HL Deb 20 June 1991 vol 530 cc262-4

3.11 p.m.

Viscount Hanworth asked Her Majesty's Government:

Whether the cost to the Exchequer of supporting unemployed people is at least 60 per cent. of the cost of employing them and, if so, whether they regard this as an efficient use of public funds.

The Lord Privy Seal (Lord Waddington)

My Lords, the latest estimate of gross benefit payments to unemployed people in 1991–92 is £5,590 million. This cannot be compared with the costs of employment. These depend on the wage paid, and non-wage labour costs, such as national insurance contributions, which vary for each individual.

The Government are firmly committed to helping unemployed people get back to work. My right honourable friend the Secretary of State for Employment announced yesterday an increase in the number of opportunities available. But the Government's principal task is to set the monetary and fiscal framework to defeat inflation, creating the conditions for a return to sustainable growth.

Viscount Hanworth

My Lords, I thank the Minister for that reply. Does he appreciate that, with unemployment rising, it is in the national interest if one can usefully give people further training? Does he agree that some of the money might be used for that purpose?

Lord Waddington

My Lords, certainly the needs of individuals differ. I do not disagree with the noble Viscount for one moment when he says that many of those who are out of work can benefit from training. In other cases undoubtedly people can benefit from advice and from work experience—the opportunity to continue working rather than receive training.

Baroness Turner of Camden

My Lords, is the Minister not aware that the political cost of attempting to use unemployment as a weapon against inflation can be very great? Is he not aware also that much of the current unemployment is among highly skilled and professional people? Can he say what incentive there is for such people to undertake training if there are no jobs for them and they are skilled and trained already?

Lord Waddington

My Lords, allowing inflation to rise would certainly be the unkindest act of all because in the long run far more jobs would be destroyed.

Lord Barnett

My Lords, the original Question asked whether the Government regard the cost involved as an efficient use of public funds. May we have an answer?

Lord Waddington

My Lords, I thought that I had answered. It is impossible to compare the cost of unemployment benefit with how much would be saved by a person being back at work. One cannot possibly know the level of wage that would be paid to the individuals concerned.

Baroness Phillips

My Lords, is the Minister aware that while teachers are being made redundant by various local authorities the Government are proposing to spend a vast sum of money with a certain well-known advertising agency to recruit them? Is that a very wise way to spend money?

Lord Waddington

My Lords, I cannot comment on policies adopted by individual local education authorities. I am not qualified to say what is the position within the boundaries of individual local education authorities.

Lord Rochester

My Lords, will the noble Lord accept that I welcome the Government's decision, so far as it goes and belated though it is, to provide emergency measures which include a temporary work scheme for the long-term unemployed?

Lord Waddington

My Lords, I am most grateful to the noble Lord. The new programme of employment action will provide work experience on local projects for a large number of people and is a very useful further step to help the unemployed.

Lord Stoddart of Swindon

My Lords, the Leader of the House referred to the resumption of stable growth. Can he say when we are to get this resumption of stable growth, bearing in mind that figures published today show that bank lending is down and the money supply also down? Does he not agree that the best way of dealing with unemployment is to reduce interest rates substantially and to do it now, so that real growth can be resumed?

Lord Waddington

My Lords, the point raised by the noble Lord goes far wide of the Question that is before the House. With the greatest respect, I do not think that the noble Lord is entitled to suggest that somehow the Government's achievements in the way of growth can be compared with the lack of achievement of the Opposition. There has been considerable growth since 1979, reflected in very much higher living standards.

Lord Hailsham of Saint Marylebone

My Lords, did I mis-hear my noble friend? Did he not say "sustainable" growth and not "stable" growth?

Lord Waddington

My Lords, I can assure my noble and learned friend that in my first Answer I referred to sustainable growth.

Lord Molloy

My Lords, can the Leader of the House confirm that a government spokesman has already said that a degree of unemployment—not for himself of course—is very worthwhile in order to bring down inflation? Is he not aware that unemployment creates very bitter problems for skilled artisans and general working people of exceptional knowledge whose abilities can serve this country? It is quite wrong for the Government deliberately to create a degree of unemployment to bring down inflation. When will that policy cease?

Lord Waddington

My Lords, unemployment is a terrible misfortune. No one would suggest otherwise. However, I am right in saying—I have said it already this afternoon—that if one were to take no steps at all to control inflation, in the longer run there would be far greater hardship because unemployment would be far higher.