others are newer and worrying trends. We have to find a way to work with business to eliminate this discrimination – whatever religious or ethnic guise it takes.

Since the 2001 amendment to the Race Relations Act, public authorities have a statutory duty to take proactive steps to eliminate unlawful racial discrimination and to promote equality of opportunity and good race relations.

As Trevor Phillips has argued today, we must now build on this to ensure that our partners do more to promote equality and to highlight the importance of tackling racial discrimination in the workplace.

But we should be absolutely clear about one thing. This is not about positive discrimination or quotas. It can not be onerous on business; the argument is rather about the increasingly crucial value that promoting equality brings to business, not the costs it imposes. It’s about Government leading from the front and asking those supplying Government to adopt the same principles.

We must also go further in changing the way we address equality issues across Government. Replacing the silos of individual departments with a new cross-Government commitment that better co-ordinates Government action on equality issues.

As part of this we need to re-shape the Ethnic Minority Employment Task Force to make it a more pro-active strategic body, focusing on specific measurable objectives. Earlier this month, the Employment Minister Jim Murphy wrote to all Task Force members to propose a more focused set of priorities around procurement and employer engagement – including tackling employer discrimination, not just in recruitment to the workplace but also in progression through it.

I have today asked Jim and the Task Force to report back to me with a set of specific and practical proposals in these areas – ahead of a Ministerial summit in May. In doing so, I want them to consider the specific issues around discrimination based on religious practice. And to consider the issues of how best to promote and support aspiration – including addressing concerns such as affordable childcare.

I want them to draw on the recommendations of the forthcoming reports from the Business Commission and from David Freud’s review of our welfare system. And to engage with both business and ethnic minority communities augmenting the membership of the group as necessary to achieve a much greater representation from ethnic minority communities – with leading ethnic minority men and women drawn from both the business and voluntary sector.

I want to spend the rest of the time this morning listening to you – to hear your perspective on the challenges we face in breaking down barriers to work – and tackling inequality and discrimination in the workplace.

So let me just conclude by saying that too often people have believed these problems are so engrained in our society that they can never be overcome.

The French author and playwright Honore de Balzac, once wrote:

“Equality may perhaps be a right, but no power on earth can ever turn it into a fact.”

Today we are entitled to be more optimistic. There is a power on earth that can turn equality into a fact. It is the strength of our collective ambition as a society. The progressive force for good that says someone’s origins – whether ethnic background or social class – need no longer determine their destiny. I have no doubt that the vast majority of people in Britain share this belief in fairness and equality. That is one more reason to believe that together, we can change the future.