Unemployment Benefit (Hansard, 5 March 1987)

§ Lord Dean of Beswick
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they contemplate any change in the level of unemployment benefit.

§ The Secretary of State for Employment (Lord Young of Graffham)
My Lords, unemployment benefit will be increased by 2.1 per cent. in April this year in line with other social security benefits. The increase reflects the rise in inflation between January and September 1986, the relevant period for this uprating. Unemployment benefit is statutorily increased each year in line with rises in prices and there are no plans to alter this arrangement in future.

§ Lord Dean of Beswick
My Lords, I am grateful to the Secretary of State for that Answer. Is he aware that three or four weeks ago one of the more responsible newspapers carried a story to the effect that he, in his position of Secretary of State, was trying to persuade the Cabinet to reduce unemployment benefits generally in order to try to force people back to work in low paid jobs? Can I take it from him that the story is a total fabrication?

§ Lord Young of Graffham
My Lords, the description of that newspaper as "responsible" comes from the noble Lord, but I am happy to say that in this instance there is not the smallest shred of evidence to support it.

§ Lord Gisborough
My Lords, when my noble friend considers unemployment benefit, will he be prepared to take into account and perhaps comment on the press report that in Middlesbrough, where there is something between 20 per cent. and 30 per cent. unemployment, jobs are being offered at £150 a week by the council in building work but nobody can be found to take them?

§ Lord Young of Graffham
My Lords, I have heard stories of this nature from around the country, even in areas of high unemployment. The difficulty does not reside in the level of unemployment benefit; the difficulty is that people end up paying too much tax. At present a married man with two children who wishes to take home £25 a week more than he receives from benefits has to find a job at over £160 a week, which is not easy to do in most parts of our country.

§ Lord Rochester
My Lords, will the Secretary of State take this opportunity to confirm that in his view the great majority of people who are unemployed, far from pricing themselves out of jobs, are only too anxious to find suitable employment?

§ Lord Young of Graffham
My Lords, I am totally unable to say that, since I personally do not know most people who are unemployed. I know that in areas of high unemployment there are vacancies which seem difficult to fill even with unskilled labour. I can say no more than that the most active job market in the country is London and yet London has as many long-term unemployed as the whole of the North-East.

§ Lord Dean of Beswick
My Lords, I am extremely grateful and unreservedly accept what the Secretary of State said about the newspaper report. However, is there not some contradiction in the answer that he has just given in respect of the job at £160? Has not the Minister in another place recently been urging people to accept lower wages and smaller increases in wages? When shall we reach a position in which the difference between unemployment benefit and wages (which seems to be a disincentive now) is attractive enough to get people back into jobs?

§ Lord Young of Graffham
My Lords, my right honourable friend in another place, the Paymaster General, is quite properly concerned about the level of unemployment in the North-East and North-West. Quite properly he believes that if wages in those areas could reflect living costs, it may well be that unemployment would fall. But it is no more than that. There is no desire on the part of this Government to see lower wages. There is a great desire by this Government to see lower unemployment, higher employment and a rise in wages throughout the land.