Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on this morning’s speech on welfare reform by the Rt. Hon Iain Duncan Smith, Secretary of State for Work and Pensions:
“Mr Duncan Smith’s approach to tackling poverty, worklessness and welfare dependency is the most visionary outlined by an incoming UK government minister in a generation. His understanding of the complexities of welfare reform is beyond question, while his commitment to ensuring that social justice will define his role both at the DWP and across government as chair of a new Social Justice Cabinet committee should be welcomed across the political spectrum.
“Mr Duncan Smith’s aspiration to ‘making work pay’ and his stress on the central importance of work as the best and most secure route out of poverty is in itself nothing new. But his appreciation that the most vulnerable in society bear the greatest risk when moving off welfare – in terms of loss of the perceived security of benefit incomes – while receiving the least reward in terms of what they can expect in work is significant. Mr Duncan Smith is also spot on in acknowledging that tough benefit sanctions must be applied in the context of providing genuine help to make people on welfare ready for jobs – as he says, ‘opportunity will galvanise more than the stick.’
“However, the biggest challenge facing Mr Duncan Smith as he begins the task of delivering on his vision comes not from within the welfare system that he is in charge of but the nature of the wider economic, jobs and workplace conditions which determine the amount and quality of work on offer to the jobless.
“The UK is currently in the early stages of a jobs-light economic recovery; a recovery moreover than will be stymied by necessary deficit reduction measures which will also limit the cash available to the DWP as it attempts to tackle the multiple social disadvantage – which Mr Duncan Smith’s department in figures published today reckons affects 5.3 million people – that underlies welfare dependency.
“The UK also has far too many poorly managed workplaces offering low paid, low productivity work and characterised by high rates of labour turnover. This is the root cause of limited work incentives and results in the fast revolving door between work and worklessness that increases the risk of moving off welfare.
“Poor management, lack of investment in skills, and a proliferation of low paid insecure jobs that are attractive mainly to migrant workers stand in the way of tackling the UK’s welfare dependency problem. To pursue his vision successfully Mr Duncan Smith will have to lead a broader government drive to fix this structural problem as well as reform our byzantine welfare system.”