HC Deb 19 June 1986 vol 99 cc1185-7
7. Mr. Tony Lloyd

asked the Chancellor of the Exchequer what is the cost to the Exchequer of unemployment in the north-west region.

Mr. MacGregor

A regional breakdown of unemployment and supplementary benefit paid to the unemployed would be available only at disproportionate cost. It is not possible to estimate the tax revenue forgone.

Mr. Lloyd

I thank the Minister for his comprehensive answer, because one of the bones of contention is that this Government, who have no interest in regional affairs, do not even know what the true cost of unemployment in the north-west is. The social costs are massively higher than even the direct economic costs to the Treasury. If the Government are sincere about unemployment, what practical steps are being taken that will lead to a reduction in unemployment, and when will that begin to take place?

Mr. MacGregor

All the Government's economic policies are designed to produce a more competitive economy which helps with the creation of real permanent jobs. The hon. Gentleman will be aware that, at a time of a rising labour force, the success of this is measured by the fact that nearly 1 million net new jobs have been created in the economy as a whole since 1983. He will be interested to know that in that figure there are 82,000 jobs in the north-west. In addition, he will be aware that the northwest has received a substantial and fair proportion of the specific employment measures that have been introduced by the Government and added to in the last Budget. That represents a total expenditure of £3 billion this year, compared with £300 million in 1979 when the Government took office.

Mr. Neil Hamilton

Is my right hon. Friend aware that in my constituency, which is in the north-west, unemployment is at half the national average? One reason for this is that firms are rushing out of Manchester, because of the lunatic policies of the local authorities there, into Cheshire, where the Conservative-controlled local authorities have much more sensible policies, producing lower rate burdens?

Mr. MacGregor

My hon. Friend makes a fair point. All those who urge unnecessary higher spending in local authorities should be aware of the consequences of that for firms which find their costs increased by much higher rates.

Mr. Parry

Is not the real cost in regions such as Merseyside, the north-west and the north-east, the mass unemployment, the human misery, the marriage breakups, the nervous breakdowns and the number of young people committing suicide because of long-term unemployment? Is this not the real, terrible cost of mass unemployment in our regions?

Mr. MacGregor

That is precisely why we have increased substantially the amount of money spent on employment and training measures during our period of office. The hon. Gentleman must know that if public spending rises to the level advocated by his Front Bench that will create much greater unemployment in firms which are doing well in our economy.

Mr. Churchill

As a Manchester Member, may I say that it is a matter of considerable satisfaction that more than 80,000 new jobs have been created in the north-west since the 1983 general election'' If that rate of job creation is projected into the months ahead, at what point does my right hon. Friend foresee it overtaking the rate at which new people come into the labour force, thereby bringing a net reduction in the number of unemployed?

Mr. MacGregor

My hon. Friend has fairly drawn attention to the considerable increase in the labour force in recent years. In fact, there was an increase of more than 560,000 in the last year for which figures are available. That demographic factor is now beginning to change and it will be a helpful factor in dealing with unemployment.

Mr. Eastham

May I draw the Minister's attention to the Employment Select Committee's investigation into long-term unemployment, in which it points out that some people have been unemployed for three years? Is it not time that the Government seriously considered all those facts, with a view to taking positive action to alleviate the unemployment problems of these people?

Mr. MacGregor

The hon. Gentleman will know that the Government gave a detailed response to the first report of the Employment Select Committee, which has led to the Committee revising its proposals considerably in a downward direction. The restart programme, which is now going nationwide, is designed especially to help the long-term unemployed, and we are undertaking many other measures. It is crucial to know at what point extra public expenditure on these measures becomes counterproductive, not only because they do not produce real benefit in terms of extra places, but because they are a cost on existing employers.

Mr. Favell

Is it not becoming increasingly clear that the more a town hall spends, the less there is to encourage new enterprises into an area? In my constituency of Stockport, which to the uninitiated is probably indistinguishable from Manchester, it takes half as many men to empty a dustbin as it does in Manchester, and unemployment is now less than 10 per cent, which is far less than the regional average and, indeed, is less than the national average.

Mr. MacGregor

My hon. Friend makes a fair point, of which I hope everyone in the north-west will take note.

Mr. Hattersley

Will the Chief Secretary simply give one straight answer to one straight question? How many jobs have been lost, net, in the British economy since the Government were elected seven years ago?

Mr. MacGregor

There was a considerable reduction in jobs in the period 1979 to 1981. It was a good deal less than 1 million—about 700,000. A large part of that was in the period 1979 to 1981, when we were coping not only with a worldwide recession but with the considerable overmanning that took place under the Labour Government. Since 1983 that trend has gone substantially the other way, and there are now nearly 1 million net new jobs.