HL Deb 04 June 1997 vol 580 cc639-42

Lord Wyatt of Weeford asked Her Majesty's Government:

Whether they intend to alter the method of counting the unemployed; and, if so, when.

Lord McIntosh of Haringey

My Lords, the Director of the Office for National Statistics is responsible for deciding the form, coverage and timing of release of statistics issued by his office taking into account the views of customers. The Office for National Statistics is presently consulting customers on the future presentation of labour market statistics; the consultation exercise was launched in May with responses invited by 14th June. Subject to the responses received changes will be introduced later this year. The proposals reflect the House of Commons Employment Select Committee recommendation that more prominence should be given to the measure of unemployment which is based on the internationally agreed International Labour Organisation definition.

Lord Wyatt of Weeford

My Lords, is the Minister aware that on Sunday 27th April the Prime Minister said that the then Government had been cooking the books and that the real figure of the unemployed was 529,000 higher? As this is an urgent matter in view of the need to pay these people the unemployment benefits which they justly deserve according to the Prime Minister, surely the Government should be getting a move on. Will they also give an estimate of the cost of adding 529,000 people to the unemployment figures who were previously not counted as unemployed?

Lord McIntosh of Haringey

My Lords, the process that I described of change in the presentation of statistics was of course initiated by the previous Government. We are giving the matter all the urgent attention that it deserves. However the statistics are presented, not a single extra person will be made unemployed.

Lord Clark of Kempston

My Lords, does the Minister agree that the economic policy of the previous Government has been responsible for consecutive reductions in unemployment?

Lord McIntosh of Haringey

My Lords, there have certainly been real reductions in unemployment as well as reductions which depend on the way in which statistics are presented.

Lord Dean of Beswick

My Lords, will the Minister revert to the figures and the criteria that were used in 1979 and dispense with those we inherited from the previous Government which recorded only selective groups of unemployed people? If we revert to the original method we should find out the total number of unemployed rather than have massaged figures.

Lord McIntosh of Haringey

My Lords, I do not think I am capable in the time available of recounting all the changes that have taken place in the calculation of unemployment figures. However, I refer to the most recent example concerning the jobseeker's allowance which was introduced in October of last year. The principal effect that can be estimated—it is difficult to do this—is that it has led to about 5,000 extra claimants leaving the count each month. That means that the figures are by now 25,000 lower than they would otherwise have been.

Lord Henley

My Lords, if the system is so unsatisfactory will the noble Lord tell the House what is the current cost of the monthly unemployment count; what is the current cost of the quarterly Labour Force Survey; and what would be the cost of a monthly labour force survey which seems to be the route down which the noble Lord's party wishes to proceed?

Lord McIntosh of Haringey

My Lords, I cannot give an answer on the total cost of the claimant count or indeed of the total Labour Force Survey. They are used for a whole variety of other purposes. However, the introduction of monthly moving quarterly totals from the Labour Force Survey—which is the main proposal being made by the Office for National Statistics—is estimated at a quarter of a million pounds a year extra over the existing costs.

Lord Acton

My Lords, is the Minister aware that the most recent ILO rate of unemployment for the United Kingdom was 7.1 per cent., for the United States of America it was 5.3 per cent. and for Japan 3.3 per cent.? Can the Minister say whether the Government have a target rate of unemployment on the ILO scale bearing in mind the authority of that scale?

Lord McIntosh of Haringey

My Lords, the main thrust of the noble Lord's question is wide of the original Question on the Order Paper. However, I can confirm that to give greater prominence to the ILO figures rather than to the claimant count figures would mean an increase of approximately 20 per cent., or 350,000, in the numbers which are presented to the public and used by government.

Lord Wyatt of Weeford

My Lords, is this not a case of the Government breaking one of their pledges having promised these unfortunate 529,000 people that they should be counted among the unemployed and receive their benefit? The Government are now going back on their word.

Lord McIntosh of Haringey

My Lords, that question shows such a wide range of misunderstanding of unemployment and of unemployment figures that it is difficult to address it directly. No one extra is made unemployed by a change in the way in which the figures are calculated.

Earl Russell

My Lords, does the Minister agree that the exchanges to which we have been listening illustrate the case for the proposal in our parties' joint constitutional declaration for an independent commission to manage government statistics?

Lord McIntosh of Haringey

My Lords, I of course support the proposals of our parties' joint constitutional committee. I should point out that it is to the credit of the previous Government that the presentation and calculation of unemployment figures was taken away from the Department for Employment and given to the Office for National Statistics. A start has been made on an all-party basis.

Lord Campbell of Alloway

My Lords, is my noble friend aware—I apologise for calling him my noble friend; I have not quite become used to the system—is the Minister aware that whenever we produced these employment figures year after year they were always said to be fiddled? The Labour Party said that they were fiddled. What is going on now? Is this a fiddle proof system that they are seeking to introduce?

Lord McIntosh of Haringey

My Lords, the claimant count which has been used has been changed a number of times. It is a curious coincidence that it always seems to reduce the figures presented. What is now proposed—if consultation supports that—is that we should give greater prominence to an internationally agreed definition of unemployment which surely is the right thing to do if we are to make the comparisons that the noble Lord, Lord Acton, made with other countries as regards our unemployment rates.

Lord Kennet

My Lords, would it not be right to say that what we are now doing is "unfiddling" the figures?

Lord McIntosh of Haringey

My Lords, my noble friend simplifies the issue admirably.