Unemployment: Statistics (Hansard, 23 January 1991)

§ The Earl of Strathmore and Kinghorne
My Lords, in December 1990 seasonally adjusted unemployment in the United Kingdom was 1,843,500 compared with 1,636,100 a year earlier.

§ Lord Dormand of Easington
My Lords, is not the most disturbing feature of unemployment seen in the scale of the increase in the monthly figures? Will the Minister confirm that when unemployment rose for the first time in March last year, the increase was 4,000, and that last month the increase was 80,000? When the noble Earl compares our employment position with other countries, as he undoubtedly will, he will not find that acceleration. It has been said many times from this side of the House that high interest rates are the main cause of unemployment, and that a change from that thoroughly misguided policy is essential if we are to avoid reaching 2 million or 2.5 million unemployed. When will the Government accept that?

§ The Earl of Strathmore and Kinghorne
My Lords, this month's rise should be seen in context. It remains the case that the United Kingdom has one of the lowest unemployment rates in the European Community. Furthermore, unemployment is rising in most major industrialised countries, including the United States of America, Japan, Canada, Italy and France.

§ Baroness Turner of Camden
My Lords, is the Minister aware of the prognostications for job losses in banking over the next two years? It is predicted that 300,000 jobs will be lost. When that figure is added to the loss of 78,000 jobs over the past year, we see a quite disastrous picture. Is he further aware that, according to press reports yesterday, the high interest rates at the present time are regarded as the main cause of banking redundancies?

§ The Earl of Strathmore and Kinghorne
My Lords, I must correct the noble Baroness on her figure of 300,000. I think she means 30,000.

§ Baroness Turner of Camden
No.

§ The Earl of Strathmore and Kinghorne
My Lords, these figures must be seen in context. They do not detract from the Government's considerable longer term achievements in improving the performance of the labour market. Employment is currently at a record level.

§ Lord Boyd-Carpenter
My Lords, do not these figures indicate, however, the importance that nothing should be done to increase industrial costs, either by way of trade union action or legislation?

§ The Earl of Strathmore and Kinghorne
My Lords, I can only agree with what my noble friend says.

§ Lord Molloy
My Lords, that was a terribly sad response from the Minister. Is he aware of the views of the Confederation of British Industry, banking experts and economists in the City that the rate of bankruptcies and the collapse of small businesses will increase enormously in the year ahead unless the Government change their policies? Does he not agree that this will also mean an equally massive increase in unemployment? What will the Government do about that?

§ The Earl of Strathmore and Kinghorne
My Lords, the Government are committed to a substantial reduction in inflation during 1991 as that is the key to achieving long-term economic success. In the labour market, the extent and duration of any increase in unemployment will depend crucially on pay. Excessive wage settlements will damage our competitiveness and threaten jobs.

§ Lord Young of Graffham
My Lords, does my noble friend agree that neither the Government nor the CBI as institutions actually create jobs, but inflation certainly destroys them?

§ The Earl of Strathmore and Kinghorne
My Lords, again, I can only agree with what my noble friend says.

§ Lord Barnett
My Lords, the Government are quite right in wanting to see inflation brought down substantially. Will the noble Earl tell us, as they have been pursuing a tight monetary policy, why inflation ever rose?

§ The Earl of Strathmore and Kinghorne
My Lords, the Autumn Statement forecast that the latter half of 1990 would be tough. Both the Chancellor and the Prime Minister have indicated that unemployment is likely to rise further in the next few months. However, we expect to see in 1991 both a reduction in inflation, which is the Government's top priority, and a resumption of economic growth.

§ Lord Cledwyn of Penrhos
My Lords, in view of the unquestionably grave unemployment prospects in this country over the next year or so, why are the Government cutting the unemployment training budget by £200 million over the next two years?

§ The Earl of Strathmore and Kinghorne
My Lords, let us be under no illusion. The Government are far from content with the current level of unemployment and certainly do not wish to see unemployment rise.

§ Lord Stoddart of Swindon
My Lords, have the noble Earl and the Government considered the political implications of the latest jobless figures? Does he realise that the greatest number of job losses is now taking place in the South of England—the Tory heartland—and in service industry jobs? Under those circumstances, and indeed for their own survival, will the Government not listen to pleas—and proper pleas —from all parts of the economy to reduce interest rates immediately?

§ The Earl of Strathmore and Kinghorne
My Lords, I hear what the noble Lord says. He is indeed right about the unemployment figures in the South-East. However, employment in services still currently stands at well over 16 million.

§ The Earl of Lauderdale
My Lords, does my noble Lord agree that the current high interest rate programme is intended to reverse the crazy credit boom of recent years? It is having its effect and is bringing inflation down.

§ The Earl of Strathmore and Kinghorne
My Lords, my noble friend is correct. The Government will reduce interest rates as soon as it is prudent to do so.

§ Lord Rochester
My Lords, will the noble Earl answer the question asked by the noble Lord the Leader of the Opposition as to why, as recession deepens and unemployment increases, the Government have made such substantial cuts in the training budget?

§ The Earl of Strathmore and Kinghorne
My Lords, that question is particularly wide of the Question on the Order Paper as it refers to training.

§ Lord Blease
My Lords, is there not a sad lack of committed communications between industry and the Government? What do the Government intend to do to promote co-partnership between the Government and industry at national level, and between Government and industry at regional level? An honest commitment is needed by those three partners to bring about a realistic approach to our problems.

§ The Earl of Strathmore and Kinghorne
My Lords, as my noble friend Lord Ullswater said at the Dispatch Box last week in answer to a similar question, the Government will listen to all points of view, be they from industry or any side of your Lordships' House.

§ Lord Blease
My Lords, I realise that the Government are listening, but we need a commitment. What are the Government doing to obtain that commitment?

§ The Earl of Strathmore and Kinghorne
My Lords, I do not have an answer to that point today. I shall come back to the noble Lord.

§ Lord Donoughue
My Lords, as the Minister agreed with his noble friend who said that unemployment is effectively a policy of correcting the crazy credit boom of a few years ago, and as that crazy credit boom arose 224 from the failure of the Government's policies, does he not agree that the unemployed are now paying the price of the failure of the Government's economic policy?

§ The Earl of Strathmore and Kinghorne
My Lords, the United Kingdom still has one of the lowest rates of unemployment in the European Community. In 1979 United Kingdom unemployment was broadly similar to the EC average, but now it is considerably lower. Only Germany, Luxembourg and Portugal have a lower rate.

§ Lord Dormand of Easington
My Lords, is the Minister aware that few people will disagree with what he said about the need to pay attention to wages, although it would be much more credible if the Government said something about the obscene increases given to chairmen of companies, chief executives, and so on? Is he saying—because he has not answered the real question —that high interest rates have little or nothing to do with the present unemployment figures?

§ The Earl of Strathmore and Kinghorne
My Lords, as I have said before, high interest rates are a factor. On the noble Lord's first point about directors' salaries, it is up to individual companies to sort those out themselves.