Unemployment (Hansard, 22 October 1985)

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

§ The Minister of State for Defence Support (Lord Trefgarne)
My Lords, the figures published for September were not as discouraging as might at first sight appear. There was a reduction of 3,000 in the seasonally adjusted level of unemployment to 3,180,000. Furthermore, the rate of increase in unemployment has moderated. Over the past six months unemployment has risen by an average of 5,000 per month, compared with 10,000 per month in the previous six-month period.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that reply and obviously welcome the slight improvement to which he referred. But is he aware that the general figures show that in five of the 10 regions of the United Kingdom, excluding Northern Ireland which has the highest ratio of long-term unemployed in the United Kingdom, the figure for long-term unemployment has now reached more than 40 per cent.? In some of them it is now approaching the dangerous level of 50 per cent. Are the Minister and the Government really aware of the increasing despair and depression that is felt in the five areas to which I have referred? Does the Minister not agree that now is the time for urgent and drastic action in order to arrest the decline in employment? The palliatives at present being applied are nowhere near sufficient.

§ Lord Trefgarne
My Lords, I have to agree that the total number of unemployed people is far too high. The policies we are adopting are aimed at reducing that figure. It is true that a number of the unemployed 957 are so-called long-term unemployed; that is to say, they have been unemployed for 12 months or longer. The noble Lord will be aware of the new schemes we are introducing in an effort to make an indentation on that particular problem.

§ The Earl of Lauderdale
My Lords, in regard to measures to reduce unemployment, does my noble friend the Minister not agree that the Government are to be congratulated on resisting pressure for sanctions against southern Africa, which would increase unemployment here as well as in South Africa?

§ Lord Trefgarne
My Lords, I do not want to get dragged into a discussion about South Africa. Certainly. it is true to say that any constraints on our trading arrangements with countries overseas is likely to make the unemployment situation worse rather than better.

§ Lord Grimond
My Lords, may I ask the Government to consider two simple steps which would help in reducing unemployment? The first is to reduce the cost of employing people. The second is to redress the balance of the advantage of installing capital plant and so forth as against employment. At the moment there is a huge advantage in the subsidies for capital expenditure whereas the cost of taking on new workers is very great.

§ Lord Trefgarne
My Lords, it is the case that major new capital plant does not always have the overall effect of reducing unemployment in a particular area, or even in a particular factory. The truth of the matter is that, these days, new machinery tends to use fewer people rather than more to operate it. I do not think that that effect is one which the noble Lord would wish to see.

Lord Campbell of Croy
My Lords, may I ask my noble friend the Minister to reject immediately and firmly the suggestion in an article in The Times today, written by someone of a different political persuasion, which claims that in arriving at unemployment figures my noble friend the Secretary of State for Employment uses a computer which is defective and contains a certain bias?

§ Lord Trefgarne
My Lords, I, too, saw the article written by Mr. Gordon Brown, who I am told is the Labour Member of Pariament for Dumfermline East. That article was littered with inconsistencies and inaccuracies.

§ Lord McCarthy
My Lords, is it not the case that what the noble Lord the Minister has said today contradicts what he said to my noble friend at column 469 of Hansard for 15th October? He told my noble friend then that he was wrong to suggest that unemployment was increasing. Yet the Minister has told the House today that the rate of increase is moderating, which in fact means that unemployment is still increasing. Indeed, on the Minister's own figures on employment flows for August and September, unemployment is increasing at a rate of about 100,000 a year. Is it not the case that what the Minister told the House last week was quite wrong?

§ Lord Trefgarne
My Lords, the noble Lord could not have listened properly to the Answer I gave today, nor to the reply I gave the other week. What I am saying now in relation to the reduction in the increase referred to the last six-month period and not the last one-month period. For the month of September there was, as I said earlier, a reduction of 3,000 unemployed in the seasonally-adjusted level.

§ Lord Rochester
My Lords, does the Minister not agree that the proportion of unemployed people in the South-East who have been out of work for one year or more is not so high as in other areas of the country? Will that factor be borne in mind in the planned expansion of the Community Programme to which the Minister referred at an earlier stage?

§ Lord Trefgarne
My Lords, we shall certainly be targeting the programme at the areas in most need.

§ Baroness Seear
My Lords, will the noble Lord the Minister think again about the answer he gave my noble friend Lord Grimond? My noble friend was making the point that there are tax advantages attached to installing expensive capital equipment as against the penalties which are attached to employing people. We all realise that many types of capital equipment lead to a reduction in the labour force, but my noble friend was making the point that plant subsidies are a misuse of Government money if they result in unemployment.

