Chris Grayling MP: A new kind of welfare state

Chris Grayling MP, Shadow Secretary of State for Work and Pensions and 'Shadow Minister' for Liverpool, explains what a Conservative government would do in order to tackle welfare dependency.

A few weeks ago I was walking through Toxteth with a local youth worker. As we walked down one street I asked her how many people in the street had a job. She paused for a moment and did a brief mental count. Three, she said.

That street is less than a mile from Liverpool City Centre, site of the development of one of Britain’s biggest new shopping centres, the new Echo Arena, a planned cruise ship terminal, new hotels and plans by Peel Holdings to turn part of the old docks area into a Canary Wharf style development.

It just makes no sense at all. People trapped on benefits – a dependency culture – such a short distance from an abundance of new opportunity. It has to change.

Britain has nearly five million people on out of work benefits. We have proportionately more children being brought up in poverty than any other country in Europe. We have a cycle of dependency and underachievement that is spreading from generation to generation. We are paying a huge human and financial cost.

It’s against that background that we set out, in January, the outline of our plans for the most radical reform to our welfare state for half a century and more.

We have to move away from a system that is founded on entitlement to one where both state and the individual have clear responsibilities. We need to improve the help we give to people to get them back into work. But in return they have to take part in a clear process to get them there. If they refuse, they will lose their out of work benefits.

In short, we need a system where it is not possible to spend long periods of time at home doing nothing while claiming benefits. Unless there is a genuine medical reason for doing so.

Under our proposals the whole of the welfare to work process will be contracted out to third party organisations from the private and voluntary sectors on a payment by results basis. They’ll do the job, but will only be paid once someone is back in work and we are getting the savings because they aren’t claiming benefits any more. That’s how we make the sums add up.

There’ll be a network of back to work centres around the country, with tailored support catering for people ranging from conventional job seekers to people trying to overcome incapacities and disabilities.

Participation will be mandatory. Those refusing to take part will have their benefits suspended until they do.

Conventional job seekers will be referred automatically after a maximum of six months of independent job search. People under 21 will be referred after three months claiming, to help break the cycle of generational worklessness that exists in some areas.

Those claiming Incapacity Benefit will be asked to attend an independent medical assessment, and will be automatically be referred to the programmes if the assessment says they have the potential to return to work.

And it will be obligatory to accept a reasonable job offer, with much tougher penalties than at present.

Finally, for those who don’t find work or don’t try, there will be mandatory community work programmes for those who have claimed Job Seekers Allowance for more than two years cumulatively out of the previous three.

When we announced our plans, two opinion polls showed overwhelming support for them. That prompted the Government to try to march onto some of this territory. But the reality is they just don’t know how to do it properly. Their efforts are tentative – we are about to get yet another discussion paper. They’ve been using our language to get headlines – but there’s little tangible action. And their record is one of failure.

The next stage of the work for us is to develop a detailed implementation plan ahead of the publication of a White Paper in the run-up to the General Election. We have a team of analysts in place to support that work. And we are talking to those who have made this work both on a small scale in the UK, and much more effectively in other countries to ensure we refine our approach to ensure success.

The one obvious question right now is what happens if unemployment starts to rise. Where will the jobs come from? It’s certainly more difficult running a back to work programme in tough times. But the evidence from elsewhere, particularly in the United States in the recession at the end of the dot com boom, is that the trend of improvement that a programme like this delivers is not halted by economic difficulties.

And we can’t afford to ignore the challenge of worklessness. It makes no sense to have millions coming here to work, while millions of British people are sitting at home on benefits. With all the social problems that benefit dependency brings with it.

Changing that will be crucial to our success when we are back in Government.

This is the second of ConservativeHome's five-part 'A Government Worth Having' series.  Michael Gove wrote about schools policy yesterday.  Nick Herbert will write about rehabilitation and crime tomorrow.