HL Deb 18 November 1982 vol 436 cc652-6

4.33 p.m.

The Minister of State, Northern Ireland Office (The Earl of Gowrie)

My Lords, it may be for the convenience of the House if I now repeat a Statement on unemployment statistics, which has been made in another place by my right honourable friend the Secretary of State for Employment. My right honourable friend's Statement is as follows:

"With permission, Mr. Speaker, I wish to make a Statement about the unemployment statistics.

"In March 1981 a scrutiny under the auspices of Sir Derek Rayner, on the payment of benefit to unemployed people, recommended that registration at Job Centres by unemployed people claiming benefit should become voluntary, since it was not an effective test of availability for work and abolition would benefit both job seekers and the employment service. Acceptance of that recommendation was announced in July last year and it came into effect on 18th of last month. Job Centres can now cut out wasteful procedures and concentrate on their main task of matching jobs and job seekers. Unemployed job seekers who can find work for themselves are no longer compelled to visit Job Centres. Claimants need visit only the benefit office, where a test of availability for work now takes place. This simplification of procedure will lead to savings of 1,350 staff and £10 million a year.

"As a consequence of voluntary registration, the records of people registering at Job Centres are no longer a valid basis for the unemployment statistics. Because of this, the unemployment count has been transferred to benefit offices and based on the records of claimants, which are held mainly on computers. This change was explained in the Employment Gazette in April last year. Attention was again drawn to the forthcoming change in a reply to a Parliamentary Question on 29th July this year and a further article appeared in the Employment Gazette in September.

"The figures for November will be published on the new basis. To enable a fair comparison of past and future unemployment figures, I am today publishing figures on the new basis for the past year. An explanatory note is available in the Vote Office.

"The new figures are more accurate. They give a more up-to-date picture on the day of the count. And, instead of depending on costly manual counts in hundreds of offices throughout the country, they will be based on carefully tested and working computerised systems.

"Although the new totals differ from those which the old system produced, the trend in unemployment shown by the new figures is no less reliable. In the new totals, severely disabled people who were formerly excluded are now included. On the other hand, a count of people who register at Job Centres but who do not claim benefit is no longer possible, and they are not included. Finally, the count is reduced because the use of the benefit computer records removes far more of the people who find jobs in the period immediately before the day of the count. Under the manual system, these could have been recorded as unemployed for up to a fortnight or more after they had started work.

"Over the past year, the reduction between the new count and the old would have varied from month to month. It would generally have been between 170,000 and 190,000. In October, the difference was exceptionally large at 246,000. Nearly half the difference is the result of the more accurate count which in October removed about 100,000 people who were no longer unemployed. To ensure a fair picture, there will be a special count in the summer of new school-leavers who are not yet entitled to benefit.

"The new figures do not make the problem of unemployment any less serious. They do give more accurate and less expensive statistics."

My Lords, that ends my right honourable friend's Statement.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Earl for repeating the Statement. Unemployment statistics are important and sensitive matters at all times, but especially so now when unemployment levels are terrifyingly high. The new method and coverage of presenting the figures will need to be studied very carefully and we shall no doubt have to return to them in debate in due course.

In the Statement the Minister claims that the new figures will be more accurate. We have all noted the Rayner Report, but will not the new method of voluntary registration at Job Centres and the transfer of the unemployment count to benefit offices have the effect of reducing the unemployment figure and the percentage, thus giving a far more favourable picture than is actually the case? A figure of over 100,000 has been mentioned by some commentators. Can the noble Earl say what is the current percentage figure on the old basis as compared with the new basis? That will give the House some guidance as to what the new method will produce.

In his Statement the Minister gives details of savings in staff and money. Can he say how many Job Centres will be closed in the country as a result of this proposal? Will not these closures increase the difficulties of the unemployed who wish to register voluntarily? I understand that the date of publication of unemployment figures is to be nine days later than it was under the old dispensation. Can the noble Earl explain why this is and what advantages will flow from it?

Lord Rochester

My Lords, from these Benches I should like to join in thanking the noble Earl for having repeated this Statement. We realised, of course, that there would be changes in the way in which unemployment statistics were compiled following the Government's earlier acceptance of the recommendation of Sir Derek Rayner that registration at Job Centres should become voluntary, with a consequent saving both of money and of staff. Are the Government satisfied that the greatly reduced staff in Job Centres will be sufficient to give the increasing number of long-term unemployed who may seek their guidance adequate counselling? We are, of course, glad that, to enable a fair comparison to be made of past and future unemployment, figures are today being published on the new basis covering the past year.

The Statement refers to school-leavers. I think it is generally agreed that along with the long-term unemployed their plight merits the closest attention. May we be assured that under the new method of compiling statistics it will be immediately apparent how many of them are taking part in initiatives designed to help them, such as the youth training scheme and the community programme? Finally, we of course welcome the Government's explicit acknowledgement at the end of the Statement that the new figures make the problem of unemployment no less serious than it undoubtedly is today.

4.41 p.m.

The Earl of Cowrie

My Lords, I am grateful for the response of the two noble Lords. May I start by saying to the noble Lord the Leader of the Opposition that. no, we did not introduce voluntary registration precisely to bring the figures down. I think I could possibly emphasise that with some authority because I was the sponsoring Minister when this decision was taken, and as a spokesman from those Benches in opposition I also urged upon the then Government, of which the noble Lord was a distinguished member, that we should alter our ways of looking at unemployment statistics.