§ Lord Trefgarne
My Lords, if the noble Baroness is referring to the cost of employment referred to by her noble friend, then that certainly is a matter that we need to look at.

§ Lord Stallard
My Lords, does the noble Lord the Minister not accept that the only conclusion being drawn by most informed opinion in respect of unemployment figures is that the Government have failed miserably to begin to deal with this massive problem? Does he not agree that it would be far better, instead of having the financial restrictions and penalties which are being imposed on local authorities, if the Government were to give back to local authorities the right to develop real jobs in the areas of genuine deprivation?

§ Lord Trefgarne
My Lords, if the noble Lord will forgive me for saying so, it seems to me that the policies of his noble and right honourable friends are of greatly increased public expenditure and the propping up of unprofitable industries in an attempt to solve the problem.

§ Lord Taylor of Blackburn
That is not true, my Lords.

§ Lord Trefgarne
My Lords, such action would merely ensure that inflation lifts off and that public expenditure gets out of control. That is not a solution to the problem.

§ Lord Cledwyn of Penrhos
My Lords, the noble Lord, Lord Young of Graffham, has been appointed to the crucial post of Secretary of State for Employment.

Noble Lords
Hear, hear!

§ Lord Cledwyn of Penrhos
My Lords, I am sure that all Members of this House wish him well. However, it is absolutely essential that the noble Lord be here to answer questions on this subject.

Noble Lords
Hear, hear!

§ Lord Cledwyn of Penrhos
My Lords, there was a Question last week on a subject of concern to the noble Lord's department, and there is again next Thursday. We realise that the Minister must be busy but his first duty is to this House. We are grateful to the noble Lord, Lord Trefgarne, for answering questions but may I ask him to confirm that the noble Lord, Lord Young of Graffham, will be in the House on the next occasion that a Question on this subject is asked?

§ Viscount Whitelaw
My Lords, I wish to apologise to the House on behalf of my noble friend Lord Young. He had an engagement which he believed he could not cancel. I myself take full responsibility for having said that on this occasion my noble friend should fulfil another engagement, because having judged the merits of the case I believed that to be the right action. His absence is totally my responsibility. I will see to it that my noble friend is here in future. On this occasion, having been consulted, I thought that I had taken the right decision. My noble friend is himself anxious to be in the House when such matters are being debated. Obviously I must take responsibility for his absence in this instance.

§ Lord Avebury
My Lords, does the Minister not agree that it was unfortunate that the Government should dismiss after two days' study the carefully thought out report from your Lordships' Select Committee on Overseas Trade which makes the point that the decline in manufacturing industry, in which unemployment has unfortunately been generated, will take a long time to restore? If British companies are not willing to invest in such industries as computer printers and motor cycles—which have disappeared from the manufacturing face of Britain—then will not the Government at least encourage foreign entrepreneurs, particularly the Japanese, to establish plants in this country so that we may employ the skills of our people in manufacturing industries instead of entirely in the service industries?

§ Lord Trefgarne
My Lords, I should not want to anticipate whatever detailed response may be given to the report to which the noble Lord has referred. However, we have a sound record of encouraging foreign businesses to come to this country and set up manufacturing enterprises. Indeed, a great many have done so in recent months and years.

§ Baroness Fisher of Rednal
My Lords, will the noble Lord the Minister confirm that the Secretary of State for Employment is in Birmingham today speaking to teachers? The local newspapers and radio stations are full of his visit. I only hope that the noble Lord will be convincing the teachers that they ought to have more money for the excellent job of work they do in schools.
960 Does the noble Lord not agree that in areas of deprivation—and the West Midlands suffers the highest percentage of unemployed—where there is a great need for new housing, it would be wise of the Government to put more money into construction programmes which will also provide new homes for people?

§ Lord Trefgarne
My Lords, I believe that the long term solution to this problem—and I suspect there are very few short term solutions—is the creation of an industrial and commercial environment which will allow our firms to grow, to flourish and to prosper; and that is the principle we shall follow.

§ Lord Somers
My Lords, does the noble Lord not agree that if unemployment is increasing (and since nobody in the country does anything but regret that fact) in all probability unemployment is not due in any way to the policy of one party or another and that, in fact, that probably has nothing to do with it?

§ Lord Trefgarne
My Lords, I think that the noble Lord is right to the extent that we are now dealing with the results of difficulties that have been arising not just over the past five or 10 years, but perhaps the past 20, 25 or even 30 years.