Employment

HC Deb 29 January 2004 vol 417 cc380-3

11. Mr. John McFall (Dumbarton) (Lab/Co-op)

If he will make a statement on employment levels and the effect of unemployment on the economy. [151552]

The Chancellor of the Exchequer (Mr. Gordon Brown)

Some 1.7 million new jobs have been created since 1997, helping to create growth on target of 2.1 per cent. last year. The latest figures show that the claimant count is now just 3 per cent., that the labour force survey rate is 4.9 per cent., and that we have the lowest unemployment since the 1970s. For the first time in 50 years, unemployment in Britain is lower than in the euro area, Japan and America together.

Mr. McFall

Since 1997, where have the majority of new jobs been created—in the public sector or in the private sector? In the public sector, where I hope that the Chancellor will continue the drive to cut waste, where exactly have the new jobs been created?

Mr. Brown

I can tell my hon. Friend that 1.7 million jobs have been created, and that 1.2 million jobs have been created in the private sector. Of the jobs created in the public sector, 90,000 are classroom assistants, 20,000 are teachers, 50,000 are nurses, and there are nearly 20,000 more doctors and 10,000 more policemen. Before we made that investment, the lack of nurses, doctors, policemen, teachers and classroom assistants was holding back our public services and our country.

As for administration costs, it is true that the Gershon inquiry mentioned by the Chief Secretary is examining how we can cut the costs of administration in the public sector. I have to tell the House, how ever, that the most appropriate measure of comparison between this year and 1996–97 is planned expenditure on central administration as a percentage of total Government spending, using the measures available at the time. That yields a figure of 4.4 per cent., falling in future years, against a plan of 4.9 per cent. in 1996–97. We do not yet have final out-turns because figures are not available for this year, but based on previous years' experience we would expect this year's out-turn to be lower than the 4.6 per cent. of total Government spending out-turn figure for 1996–97. So we will take no lectures from the Conservative party about administrative costs—that is the party that gave us the worst administrative burden with the waste of the poll tax.

Mr. Roy Beggs (East Antrim) (UUP)

I congratulate the Chancellor on the policies that have been pursued, which have created so much opportunity and employment across the United Kingdom. We in Northern Ireland are enjoying the lowest levels of unemployment and the highest levels of employment in my lifetime. However, I plead with him to take account of the high costs of public liability insurance, which is crippling small businesses in Northern Ireland. Will he bear in mind the fact that success in creating employment in Northern Ireland is largely in the hands of small employers, many of whom cannot afford to pay the huge insurance costs that have been asked for and have simply sold off their businesses, making many people unemployed?

Mr. Brown

I am grateful to the hon. Gentleman. We are concerned about employers liability insurance. It has been raised with the Treasury, and the Financial Secretary has had discussions with business. If the hon. Gentleman wishes to lead a delegation to the Treasury to go through the issues again, we are prepared to listen to his representations.

I thank the hon. Gentleman for welcoming the recent employment figures in Northern Ireland. In every part of this country, particularly in Northern Ireland, employment has been growing and unemployment has been falling. As is acknowledged on both sides of the House, that is a success story for the whole of the United Kingdom. The only people who are not prepared to acknowledge it are the Conservatives.

Ms Sally Keeble (Northampton, North) (Lab)

Is my right hon. Friend aware that in some parts of the country, particularly mine, the historically high levels of employment have created something of a problem of success—a skills shortage? What is he doing to increase skill levels, especially for those who have been excluded from jobs previously, and for women who are returning to work and want to become teachers and nurses, but face difficulties because the student finance and benefits systems do not work well together, or they find it hard to get child care?

Mr. Brown

I know that my hon. Friend has taken an interest in the development of the new deal. There are 1 million more people in training now than in 1997 and we are endeavouring, through the university for industry—now called Learning Direct—employer training pilots, modern apprenticeships and the new deal, to give young people a guarantee of training, and every adult who does not have the skills that are necessary for a modern economy the chance to get them. We are making that investment, especially through the new deal. It is a tragedy for the country that the Conservatives oppose and would abolish the most successful employment programme in our history.

Mr. Mark Prisk (Hertford and Stortford) (Con)

The rising tax burden is, as we have heard, hitting jobs in shops, clubs, bars and hotels, especially through stamp duty land tax. Yet Treasury Ministers seem unaware of what is happening. In a written answer last week, the Financial Secretary told me that stamp duty land tax would prevent the avoidance of stamp duty that was formerly common in commercial transactions".— [Official Report, 19 January 2004; Vol. 416, c. 1030W.]

Yet— [Interruption.]

Mr. Speaker

Order. Front-Bench Members get some elbow room.

Mr. Prisk

Yet—[Interruption.] This question is important—it is about jobs—so I hope that the Chancellor will listen. Despite the Financial Secretary's statement, we learn that business representatives have been told completely the opposite by the leading civil servant in this area—the director of the Stamp Office. He told business representatives that avoidance of duty on leases" is "not currently a problem. Given the impact of the tax on jobs, who is right—the Chancellor's Financial Secretary or his officials?

Mr. Brown

First, that was the subject of the previous question. Secondly, all hon. Members who consider the matter objectively know that there must be a level playing field between leases and purchases, and that we must take action on distortions, especially avoidance that loses revenue that should not be lost to the Treasury. As for the hon. Gentleman's claims that jobs are being lost in record numbers in a series of sectors, he should examine the figures, not least those for the constituency of the shadow Chancellor, where unemployment is 0.9 per cent. The Conservative party should go back to the drawing board, support the new deal and scrap the vicious right-wing policy to abolish it.

Jon Trickett (Hemsworth) (Lab)

Is not it a matter of great pride that in former coalfield areas such as my constituency, where in 1997 there were 500 long-term unemployed adult males, the figure is now 60? The Chancellor should be congratulated on that. However, is he aware of the number of people in former coalfield areas who suffer from long-term limiting illnesses, that exclude them from the labour market? In Featherstone, Hemsworth, South Kirkby and South Elmsall in my constituency, 28 per cent. of the adult population are excluded from the labour market through the legacy of the coal mining industry. Can the Chancellor help those people who want to return to work to do so, and offer care to those who cannot?

Mr. Brown

I am grateful to my hon. Friend for his work to help redundant miners back to work. Work is being done in many constituencies in the area through the reconstruction plans and coalfield regeneration plans to get many people who would otherwise be long-term unemployed into jobs. That is happening throughout the country. Hon. Members will be interested to know that long-term unemployment has fallen by more than 70 per cent. and that long-term youth unemployment has also fallen by more than 70 per cent. In the mid-1980s, there were 350,000 young people in that category, but now there are fewer than 5,000—that means that an average of eight people per constituency are unemployed for more than a year. In the shadow Chancellor's constituency, there are 10 long-term unemployed people over 25.