HM Treasury 3 - 9 November 1999

CHANCELLOR ANNOUNCES FURTHER MEASURES TO INCREASE EMPLOYMENT OPPORTUNITIES AND SUPPORT FAMILIES

Delivering employment opportunity for all, ending child poverty and ensuring fairness for families and communities was at the heart of the Pre-Budget Report published today by the Chancellor Gordon Brown. The Chancellor said:

"This Government's central aim is employment opportunity for all, the modern definition of full employment. Our long term economic ambition over the next decade, for employment, is to achieve a higher percentage of people in work than ever before. "

Building on the New Deal measures already implemented, the Chancellor set out further measures designed to increase employment opportunities. These are:

The Government intends to intensify and extend New Deal 25+ on a national basis from April 2001, building on the principles of the New Deal for the under 25s, bringing rights and responsibilities for the 25+ into line with those for young people. This will include the offer of a job with a private sector employer; or self employment; work-based training or work preparation programmes;

In preparation, the New Deal for over 25s will be strengthened from April 2000. It will provide more support for job search and to enhance links with employers. Extra support will be available to those who do not manage to find a job to address their basic skills needs, including 'soft' skills with access to careers guidance and mentors, and specialist support for those with deep-rooted problems such as alcohol or drug dependency;

There will be tougher implementation of responsibilities for the long term unemployed. New Deal Personal Advisers will identify a number of suitable vacancies and jobseekers will be expected to apply for them. If candidates are unsuccessful advisers will try to establish why and use this feedback to help candidates enhance their employability;

building on the internet jobs bank, using new technologies to deliver an improved service: expanding the nationwide network of touch-screen Job Points and developing links with the BBC and other potential partners to harness the potential of interactive digital television;

For the New Deal for Young People a nationwide expansion of the intensive gateway approach currently being piloted, from Spring 2000, taking into account the lessons learnt from the evaluation of these pilots. In, addition, an extension of the New Deal Innovation Fund, to develop new approaches to help people into jobs;

enhancement to the New Deal for Lone Parents: including inviting lone parents on Income Support with children between the age of three and five to participate; outreach to lone parents with children aged 14 and 15; and

the long term aim of extending the principle of the Working Families Tax Credit (WFTC) to working households without children through an Employment Tax Credit.

The Chancellor announced the Government's aim to reduce child poverty by half within a decade as the Government moves forward with its commitment to end all child poverty in Britain within the next twenty years. Building on the measures announced in Budget 98 and 99 (increases in Child Benefit, introduction of WFTC, new Children's Tax Credit from April 2001, and increases in Income Support), which will together lift 1.25 million people out of poverty (including 800,000 children), the Chancellor announced:

consultation on a new Children's Fund. Recognising that the best solutions can come bottom up from community organisations working in partnership with government. The Fund will support pioneering work by voluntary and community organisations with children in poverty. Work on the Fund will be taken forward over the coming months as part of the 2000 Spending Review in consultation with the voluntary sector; and
the longer-term aim of integrating the Children's Tax Credit, and child elements of WFTC and Income Support into a single child credit paid direct to the main carer, building on the foundation of universal Child Benefit.

Alongside the Pre Budget Report the Treasury has today published a new paper - "Supporting Children Through the Tax and Benefits System". The paper describes the increasing prevalence of low incomes amongst families with children, details the latest research on child poverty and explains how the evidence has informed the Government's policy approach.

NOTES TO EDITORS

1. For further information on the more intensive New Deal for long term unemployed over 25 and the enhanced package for jobseekers see HM Treasury news release 6.

2. Since May 1997, youth and long-term unemployment have been halved. The claimant count measure of unemployment, at 1.2 million, is the lowest for nearly 20 years and there are nearly one million unfilled vacancies in the economy.

3. The New Deal for people aged 18-24 aims to help young people who have been unemployed and claiming Job Seekers Allowance (JSA) for six months or more to find work. It includes: gateway provisions, help with job search, careers advice and guidance; for those who do not find unsubsidised employment, mandatory activity after four months, to help improve their employment prospects; and follow-through to ensure clients are helped to build on their experience and move into employment. More intensive gateway provision is currently being trailblazed in 12 areas, and will be rolled out from April 2000. So far,, nearly 350,000 young people have joined the New Deal and 145,000 have found jobs.

4. The New Deal for Lone Parents is a voluntary programme providing a personalised service combining job search help, advice and training to all lone parents on income Support. As part of a package of enhancement, invitations to participate will be extended to lone parents with children under 5.

5. The 10p rate of income tax was introduced in April 1999. From 2000-01, the basic rate of income tax will be cut to 22p. The point at which employees start to pay national Insurance contributions will be increased by 25% over the next two years so that it will be aligned with income tax personal allowance in April 2001. The National Minimum Wage was introduced in April 1999.

6. Working Families Tax Credit (WFTC) was launched in October 1999. It replaces Family Credit with a more generous tax credit, which will generally be payable to employees through the pay packet from April 2000. By 2001, about 1.4 million working families will be receiving WFTC, around 500,000 more than would receive Family Credit.

7. The Children's Fund will be worked up to the same timetable as the forthcoming spending review and the size of the Fund will be decided as part of this, with a view to it being up and running in April 2001. The Fund will complement how the Government already works with and supports the children's voluntary sector. The review process will be cross-departmental and decisions on how the Fund will be organised within Government is still to be decided. Throughout the process, the Government will engage in active consultation with voluntary and community organisations, particularly on how the voluntary sector can deliver the Government strategic objectives on child poverty, and also on the best way to support the sector without adding unnecessary red tape.

8. The children's paper published today includes:

a survey of the latest research in particular showing the growth in child poverty in the UK and that work is the best route out of poverty; and

an explanation of how measures already announced in Budgets 98 and 99 will provide an extra £6 billion a year for children by the end of this Parliament, lifting 800,000 out of poverty. These include the largest increases in Child Benefit, the introduction of the Working Families Tax Credit, the new Children's tax Credit, and increases in Income Support.

9. "Supporting Children Through the Tax and Benefits System" is the fifth paper in the Treasury's "Modernisation of Britain's Tax and Benefit System" series. Media copies are available from the Treasury Press Office on 0171 270 5238. Non media copies are available from the Treasury Public Enquiry Unit on 0171 270 4558.

HM TREASURY PRESS OFFICE

If you have access to the Internet you can find this news release, children's paper and other Treasury information on http://www.hm-treasury.gov.uk