The five pillars of this government when we came into office were:
* A stable and dynamic economy, ending the years of boom and bust and reaching out to the new markets that globalisation and technology are creating
* A welfare state based on rights and responsibility where we gave opportunity to people on benefit to get into work; but demanded responsibility in return; where we came down hard on crime; but offered ways out to those committing crime;
* Modern public services through a combination of investment and reform;
* A modern constitution; and
* Britain ending its years of isolation in Europe and playing a leading role there and elsewhere in the world events that inevitably affect us as a nation.
In each area, our policies differed radically from the previous policies of Labour and Conservative Governments.
In welfare, for too long, the right had let social division and chronic unemployment grow; the left argued for rights but were weak on responsibilities. We believe passionately in giving people the chance to get off benefit and into work. We have done it for 1?? million.
But there are hundreds of thousands more who could work, given the chance. It's right for them, for the country, for society. But with the chance, comes a responsibility on the individual - to take the chance, to make something of their lives and use their ability and potential to the full.
In my speech on welfare reform at Toynbee Hall three years ago I set out the challenge.
We must give the unemployed youth the skills to find a job; give the single mother the childcare she needs to go out and work; give the middle-aged man on a disability benefit the support and confidence to go back into the office.
And we must not only lift people out of poverty. We must transform their horizons, aspirations and hopes as well - through helping people get the skills they need for better jobs, and through giving them chance to save and build up a nest egg.
Only in this way will we drive up social mobility, the great force for equality in dynamic market economies.
To do all that, ours has to be an enabling welfare state - one which helps people to help themselves.
That is the key to Job Centre Plus. It embodies on the one hand the enabling welfare state, spreading opportunity - and on the other our reform of public services, as a new responsive service focused on the jobless.
But for it to work, it has to be founded on mutual responsibility.
Government has a responsibility to provide real opportunities for individuals to gain skills and to get into work that pays. But individuals also have a responsibility to grasp those opportunities.
We are now seeing the beginnings of a sea-change in how people view our welfare state. There is growing public support for a welfare state that tackles poverty at its source; that gets people into work; that offers people hope - in exchange for a commitment to help themselves.
Progress so far
We inherited a nation in which the economy swung between boom and bust, with record levels of social security spending alongside high unemployment and desperate child poverty.
I don't doubt the challenges ahead. But we have started to make real inroads:
* We have a stable economy. Unemployment is at its lowest levels since the 1970s, long-term youth unemployment is virtually eradicated, and half of lone parents are in work - for the first time in 20 years.
* By reducing unemployment we are saving almost ??4bn a year - cutting the bills of social and economic failure and allowing us to spend more where it will do most good.
* Leaving aside the areas such as tax credits, child benefit or extra money for pensioners where we are deliberately spending more for good causes, welfare bills in Britain have been falling in real terms and the past five years.
* We are rewarding work through the National Minimum Wage and the Working Families Tax Credit, which helps almost 1.3m families.
* We have changed the culture of the welfare state - it is now universally accepted that it is right to expect unemployed people to look for work and take jobs, that is right for lone parents and others to come in for work-focused interviews.
* We have turned the tide on child poverty - half a million children lifted out of relative poverty by 2000/1 - on line for our target by 2004.
* We have improved the skills of hundreds of thousands of adults. Over 120,000 have gained Adult Basic Skills achievements since April 2001 and nearly 700,000 learners have had an extra 1m learning opportunities.
* We have cut the numbers of fraudulent claims on Income Support and JSA by 18%.
These are solid foundations on which we can and must build further welfare reforms - to move us closer to our historic goals of full employment and the eradication of child poverty.
Today my focus is on people of working age. I want to outline four parts of our welfare strategy.
* A new public service fit for a dynamic labour market - responsive to employers and potential employees alike.
* More active strategies to help lone parents and sick and disabled people make the break-through into the world of work.
* A new programme to get Jobcentre Plus clients into higher-skilled, better-paid jobs.
* And policies to encourage saving for low earners and for the next generation.
A new public service for a dynamic labour market - Job Centre Plus
First, Jobcentre Plus.
This Government's defining priority has been - and defining legacy will be - the reform of public services. Our hospitals and schools were chronically under-funded and unreformed for decades. But services for the jobless were hit even harder.
The state of most benefit offices was testament to the previous Government's approach - take your money and get out of our sight. In their view claimants were there because it was their fault - so it didn't matter if they had to wait in queues for hours on end, in tatty offices, having to shout their private business at staff through screens.
