Unemployment Forecast and Proposed Remedies (Hansard, 21 June 1984)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

Viscount Long
My Lords, the Government are mindful of the unemployment projections and policy prescriptions of all major forecasting bodies, but attach no special importance to those of any single body.

§ Lord Hatch of Lusby
My Lords, is the noble Viscount aware that according to the National Institute the expected annual output growth of this country for this year and next year is 2 per cent., and that this is not sufficient to reduce unemployment? Is he further aware that the National Institute has stated that only an expansionist policy can give the private sector the means to provide sufficient jobs to reduce unemployment? If he does not agree with these findings, what is the Government's policy towards reducing unemployment?

Viscount Long
My Lords, I am most grateful to the noble Lord, Lord Hatch, for reading all these articles, because I notice that gradually the writers of them are believing more and more that the Government are on the right course to try to help ease unemployment. The recent budget maintained a consistent approach of a medium-term financial strategy and a resolute anti-inflation policy, which is the only way to secure sustainable growth in output and in jobs. It abolished the Labour tax on jobs and the national insurance surcharge. It reformed corporation tax to the benefit of industry and investment in a way which removed the existing arbitrary discrimination against labour. It also raised tax thresholds 7 per cent. in real terms, which I am sure the noble Lord will agree will improve incentives and ease the unemployment and poverty trap.

Lord Oram
My Lords, the noble Viscount the Minister says that the Government pay no special attention to a particular forecast, but do they not at least take special notice of today's report of the OECD (of which they are a member) which casts very serious doubt on forecasts of economic upturn? Is it not about time that the Government realised that their economic policies are failing to produce the upturn which we are so often promised?

Viscount Long
My Lords, I did not actually see that report, but I heard about it. The most important thing is that we must keep the rate of inflation under control. In so doing, we must invest in industry, and in the end—and it is a long-term policy—the figure of unemployment will gradually, we hope, come down.

§ Lord Dean of Beswick
My Lords, in view of the answer he has just given to my noble friend, will the noble Viscount the Minister make himself aware of the fact that the OECD report which has been issued in the last few hours casts grave doubts on the question of a sustained economic recovery? There is quite a serious note of pessimism in it. Bearing this in mind, can the noble Viscount the Minister tell us when the ever-increasing pool of long-term unemployed in this country can look to better future job prospects, so that they can leave the dole queues?

Viscount Long
My Lords, of course the report to which the noble Lord refers relates to a number of countries in addition to the United Kingdom. If we are going to try to control the unemployment position, we really must contain the situation. I congratulate the Government, though I am a member of it, on doing so. As it is, all we have to do now is to make sure that investment in industry and the economy is right, and then the unemployment level will not only be contained, but will eventually come down.

§ Lord Dean of Beswick
My Lords, is the noble Viscount the Minister seriously saying, when there is a considerable number of long-term unemployed in each month's figures, that can be termed as "containing the situation"? Surely, that is a misuse of the English language?

Viscount Long
My Lords, a few years ago we inherited quite a number of problems from the party opposite. The idea then was that we were going to have seven, eight, 10 or 11 million unemployed. In fact, I congratulate the Government on three million at this stage.

Lord Bruce of Donington
My Lords, reverting to the report of the National Institute which is referred to in the Question, and notwithstanding the reply he has given, does not the noble Viscount the Minister think that it is wise occasionally to give special attention to these expert forecasts and analyses which are prepared? In this case should not more particular attention be given, since the forecasts by the National Institute have almost invariably been far better than the Government's forecasts and those of any spokesmen in this House? Is the noble Viscount aware that in the latest report an increase in the rate of inflation is predicted to take place in 1985, that unemployment (excluding school-leavers) is scheduled to go up further, and that personal disposable incomes are signalled as probably coming down? Does not the noble Viscount the Minister think it is really high time that the Government should abandon the obsolete policies of Professor Hayek and have a complete rethink of their whole economic and political policies?

Viscount Long
No, my Lords,

§ Lord Hatch of Lusby
My Lords, if the noble Viscount is serious in claiming that he believes in the Government's policies, and that those policies will bring down unemployment—which is the story we have been hearing for at least three years—why is it that unemployment continues to rise?

Viscount Long
My Lords, I am not a genie. I gather that the noble Lord, Lord Hatch, is going off on holiday to Africa, and if he cares to leave his address with me, I shall write to him and let him know.