HL Deb 18 April 1991 vol 527 cc1550-4

3.4 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

What was the total number of people unemployed on the most recent dale for which a figure is available.

The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)

My Lords, in March 1991 seasonally adjusted unemployment in the United Kingdom was 2,092,700.

Lord Dormand of Easington

My Lords, is the Minister aware that the figure released today is a monument to the incompetence of the Government in managing the economy? Does he deny that there are unique features in the figure in that all parts of the country and all types of jobs are affected? We have had increases in unemployment for 13 consecutive months. Those increases are a record since figures were first published. The Minister will state that these factors are necessary in order to reduce inflation. Will he say whether the Government will allow unemployment to reach 2½ million?

Viscount Ullswater

My Lords, of course I recognise that all forms of unemployment are regrettable. No one should underestimate the difficulties that unemployment causes for individuals and their families. However, the Government are taking the necessary means to combat inflation and thereby to create the climate for renewed economic growth. We are already seeing the success of this strategy, evidenced by the recent falls in both the retail prices index and interest rates. This is the right path to job creation and sustainable falls in unemployment. The Government have also made available a wide-ranging set of measures, including training opportunities, to help unemployed people get back into work as soon as possible.

Lord Mason of Barnsley

My Lords, is the Minister aware that unemployment in the United Kingdom is rising faster than in any other country in the European Community? Our manufacturing base has been dangerously eroded; manufacturing output is down and still falling. We have balance of payments deficits unparalleled in our history. Does the noble Viscount believe that that picture augurs well for the future of our economy?

Viscount Ullswater

My Lords, manufacturing employment has been falling since 1966, but falls in recent years are exaggerated by reclassification of jobs in services. However, as perhaps the noble Lord will wish to know, in the United Kingdom productivity grew by an average of 4.7 per cent. a year in the period 1980 to 1990, which was the fastest of all major industrialised countries.

Lord Mellish

My Lords, we recognise the Government's intention to deal with inflation, which is the curse of mankind. However, is the noble Viscount aware that the building materials producers, who are by no means unfriendly to the Government, have predicted that the only way in which they can get out of the recession they are in at the moment is if and when mortgage rates are reduced to about 10 per cent.? That includes the interest rate. What is the Minister's view about that? What are the prospects?

Viscount Ullswater

My Lords, we are seeing a faster fall in our inflation figures than most other countries in Europe. As noble Lords know, inflation has dropped from 10.9 per cent. to 8.2 per cent. and interest rates have gone down 3 per cent. during that period. That is the way to increase confidence in the industry. Inflation is due to fall again and on the back of that interest rates will also be reduced.

Baroness Turner of Camden

My Lords, is the Minister aware that projections by organisations such as the CBI are for a great deal more than 2 million unemployed at the end of this year? The figure of 3 million has been mentioned in some quarters. Does he agree that crisis measures other than those he has just enunciated may be more apposite?

Viscount Ullswater

My Lords, I am not in the business of predicting the unemployment figure at the end of the year. However, the Government are providing the Employment Service with an additional £55 million to help unemployed people. From July, every person who reaches 13 weeks of unemployment will receive the offer of an interview and a chance to review their plans and assess further options for returning to work. With these additional resources, we shall be able to offer 650,000 opportunities to help unemployed people get back to work. This represents the most comprehensive range of help and advice ever available to unemployed people and will enable us to meet the guarantee in our newly extended aim.

Lord Elton

My Lords, is my noble friend aware that many of us feel that this is an exceedingly important subject, to which my noble friend is bringing useful information? We understand the desire of the Opposition to make as many points on the matter as possible. However, as this is the seventh occasion in 12 working weeks when this question has been raised, does my noble friend consider that to raise this matter again is not an appropriate use of Question Time?

Viscount Ullswater

My Lords, I agree with my noble friend. I would point out that there will be a debate on unemployment next week.

Baroness Seear

My Lords, can the Minister really claim that the Government are doing everything possible to help reduce unemployment when they have cut the money available to the training and enterprise councils by 30 per cent? Therefore people who could be in training to acquire jobs to fill the skills shortages that we all suffer from are instead unemployed. Special groups with special training needs have been devastated. Due to lack of funds, the organisation that I represent, the Apex Trust, has had to cut by two-thirds the training that it provides. Most of the people helped by the trust have criminal records and without help they are thrown back into unemployment. The Minister can well appreciate the results of such a course of action.