How inspiring to be able to contrast that old picture with our new Jobcentre Plus offices. Job Centre Plus exemplifies both an active welfare state and our vision for public services.
An active welfare state which brings together benefit offices and job centres so that instead of simply dishing out cash, personal advisers provide everybody coming through the door with advice and support to help them into work or at least get them closer to the labour market.
This is a welfare state which reflects all our responsibilities: the responsibility we have to engage actively with the jobless to provide them with opportunities; their responsibility to engage actively with us and take those opportunities.
Job Centre Plus embodies key principles of public service reform.
First, customer focus.
Instead of the old benefit mentality, individuals are treated as customers and potential employees - given high quality advice and support by professional advisers in a business-like environment. But employers are our customers too. Jobcentre Plus advisers have to understand not only claimants' work skills but also the requirements of particular employers and jobs. And that is a massive culture change.
Second, empowering front-line staff. Simply handing benefits out was demoralising and unsatisfying for staff as well as claimants. Talking face-to-face with clients about their prospects for work, personal advisers will make a real difference.
And we're helping them to do that by giving them more freedom to decide what their client needs. Take the new fund for personal advisors to pay for a bus pass, new suit, tools - things that make the difference between getting and not getting a job. I want to build on that flexibility - allowing greater autonomy for local managers to experiment to meet their targets. We need to be creative about how to reach the people who don't come to us.
And third, ensuring that Jobcentre Plus embodies the best of the public and private sector - because no one has a monopoly on best practice.
The best Employment Zones - run by Working Links, a PPP, or by the private sector -are achieving impressive job outcomes and are popular with claimants. And we're picking up some valuable lessons:
* begin with a can-do mentality which sees claimants as potential employees;
* ask them why they think it is that they are not working - staggeringly, this is often the first time someone long-term unemployed has been asked that;
* give your front-line staff greater autonomy - and with it responsibility and flexibility;
* and combine strong incentive payments for jobs with real leadership, performance pay and team working.
As we take Jobcentre Plus forward, we'll be looking carefully at how to transfer these ways of working into our own practices. Subject to evaluation, we will extend and improve the employment zone approach to help other client groups, such as lone parents.
Jobcentre Plus is already up and running in 56 offices and I am able to confirm today that we intend to roll out the new, one-stop service across the entire country - 225 offices will be rolled out by spring of next year. Today we are announcing 50 locations where we aim to have Jobcentre Plus offices open by next March, in places such as Conventry, Manchester and Taunton. This is a major programme of public service investment which will transform the culture of our welfare system and the opportunities it opens up for people.
More active strategies to help lone parents and sick and disabled people into work
But our vision for welfare reform stretches beyond the unemployed. It also encompasses those who used to be left to fend for themselves - written off because they were judged too difficult or too expensive to work with- lone parents, people with health problems, disabled people.
The challenge for our second term is to reach those people with particular barriers to work. We must do this not just because it is right - but because we simply cannot afford to continue wasting the talents of so many of our citizens.
There are over 1.6m lone parents with 2.8m children in Britain - and over half of those children are growing up at risk of poverty. Those children's best chance of a better future is for their parents to find routes into work. Half of all lone parents are already working - and the majority of those who aren't say that they would like to in the short or medium term.
But they face very real barriers - the shortage of childcare, the need for new skills, perhaps a lack of confidence from being out of the job market, and the need to find a job which fits in with their caring responsibilities.
So we're investing in the support they need.
* ??146m for the New Deal for Lone Parents - 1300 Personal Advisers, who have given 315,000 lone parents help and advice; almost half have found work.
* From 2003 a guaranteed minimum income of ??179 a week for a lone parent working 16 hours a week.
* Over ??300m invested in childcare since 1997, creating places for more than 900,000 children.
That investment is our side of the bargain - helping lone parents to help themselves. In return, we expect them to come and discuss with personal advisers how they can get back to work. Almost a quarter of lone parents have no qualifications. And this is in a world which puts a premium on skills. We want more lone parents to have the chance to be screened for basic skills needs. Where appropriate, they will be offered basic skills courses to help them get back on the ladder to work.
There will always be lone parents who face particular difficulties such as those caring for disabled children or those with young children - who may not be able to work. That's why we are protecting those children from poverty through the extra investment in child benefit, tax credits and Sure Start. The strategy is already working - more lone parents in jobs and lone parent poverty down.
Sick and disabled people
Those with health problems or a disability of some kind also face barriers to work. But they have the abilities and talents that we need. And 1 million say that they would like to work.
