Over the course of the morning my colleagues and I will be setting out the steps that a Conservative government would take to get Britain working, including ensuring that young people have the skills they need to get into work, and to ensure that Britain's employers and employees are well placed to adapt to the workplaces of the future.
The Shadow Chancellor will also be setting out the wider economic picture and we will also be hearing from outside experts on the challenges we face, and, I hope, from many of you as well.
Whoever wins this general election will face a series of immense challenges in tackling unemployment and worklessness. Despite the recent, small fall in headline unemployment there are still several extremely worrying indicators: long-term unemployment is continuing to rise, the employment rate has continued to fall, and economic inactivity has hit a record high with over 8 million people now classed as economically inactive.
But we need to be honest in stating that this is not simply a result of the recession. We went into the recession with more children growing up in workless households than anywhere else in Europe. We now have 3.3 million workless households in the UK; one in six children grow up in a household where nobody works. This is symptomatic of longer-term, underlying problems. Welfare dependency and worklessness have undermined this country's competitiveness, efficiency and, perhaps most importantly, our social fabric.
The results of this can be devastating. The majority of children living in workless households live in poverty and are more likely themselves to experience worklessness, welfare dependency and poverty later in life.
So our starting point must be that work is the best and most sustainable route out of poverty. But the benefits of work go far beyond simply that of receiving an income. Worklessness doesn't just result in poverty of wealth, it can also create poverty of aspiration. Having a job gives you much more than just a wage. In giving somebody a purpose and a routine it can improve health, self-esteem and social inclusion.
Conservatives are clear that tackling worklessness is not just a matter for one government department, nor is it simply a matter of tweaking the benefits system. We need small businesses freed from the regulations and red-tape that have hampered them. We need to promote science and innovation and develop new industries in this country. We need the economy to grow and corporate taxes to be low. We need volunteering opportunities and engagement with charities and social enterprises. And we need better education, more apprenticeships and new university places so that young people have the chance to succeed. This is the comprehensive, integrated approach that a Conservative government would take.
Last October we launched our Get Britain Working proposals. At the heart of our plans are a single, fully-funded integrated programme of welfare to work - The Work Programme - which will cover more people, intervene earlier and be more focused on results than the current system. In doing so, we will scrap the various New Deal programmes as well as Pathways to Work.
We will retest everyone on Incapacity Benefit to make sure that they are receiving the right level of benefit. We have also taken the tough decision to say that all those who are found to be fit for work should be moved onto Jobseeker's Allowance with the subsequent reduction in benefits.
This will ensure that we can meet the upfront extra £600 million cost of our proposals, but it is also a matter of fairness - it is right that everyone is on a level playing field. And the figures are stark. 90% of people beginning a claim for Incapacity Benefit expect to return to work, but once someone has been claiming for two years they are more likely to retire or die than return to work. That is bad for our society and bad for our economy. And it is bad for every individual who has been written-off and told that they are too ill for work.
We must give faster help to those who need it most - particularly the young and the long-term unemployed. The entry points to our Work Programme will be staged, reflecting the likelihood of claimants finding work under their own steam. Those who have not worked for many years need to move onto the programme rapidly and in some cases immediately. Young people aged 16-24 will be referred after six months.
This recognises the disproportionate impact that a lengthy period of unemployment can have on a young person just starting out in the world of work. This will not be an option after six months as in the current government's programme and crucially the young person will be referred to a welfare to work provider at this stage so that they are within the overall Work Programme and there is someone focusing on getting them into sustainable work. We cannot afford to lose this generation of young people.
However, we know that in this mission we need to make better use of the expertise of the private and voluntary sectors. We know that payments must reflect the fact that different people face different levels of difficulty in getting into the workplace. Clearly somebody who has only recently become unemployed because of the recession is likely to need less help then somebody who has been on benefits for many years. So we will use differential payments to encourage providers to invest more in those who need the most help in getting back into work.
At the same time it is right for us to say to providers that we will not pay for failure. We will insist on payment by results and outcome-based contracts. And we will also be much more robust in our definition of a successful outcome. Placing somebody in work for just a few months does not in my mind represent sustained employment. So we will want to see longer periods of sustained employment, and we will encourage providers to provide post-employment support to ensure that this is the case.
In our Get Britain Working proposals we highlighted the need for more business-led training programmes and we pledged to support training programmes designed by businesses and experts to provide sector-specific skills. Training that has been designed directly by major business and experts will ensure that our Work Programme participants have the soft skills and basic industry skills that employers use to determine who is suitable to be considered for employment with them.
I am delighted to announce today that eleven of the UK's largest hospitality, leisure and tourism companies, including Intercontinental Hotels, Starbucks, Gala Coral and Merlin Entertainment have pledged to offer support to the unemployed through the creation of a 'Service Academy' for the hospitality, leisure and tourism sector. The sector's service academy will provide training for up to 50,000 unemployed people over two years.
The Service Academy will train people for jobs in the sector by fostering a customer service mindset in participants and improving basic skills. This coalition of companies of whom the first names are announced today will work together with People 1st, the sector skills council for hospitality, leisure, travel and tourism, to design a two-week pre-employment course that is followed by a four week on-site work experience placements.
It will not only give people practical skills but also an entry route into a career in a growing area of business.
This initiative will be fully supported by an incoming Conservative government under our Get Britain Working programme. We will support the Service Academy by funding employers to provide the training course, extending Jobseeker's Allowance to participants during the work trial period and cutting bureaucracy by channelling funding directly through People 1st and the employers providing the course. Working in partnership with businesses, this type of innovative solution will ensure that we can make the most of the opportunities that the future will hold.
So the challenges that we face are great, and the context in which we face them daunting. The solutions will not be easy. I am determined to do more to ensure that all people have the chance to work if they are able to do so. We know there are many people who want to work but have been left on the sidelines. Our society and our economy cannot afford to lose out on the potential that is currently being wasted. We can no longer write off millions of people who have something to offer. Giving them hope, and helping all our citizens to fulfil their promise, will be central to re-building a strong economy for the future.