Unemployment Figures (Hansard, 16 May 1991)

§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, in April 1991 seasonally adjusted unemployment in the United Kingdom was 2,175,100.

§ Lord Dormand of Easington
My Lords, as today's total is the 13th consecutive monthly increase and again affects all regions and all types of employment, how long do the Government consider that their present policies will take to reduce unemployment to any significant extent? Will the Government spare us any further inventions of economic terms, such as the recent one, "lagging indicators", purporting to show that unemployment is not as bad as it seems? Finally, did the. Minister read last week the heart-rending account of Mrs. Thatcher, who said that she was shattered by losing her job? Will the Government now shed at least one tear for those 2,175,100 people whose lives have been shattered for the same reason?

§ Viscount Ullswater
My Lords, no one should underestimate the difficulties which unemployment can cause for the individuals concerned and their families. But pay will have a crucial effect on the extent and duration of the increase in unemployment. Excessive wage settlements will damage competitiveness aid threaten jobs. I should point out that in recent months there have been rises in unemployment across the industrialised world: in the United States, France, Canada and Australia.

§ Lord Dean of Beswick
My Lords, is the Minister aware of the study undertaken by my trade union, AEU, which analysed the 90,000 jobs lost this year in the manufacturing sector? Although originally the Government were able to blame the trade unions, having now rejigged the law so that the unions are almost powerless to protect their members, what further excuse can they find other than that they have made a total mess of the economy?

§ Viscount Ullswater
My Lords, the loss of jobs in the manufacturing industry has been a long established trend. Employment peaked as far back as 1966. The decline is partly the result of a necessary shakeout in the early 1980s when manufacturing was overmanned and inefficient. Some decline is evident in most other industrialised countries. It results from structural change in the modern economy. The fall in 1740 the United Kingdom is exaggerated by a reclassification of some of the jobs to the services sector. It is interesting to note that manufacturing output again rose last month.

§ Lord Grimond
My Lords, governments used to have full employment as an aim of policy. I understand that that has been given up, which is not surprising. But have the Government now any target for the rate of unemployment at which they expect to be able to run the economy?

§ Viscount Ullswater
My Lords, the Government are keen to squeeze inflation out of the economy and that is the policy that they are pursuing. When inflation drops, as it will, that will create the conditions in which employment can be increased and businesses will again thrive.

§ Lord Stallard
My Lords, how does the noble Viscount equate the 90,000 manufacturing jobs lost this year with the 1980 shake out 10 years ago? There is no direct connection at all. We are speaking of 90,000 manufacturing jobs that have disappeared this year alone, for which there must be an explanation that we have not yet received. Will the Minister say something about the massive increases in remuneration that directors have given themselves prior to imposing a freeze on the workforce; for example, at Ford's and other places? The directors gave themselves huge increases out of all proportion to their worth in most cases and at the expense of people on the shop floor. Does he have anything to say about that?

§ Viscount Ullswater
My Lords, I am afraid that unit wage costs have a lot to do with the number of job losses in the manufacturing industry. For example, in the United Kingdom in the past three months unit wage costs have increased by 11 per cent. whereas those of our competitors in the United States have increased by 1 per cent. In Japan they are dropping by 1 per cent. That is an indication of how we are making ourselves less competitive, and that is a danger.
As for directors' pay, certainly some of the figures announced recently relate to production bonuses from a previous year. Equally, what I said about increases is as true for the boardroom as it is for other parts of industry.

§ Lord Jenkins of Hillhead
My Lords, can the noble Viscount tell the House why and how the economic miracle of the past 11½ years has succeeded in producing such spectacular figures of relative uncompetitiveness which he has just produced to the House as though it were a great mark of achievement of the Government?

§ Viscount Ullswater
My Lords, during the past 10 years we have shown record outputs and record growth, unlike during the two previous decades. Yes, there is a decline in the economy at the moment but the economy is much stronger than it was in 1980.

§ Baroness Carnegy of Lour
My Lords, have the Government made any calculation of what the Labour Party's proposed policy of a minimum wage would mean in terms of loss of jobs in this country?

§ Viscount Ullswater
My Lords, the Labour Party has said that it will introduce a minimum wage set at half the male median earnings. Officials in my department have estimated that it could cost around three-quarters of a million jobs if the wage differentials were restored by only 50 per cent.

§ Baroness Turner of Camden
My Lords, does the Minister agree that the latest figures available on unemployment do not include further redundancies threatened in Rolls-Royce and British Aerospace, which will add to the problems facing manufacturing industry? If he does not feel inclined to listen to the advice from these Benches, does he not have anything to say to the CBI, which has made recommendations to the Government about support for manufacturing industry where unemployment is now such a scourge?

§ Viscount Ullswater
My Lords, we face all talk about redundancies with some concern. However, according to the manufacturers themselves, 83 per cent. of the respondents to a 3i's survey thought that UK manufacturers were in better shape now to cope with recession than in the early 1980s.

§ Lord Molloy
My Lords, the question put to the noble Viscount by the noble Baroness, Lady Carnegy, suggested a hypothetical calculation if there were to be a Labour Government; but the appalling figures that we are now discussing were created by this Conservative Government. Is the Minister aware that the CBI, the Institute of Directors and the TUC do not see eye to eye with the Government? Does he agree that it would perhaps be sensible for the Government to have joint meetings with those three organisations?

§ Viscount Ullswater
No, my Lords, it would not and they do not intend to do so. The Government intend to make certain that the economic policy which they pursue is followed. I fully expect that the figures to come out over the next few months will indicate how inflation will be dropping. On the back of that, interest rates will come down.

§ Lord Donoughue
My Lords, will the Minister give the House the figure for present unemployment if calculated on exactly the same basis as in May 1979 when the Government took office, excluding all the statistical adjustments made since then?

§ Viscount Ullswater
My Lords, I cannot give the noble Lord an answer, as he well knows because he asked the same question in a debate on unemployment. However, the OECD figures indicate that there is a very small statistical difference between figures in 1979 and 1991.

§ Lord Donoughue
My Lords, is the Minister aware that specialist economists—such as those in the Unemployment Unit—state that the number can be calculated? It adds roughly half a million to the present number.

§ Viscount Ullswater
My Lords, I believe that figure is pure speculation and I do not accept it.

§ Lord Jay
My Lords, will the Minister inform the House whether the unit's directorates' costs are rising or falling?

§ Viscount Ullswater
My Lords, that is another question.

§ Lord Chalfont
My Lords, would the Minister care to draw attention to one aspect which seems to be ignored? Many thousands of the jobs presently being lost in manufacturing are in the defence industry? Does he agree that that is the dark, downside of the peace dividend; a dividend for which so many critics of the Government have been calling for so long?

§ Viscount Ullswater
My Lords, the noble Lord makes an interesting point. For those people losing their jobs, the threat of unemployment remains.

§ Lord Howie of Troon
My Lords, will the Minister tell the House how many of these dismal figures relate to the construction industry and when, if ever, he expects matters to improve?

§ Viscount Ullswater
My Lords, I have answered that question by saying that the Government intend to get the economy right. They are working towards that. It is coming right and the construction industry will improve once those figures are shown to be true.

§ Lord Callaghan of Cardiff
My Lords, will the Minister kindly give the House the unemployment figure for 1979 which compares with the 2,175,000 before the economic miracle began?

§ Viscount Ullswater
My Lords, the figure for unemployment in 1979 was 1,088,000.