Unemployment (Hansard, 14 January 1991)

§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, the key contribution of government is to create a climate in which enterprise can flourish. We expect to see this year a reduction in inflation, which is our first priority, and a resumption of economic growth. The wide-ranging services offered by my department are, of course, available to help unemployed people to re-enter the labour market.

§ Lord Molloy
My Lords, I thank the noble Viscount for that reply. Is he aware however that what he has just said is completely the opposite of the view of the CBI, the TUC and prominent bankers and economists in the City? They take the view that by the end of the year there will be 2 million unemployed and that the root cause is the lack of application of the Government's policy, which they feel needs to be changed.

§ Viscount Ullswater
My Lords, my right honourable friend the Secretary of State said in another place that he is prepared to listen to any representations made to him. However, any serious attempt to reduce inflation must mean using a tight monetary and fiscal policy, which the Government are doing. That will involve costs in terms of a period of slower growth of output and employment and possibly rising unemployment. We should be deluding ourselves if we 985 believed there to be a costless way of controlling inflation. We can minimise the pain if everybody acts sensibly in pay negotiations.

§ Lord Boyd-Carpenter
My Lords, notwithstanding my noble friend's admirable reply, is it not quite ridiculous to deal with this immense subject by way of a Starred Question?

§ Viscount Ullswater
My Lords, it is my duty to do my best to answer the Question on the Order Paper.

§ Lord Stoddart of Swindon
My Lords, is not the right way to reduce unemployment and get the economy going once again to reduce interest rates and to do so immediately? Is it not also a fact that the Government are now constrained from doing just that by their entry into the ERM?

§ Viscount Ullswater
My Lords, membership of the ERM will reinforce the anti-inflationary policy, which will in turn have a favourable effect on the economy, including employment in the long run. However, it makes it even more important that labour costs are kept under control. If firms allow themselves to become uncompetitive by agreeing to large pay rises, they will not be accommodated, as they have been heretofore, in depreciating currency.

§ Baroness Turner of Camden
My Lords, does the Minister not agree that rising unemployment is a product of the general economic situation for which the Government are responsible and that protective regulations in the employment field have very little to do with that unemployment?

§ Viscount Ullswater
My Lords, my right honourable friend the Chancellor admitted that there will be a slowdown in the economy. As I said, one of the effects may be an increase in unemployment in the short term. I do not believe that what has been done in the employment Acts has the same effect.

§ Lord Dormand of Essington
My Lords, if it is the function of government, as the Minister said, to provide the right climate in which enterprise can flourish, why have the Government failed to achieve that after 12 years in power?

§ Viscount Ullswater
My Lords, I cannot agree with the noble Lord. The Government have done extremely well in providing such a climate. I admit that at present inflation is damaging the economy and must be squeezed out.

§ Lord Dean of Beswick
My Lords, bearing in mind that the latest figures show a substantial increase in unemployment in Huntingdon, does the Minister believe that the new Prime Minister's policies are successful?

§ Viscount Ullswater
My Lords, I am not aware of the unemployment figures in Huntingdon in particular, All I can say is that we are looking forward to an increase in economic activity during the current year end therefore an increase in the level of employment.

§ Lord Williams of Elvel
My Lords, is the noble Viscount really looking for increased economic activity in the current year or does he expect growth to be resumed next year?

§ Viscount Ullswater
My Lords, the Autumn Statement forecasts suggested that the latter half of 1990 would be tough. However, output is expected to begin to grow again throughout 1991 and the prospects for the labour market will improve.

§ Lord Rochester
My Lords, if the recession deepens and unemployment increases, will the Government be prepared to give further consideration to the effect that their decision, announced in the Autumn Statement, to reduce expenditure on training may have on the economy in both the short and long term?

§ Viscount Ullswater
My Lords, employment training is not always the necessary requirement to help the long-term unemployed. Many unemployed have skills, some of them basic and some greater than that. But they have lost their motivation to return to the employment market. For that we need a balanced programme. That is why over 100,000 places at job clubs have been provided for the future.

§ Lord Hailsham of Saint Marylebone
My Lords, does not the round of supplementary questions arising from the original Question of the noble Lord, Lord Molloy, admirably illustrate the wisdom of the observation of my noble friend Lord Boyd-Carpenter that these matters are of such importance that they are more suitable for general debate than Starred Questions?

§ Viscount Ullswater
My Lords, yes, I must agree with my noble and learned friend. However, it is my task to answer as best I can the questions put to me.

§ Lord Williams of Elvel
My Lords, will the noble Viscount accept that if the Government tabled a Motion for debate on this matter, we should be only too pleased to debate it?

§ Lord Molloy
My Lords, is the noble Viscount aware that we should welcome a debate? However, are the Government and the party opposite saying that they begrudge the unemployed a Starred Question in this Chamber? Are they not aware also that the CBI, the TUC and prominent bankers and economists in the City would welcome the opportunity to be brought together under the auspices of the Government to see what contribution they could make towards avoidance of the recession for which we are heading?

§ Viscount Ullswater
My Lords, I am rather disappointed by the attitude taken by the noble Lord. On this occasion and on previous occasions I have tried to demonstrate that the Government take very seriously the plight of the unemployed and that they are actively working to try to reduce their number.