Viscount Ullswater

My Lords, the establishment of the TECs will be completed within a much shorter period than was envisaged originally. They will now be established in two years instead of four years. That is a great success. The Government have contracted out training to the TECs. To get value for money they are recontracting with the suppliers of training. The most important issue is that we should achieve value for money.

Lord Donoughue

My Lords, in looking for useful information, and bearing in mind the several dozen changes in the statistical methods of calculating unemployment that have taken place over the past 11 years, will the Minister tell the House what the level of unemployment is as calculated on the original basis that existed when this Government took office in 1979? I appreciate that the Minister may not have that information to hand. I hope he will write to me on this point and perhaps bring that information with him to the House on the regular occasions when this subject is raised.

Viscount Ullswater

My Lords, the noble Lord has suggested that the figures are not comparable. That is entirely untrue. In total there have been only eight significant changes affecting the unemployment count since 1979, all of which have been adjusted in the consistent seasonally adjusted series maintained by my department's statisticians. This series has been maintained to be consistent with the current coverage of the count to allow meaningful comparisons with the past to be made, and so that underlying trends can be more easily observed. The noble Lord asked me a specific question. When this Government came to power there were just over 1 million unemployed people.

Lord Swinfen

My Lords, will my noble friend tell the House how many jobs are waiting to be filled at the present time?

Viscount Ullswater

Yes, my Lords. There are over 400,000 jobs available in the market place. It is also useful to know that 275,000 unemployed people leave unemployment each month. Over 50 per cent. of unemployed people leave unemployment within three months of becoming unemployed.

Lord Cledwyn of Penrhos

My Lords, the Minister agreed with the point made by the noble Lord, Lord Elton. However, does not the Minister agree that this House would be at fault if it did not consistently draw the Government's attention to a matter of fundamental importance to the people of this country; namely, the alarmingly high increase in unemployment? Is the Minister aware that, up to the end of last February, claimant unemployment in Wales increased in 12 months by 18.1 per cent.? Is that not a disgrace? What action are the Government taking to invest in industry and in training to make some attempt to get things right?

Viscount Ullswater

My Lords, the position in Wales has been much better than that in other parts of the country. The unemployment rate there is only 1.6 per cent. above the rate it was last year. The noble Lord the Leader of the Opposition asked me whether the Opposition should not remind the Government of their obligations. I take this opportunity of reminding the House of the contents of the Labour Party's document entitled Opportunity Britain, which was published this month. If the Labour Party ever came to power, it is estimated that, as a result of the minimum wages that that party advocates, at least 1 million jobs would be lost very quickly.

Lord Boardman

My Lords, is not the most effective way of containing unemployment the moderation of wage demands and wage settlements?

Viscount Ullswater

My Lords, that is entirely correct. Manufacturing industry is paying a high price for above average wage increases. Wages are currently rising by some 11.4 per cent. The wages offered by our major competitors such as the USA and Japan are virtually static.

Lord Tordoff

My Lords, following that reply, can we hope that the noble friends of the Minister and their colleagues will set an example in terms of wage moderation?

Viscount Ullswater

My Lords, we all need to pay attention to wage moderation.

Lord Stoddart of Swindon

My Lords, is the Minister aware that there is a qualitative difference in the unemployment figures now as compared with 1981, in that the figures show that the whole of the country is now suffering from unemployment? Will the Minister confirm that 50,000 of the unemployed included in the figures published today on the increase in unemployment are to be found in the South of England? That position is now spreading North. Does the Minister agree that the cuts in interest rates have been too small and have occurred too late? Does the Minister further agree that we need much greater cuts, and soon, if the unemployment problem is to be dealt with and is not to reach a figure of 3 million by the end of 1992?

Viscount Ullswater

My Lords, it is correct to say that unemployment in the South East is rising and has risen at a higher rate than in other parts of the country. However, it still remains true that the average for the South East is below the national average. If there is an increase in an unemployment count that has traditionally been low, obviously that will increase the percentage. I do not agree with the noble Lord that we should cut interest rates more quickly than is advisable and thereby put the strength of the pound at risk in the ERM.

Lord Dormand of Easington

My Lords, will the Minister explain to his noble friend Lord Elton that the reason why people such as myself keep raising the matter of unemployment is because we are in a unique position as regards unemployment? The current rates of unemployment have never persisted for 13 consecutive months, as three or four speakers on this side of the House have said. That is the problem and we want to know what the Government are going to do about it.

Viscount Ullswater

My Lords, the position is not unique. UK unemployment rates are still lower than the EC average. In recent months there have been rises in unemployment across the industrialised world, in the States, Italy, Canada and Australia.