HL Deb 18 February 1997 vol 578 cc545-8

Lord Dormand of Easington asked Her Majesty's Government:

When they expect the level of unemployment to reach that of 1979.

The Minister of State, Department for Education and Employment (Lord Henley)

My Lords, the Government do not forecast future levels of unemployment. We shall continue with the policies which have seen unemployment fall by over 1 million, and almost 900,000 more people in jobs, than when recovery in the labour market began.

Lord Dormand of Easington

My Lords, is the Minister aware that the admission last week by the Minister of State for Employment in another place that the last unemployment figures were substantially inaccurate comes as no surprise to these Benches, especially as the method of calculating such figures has changed so many times since 1979? Perhaps the Minister can tell us how many times. Indeed, the electorate simply do not believe the figures which are being published by the Government. The Government always refer to what they consider to be their successes by comparing the situation with 1979—the time of the last Labour Government. Why can they not do the same with unemployment? Surely to goodness 18 years is long enough to have done something about that particular question.

Lord Henley

My Lords, first, and most important, I should point out that my right honourable friend did not say that the figures were wrong or inaccurate. He made it quite clear that the unemployment figures are always very difficult to interpret. That task is not made easier by mischievous claims by the noble Lord, and others, that such figures are fiddled. My right honourable friend also made clear that the figures had been coming down steadily for 36 months. Since the introduction of the jobseeker's allowance last October, we have seen a further steady fall month by month. My right honourable friend also pointed out that two things had happened: first, we have seen many more people come off the register and go into work; and, secondly, we have seen many people come off the register because they should never have been on it in the first place. In other words, JSA is getting rid of the people who should not have been on the register at all. For that reason, I think that the noble Lord should welcome what my right honourable friend said.

Lord Clark of Kempston

My Lords, does my noble friend the Minister agree that the economic policy of this Government has resulted in a decrease in unemployment month after month after month? Will my noble friend also agree that that compares very favourably with the position in Germany, in France, and among our other partners in the European Union? Does my noble friend agree that the competitive position of this country would be impaired if we ever joined the social chapter or agreed to a minimum wage?

Lord Henley

My Lords, my noble friend is absolutely right to draw attention to the dangers of a minimum wage and, indeed, of the social chapter. Perhaps I may add to that the dangers of the so-called "windfall tax", which would certainly cost jobs and investment and lead to an increase in unemployment should the party opposite come into power.

Lord Bruce of Donington

My Lords, is the Minister aware that the Government had no difficulty in 1979 in interpreting the figures when they took over, which were approximately 1.25 million? Is the Minister also aware that, according to an impartial report by the Royal Statistical Society about a year ago, the 32 changes this Government have made in defining unemployment, so that "unemployment" becomes "claimant unemployment", have resulted in the existing figures regarding real unemployment being understated by 1.5 million?

Lord Henley

My Lords, that is simply not the case. The noble Lord knows that there are two methods of counting unemployment. First, there is the claimant count, which, quite rightly, counts those who are out of work, looking for work and receiving benefit. Secondly, there is the Labour Force Survey, which, as the noble Lord knows, works on the internationally accepted ILO rules and which shows broadly the same pattern as the claimant count. It shows that unemployment has been coming down steadily since 1992. At the same time it has been rising in Europe; namely, in Germany, France, Italy and Spain.

Lord Marlesford

My Lords, does my noble friend the Minister agree that we should really relish discussion of the subject on this side of the House? However, we must take inflation as well as unemployment together because both are crucial factors in managing the economy. Does my noble friend recall that in the five years up to May 1979 retail prices increased by 91 per cent., and that in the five years up to January 1997 retail prices increased by 14 per cent? When talking about figures, does my noble friend further agree that the very interesting figures on unemployment by constituency, which are published monthly, show that in January there were only 129 constituencies where unemployment was 10 per cent. or higher; that 199 constituencies had unemployment of under 5 per cent.; and that there were actually 39 constituencies where unemployment was under 3 per cent., which is full employment in Beveridge terms?

Lord Henley

My Lords, I am grateful to my noble friend for bringing those figures to the House and also for reminding the House of the important link between unemployment and inflation. I also remind my noble friend that under the previous Labour government unemployment doubled from half a million to 1 million.

Earl Russell

My Lords, is the Minister aware that according to a Written Answer given to me by his noble friend Lord Mackay of Ardbrecknish on 23rd January 1996 the number of people over 50 and under 65 who have not worked for 10 years is 2,594,000? The Minister will doubtless be aware that these people do not appear in the unemployment figures because they are excluded from the actively seeking work rules. I would not for one minute maintain that they should all be included in the unemployment figures. However, would the Minister be equally unwilling to say that none of them should?

Lord Henley

My Lords, if people are not seeking work I do not believe that they should be counted in the unemployment count.

Viscount Ullswater

My Lords, before the Opposition get too complacent about the figures from 1979, does my noble friend agree that in the late 70s the UK average unemployment figure was above the European average and rising, whereas now it is below the European average and falling?

Lord Henley

My Lords, my noble friend is absolutely correct. For example, the figures for 1975 show unemployment of about 4.3 per cent., which was higher than in Germany, France and Spain. When one looks at the figures for 1995–96 one finds that they are considerably lower than those of France, Spain, Germany and Italy, which are all high and rising.

Lord McCarthy

My Lords, how does the Minister square the answers he is giving today with the Government Statistical Service's Labour Market Trends, which has stated in the past two months' editions that the service does not know what is happening as regards unemployment? The January edition of Labour Market Trends states that the statistical service does not know how much of the recent fall in claimant unemployment is due to JSA and how much is due to job growth and therefore it does not know whether the downward trend has accelerated. Surely we have come to a point where the Government should get rid of the discredited claimant count and publish the Labour Force Survey month by month. The only reason they do not want to do that is because, contrary to what the noble Lord said, the survey shows that unemployment is still 2.2 million; still 8 per cent.; and falling at a far lower rate than the Government suggest.

Lord Henley

My Lords, I am interested in the new party policy that will abolish the count and rely solely on the monthly Labour Force Survey. I make it quite clear, as I did earlier, that the figures are obviously difficult to interpret. We never know precisely how many have come off and gone into jobs and how many have come off because they should not have been on the count in the first place. I think what the noble Lord can accept is that unemployment has fallen by over 1 million but employment—that is, real jobs—has risen by 900,000. So there are many new jobs as a result of the economic policies we are pursuing.

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