HC Deb 10 January 1995 vol 252 cc10-1
9. Mr. Charles Kennedy

To ask the Secretary of State for Employment if he will outline his proposals to assist long-term unemployed people.

Mr. Portillo

We are pursuing a number of programmes that make it more worth while for people who have been unemployed for a long time to take a job without fear of being worse off and we are providing employers with financial incentives to give such people jobs.

Mr. Kennedy

Is the Secretary of State aware that in an area such as Easter Ross in the Scottish highlands, an area of concern to me and to my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), where there is not much market access to a diversity of jobs because of the concentration of dependence on oil and oil-related industries, long-term unemployment is now very deep rooted? Many people there are finding it impossible to be competitive in the labour market or to enjoy access to the labour market. How can the Secretary of State believe that in that increasingly hopeless situation for many people, the jobseeker's allowance will be of any benefit?

Mr. Portillo

The position is not, as the hon. Gentleman puts it, increasingly hopeless. Even in his own constituency, unemployment has come down by 10 per cent. since December 1992. That underlines the point that jobs will be created in a sustained period of recovery; that involves the Government pursuing policies of low inflation, controlling their spending and controlling their borrowing.

I have been concentrating on helping people over what I call the job hump—helping them to see that when they go into a job after a long period of being unemployed, they will be better off. That is why, for example, the Chancellor of the Exchequer announced in the Budget that people's housing benefit payments will be sustained for four weeks when they take a job and that is why we made it more attractive to employers to take on people who are long-term unemployed by giving them a one-year holiday on their national insurance contributions if they take on people who have been out of a job for two years or more.

Mr. Forman

Has my right hon. Friend assessed the difference between the proportion of long-term unemployed at the end of the recent recession, from which we have now emerged, and the proportion of long-term unemployed at the end of the recession in the early 1980s? Can any lessons be drawn from those two experiences?

Mr. Portillo

Figures obviously change from time to time and I am slightly cautious about drawing too much of a lesson from the figures to which my hon. Friend refers. I draw a lesson from the fact that long-term unemployment in this country is about 35 per cent. of the total and that the average for Europe is about 42 per cent. of the total. I therefore believe that, as in the other things that we have been discussing today, greater labour-market flexibility and active measures taken by the Employment Service directed at the long-term unemployed not only help to bring down unemployment generally, but ensure that long-term unemployment is a lesser proportion of the total unemployment in this country than elsewhere.