The Rayner scrutiny recommended making registration voluntary, as I have already explained, on the grounds that the existing procedure was wasteful of time and ineffective, and that voluntary registration would improve the efficiency of the employment service as well as achieving staff savings. We are not talking about very significant differences in figures. It is within one percentile point. To answer the noble Lord's question, the old figure would give 13.8 per cent. and the new 13.1 per cent. I have no information that there are closures of Job Centres at present. Job Centres are to some degree market orientated, and obviously therefore are affected, but not by changes in statistical measurements.

May I say to the noble Lord, Lord Rochester, that I was glad that he emphasised, as the debate the other day emphasised and as the Select Committee of your Lordships' House on unemployment emphasised, that the very severe problem remains most severe in respect of the long-term unemployed and the school-leavers. When we are considering issues of unemployment those figures are, in my view, the ones on which we ought to concentrate. They are much too high. They give considerable anxiety, but they are not of course in the 3 million mark. The latter figure is subject to the ebbs and flows of people's movements on and off registration, and it is the latter figure, the less critical one in my view, that will be affected by these changes.

Lord Kaldor

My Lords, may I ask the noble Earl for clarification of his original remarks on one point? If I understood him rightly he said that, while the new figures are compiled on a different basis and generally give somewhat lower figures absolutely than the old figures, their movements will be very much the same. In other words, the new figures will reflect an increased or decreased incidence in unemployment in much the same way as the old figures. Is this consistent with the statement that the basis of the new figures is the receipt of unemployment benefit? Is it not true that unemployment benefit runs out after a time, so that with the passage of time there will be more and more unemployed who will not be caught, so to speak, or registered by the new figures, simply because they are no longer able to claim benefit? That would introduce a systematic factor that tends to enlarge the differences between the new figures and the old figures.

The Earl of Gowrie

My Lords, this is not the case because the unemployment benefit offices act as the agents for the Department of Health and Social Security in respect of supplementary benefit. Therefore, the effects that the noble Lord has been anxious about do not obtain.

Lord Kilmarnock

My Lords, we on this Bench would also like to thank the noble Earl for repeating that Statement. I should like to ask the noble Earl two or three questions. Have the Government taken on board the recommendation of the committee of your Lordships' House that registration should be voluntary only for the first month and thereafter become compulsory? Have they given any consideration to our paragraphs 14.30 and 14.45, in which we recommended that voluntary registration should not lead to staff cuts, for some of the reasons advanced by the noble Lord, Lord Rochester?

Finally, I have noticed in paragraph 32 of the Government's response to the unemployment committee that they agreed that the Manpower Services Commission should retain 250 more staff than would otherwise have been allocated, to assist the long-term unemployed. I should like to ask how that figure of 250 relates to the planned cuts of 1,350? In other words, had it not been for this 250 would the staff cut have been 1,600, or in fact is the effective staff cut planned to be 1,100?

The Earl of Gowrie

My Lords, I cannot answer the noble Lord's last question off the cuff, but my suspicion, based on my recollection of my time as an employment Minister, is that the addition would be within the saving, but I will check and find out and notify the noble Lord. We have indeed attended to the Select Committee's report, but in this instance the Rayner scrutiny was designed to cut out wasteful procedures and save money and make life more efficient. It also seemed to us wrong that claimants should be compelled to visit Job Centres, which in many parts of the country was often a wasteful proceeding, and therefore the point that the noble Lord is raising is not, with great respect to him, relevant to this particular procedure, though of course procedures to try to improve the match of jobs to job seekers are very important in another context. In that other context I am glad to say that vacancies in Job Centres are substantially up on last year, and though of course the demand for jobs greatly and sadly exceeds supply the trend is broadly in a better direction.

Baroness Seear

My Lords, may I ask the noble Earl what provision, if any, is being made to reinforce the staffs in the benefit offices since they will now be the only people who automatically have contact with the unemployed, as the unemployed are no longer required to register at the Job Centres? Seeing someone to pay benefit is a different matter from giving them the encouragement, counselling, whatever you like to call it, which will urge them and help them to get back into employment, which was what was given at the Job Centres at their best, and what on the Select Committee we were hoping would continue to be given to people who would under our recommendation have gone to Job Centres after a month. Merely calling to get benefit, unless it is accompanied by some action to help people into jobs, is not going to be very productive.

The Earl of Gowrie

My Lords, I do not see that the noble Baroness need have any difficulties in this respect. As she knows, the overwhelming number of those people who are unemployed wish for employment; Job Centres are prominent in pretty well every town in the land and are perfectly available to people who want to go to them. We simply are not convinced that they should be compelled to do so at great cost to the public purse and, if I may say so, with a certain amount of disrespect to them. It seems to me foolish to compel people to go to a Job Centre when they are perfectly able to do so—indeed, the Job Centres are made considerable use of, as the noble Baroness knows.

Lord Balogh

My Lords, does the Minister realise that we have examples and therefore do not have to rely on theories? When unemployment benefit was withdrawn from married women, there was a distinct fall in the figures, and I am sure the Government knew very well that that would be the case. It is also reinforced by the situation in America. I think the whole thing can only be characterised as cooking the books.

The Earl of Gowrie

The noble Lord has something of a reputation for making statements in this House which are both offensive and inaccurate, my Lords, and I am afraid this is one of them.