Of course there will always be some people who may never realistically be able to work - and they must have security and inclusion. That is why we have introduced extra help through the enhanced disability premium, improvements in carers benefits, more investment in social services and new civil rights for disabled people. Jobcentre Plus will help this group too - because it is also about making it easier for people to get the benefit that they are entitled to.
But many people with a health problem or disability could and do want to work - yet don't. It is a scandal that 2.7m people on incapacity and disability benefits are written off, left to drift into long-term incapacity and unemployment. Five months into their claim for incapacity benefit, over 90% of people expect to return to work. But in practice, 44% will still be on IB six months later; and of those fewer than one in five will be working five years after that. Something is wrong - the current system is working against people's expectations.
We are investing:
* ??100m on the New Deal for Disabled People;
* ??120m so far on the Disabled Person's Tax Credit, to help make work pay;
* and introduced the Disability Discrimination Act and the Disability Rights Commission to tackle discrimination.
And in return for that investment we expect those on Incapacity Benefits, like lone parents, to come in and discuss their work prospects with a Personal Adviser - when they first become sick or disabled and every 3 years for a review.
The next steps we are now considering will involve doing more -
* by working with employers and health professionals to catch people early and to prevent ill health becoming chronic;
* to ensure that tailored rehabilitation and employment programmes are available to help IB claimants get back to work;
* to promote IB claimants to employers as potential employees and to tackle discrimination; and
* more to ensure that work pays.
New Opportunities for Skilled Jobs
Our priority has always been getting the jobless into work. But we want everyone to have the chance to develop their talents and aspirations. We want to make social mobility a reality for all.
That is why we have developed Ambition - specific programmes to enable people to train for - and get - higher-skilled, better paid jobs.
Our Ambition programmes will begin running this summer in the construction, retail and IT sectors and I am delighted to announce today a further programme, Ambition: Energy.
The leading Chief Executives of the energy sector are coming together to take Ambition to their sector. Over the next three years this programme aims to fill 4,500 jobs across occupations in the fields of Gas and Engineering Construction - with water and renewables to follow.
The pilots show just what a difference Ambition can make. For example, Jan Muniza, a single mother with a six year-old daughter, had not worked for 10 years. She completed an NVQ2 in gas installation and maintenance as part of a project managed by the Gas and Water Industry National Training Organisation. Now she has a job with British Gas Home Services.
This is an excellent example of how we can - and must - work in partnership with employers to our mutual benefit. Employers gain staff where there are skills shortages. And the new employees gain a real chance to fulfil their ambition and get a better job.
I pay tribute to everyone who has been involved in the development of this programme and wish you - and all its participants - every success.
I would simply urge that, as you look for potential participants, you cast your net wide, keeping an open mind to the talents and potential of others as well as the unemployed - lone parents, the sick and disabled, and the over 50s. Because successful modern workplaces recognise that embracing diversity and adopting family friendly work practices enables employers to get the best person for the job and brings important business benefits.
Create a nation of savers and asset-holders
But if we are serious about transforming the welfare state, our strategy has to be about more than helping people into work and relieving poverty. To enable people to be independent and make their own choices, they need the back-up of having some savings in the bank or a nest-egg.
Money put aside changes your horizons. It makes you plan, brings responsibility, offers protection and opportunity. And I want to ensure that those on lower incomes - and the next generation - can share those advantages.
We want people to save more for their retirement so that they have a decent income to live on - Stakeholder Pensions and the Pension Credit will reward those who have managed save as they approach retirement.
This summer the first pilots of the Saving Gateway begin. We are working with community organisations to enable people on low incomes to save - rewarding their savings with government money - at the same time as getting financial education.
And the Child Trust Fund will break new ground - offering a stake in society to the next generation. Imagine embarking on life at 18 without skills, with a poor education, with little confidence, no work experience and no financial backing from your family.
The Child Trust Fund will help change that prospect by encouraging parents, grandparents and others to give those young people a spring-board for their future. And it too is founded on mutual responsibility -the government provides the endowment for each baby, and then parents and the wider family contribute.
All of our reforms have the same underlying principles - opportunity, fairness and mutual responsibility. We want to give people the chance to fulfil their potential. We want to raise people's expectations and their self-belief, by giving them the tools to help themselves.
Our strategy is working. We have a stable economy andgreater social justice. Fewer people are on benefits - enabling us to spend more on children, pensioners and the severely disabled - and to reward work. And the welfare state is becoming popular again.
These are the principles on which Job Centre Plus is founded. On which our approach to poverty and opportunity is founded. On which our approach to assets and savings is founded. And I believe that will ensure the success of the second stage of our reform of the welfare state.