HC Deb 11 July 1995 vol 263 cc731-2
3. Mr. Milburn

To ask the Secretary of State for Education and Employment if she will make a statement on inactivity rates. [31784]

Mr. Paice

The United Kingdom has a lower inactivity rate than any other major European Union country.

Mr. Milburn

Is the Minister aware that, over recent years, the number of people who are economically inactive and therefore displaced from the labour market has risen to over 7.8 million? Does that figure not give the lie to ministerial claims of success in tackling unemployment and creating jobs? More significantly, is it not symptomatic of a Government approach that is summed up by the decision to abolish the Department of Employment at the very time when there are more, not fewer, people struggling to find work?

Mr. Paice

I do not think that the hon. Gentleman fully understands what the economic activity and inactivity rates include. He suggests that those who are in the category of looking for work are somehow inactive; they are not. The unemployed are classified as economically active; the inactive figures to which he refers include, for example, the massive increase in the number of young people staying on at school. There has been an increase in the staying-on rate from 48 to 73 per cent. in the past 10 years. That is very good news for those young people's future career prospects, because they will have greater career opportunities and greater earning capacity. That is why the rate of inactivity has not gone down as much as the hon. Gentleman might wish.

Mr. Waterson

Does my hon. Friend agree, when we are talking about inactivity, that those in employment who fail to turn up for work for no good reason should be docked that day's pay, and that that should include Welsh Opposition Members who failed to turn up for Welsh questions?

Mr. Paice

It is entirely up to employers to make their own rules regarding deductions from wages for non-attendance. So far as the House is concerned, that is down to you, Madam Speaker.

Ms Short

I am afraid that the Minister is far too complacent. He seems to be unaware that one in four men of working age is without a job and that large numbers of those people are discouraged older workers. That is a result of one of the few successful Government policies: the encouragement of low-paid work. Virtually all the new jobs in the past 10 years have been low-paid, and have been overwhelmingly taken up by women living with an earning partner.

We have a growing crisis of work-rich families on the one hand and, on the other, work-poor families who are trapped in unemployment outside the labour market because the jobs available will not keep a family. We have a crisis and a soaring benefits bill. Have the Government any plans to address that?

Mr. Paice

Rarely has the House been exposed to such a nonsensical diatribe. The hon. Lady's facts are diametrically opposed to the truth. The simple fact is that in this country, as in every other country apart from Japan, there has been a small reduction in male activity rates, but it is not correct to align that fact with a change in the employment pattern over the past 10 or 20 years.

The hon. Lady suggests that all the jobs that have been created are part-time jobs for women, but that is not true. The vast majority of jobs in the early part of a recovery from recession are part time but, as recovery becomes more established, they become full-time. That is why full-time jobs are being created at the rate of two for every one part-time job at the moment. That is good news for all those who are unemployed and looking for work.

Mr. Alan Howarth

Will my hon. Friend confirm that there has been a substantial rise in economic inactivity over the past 20 years—I believe from 2 to 13 per cent.—among men? Has he noted the especially high incidence of economic inactivity—dropping out of the labour market—among men over the age of 55? Now that the Department of Employment has been merged with the Department for Education, will my hon. Friend give new thought to how we can help to make such involuntary early retirement a dignified condition, and how we can support people who have this experience in developing a satisfying new phase of life?

Mr. Paice

It is not Government policy to encourage people to become economically inactive. We want everyone who wants a job to have the opportunity to find one, but the only way in which we can create jobs is by having a dynamic economy with low inflation, low interest rates and a competitive currency, which are precisely the criteria that we have. That is why we have a sustained rate of growth in our economy, one that is better than those of virtually all of our competitors.