HL Deb 11 February 1998 vol 585 cc1136-8

2.54 p.m.

Lord Islwyn asked Her Majesty's Government:

In deciding their economic strategy, what priority they give to reducing unemployment.

Lord McIntosh of Haringey

My Lords, the Government's central economic objective is high and stable levels of growth and employment. We are developing comprehensive measures to provide new employment opportunities and raise the sustainable rate of employment, including the welfare-to-work programme, tax and benefit reform, investment in education, and policies to promote economic stability.

Lord Islwyn

My Lords, perhaps I may draw to the Minister's attention the remarks of Sir Nigel Wicks, who is the chairman of the European Union monitoring committee and a very senior Treasury official. He was quoted recently in the Observer as telling a European parliamentary committee that the European central bank should not take account of unemployment when setting policy. He said, "That is fundamental". How does the Minister reconcile the statement of that eminent gentleman with the Government's welfare-to-work policy and also, I presume, their policy on eventually restoring full employment?

Lord McIntosh of Haringey

My Lords, in his speech, Sir Nigel Wicks referred properly to the primary objective of the European central bank as that of maintaining price stability. But the European central bank has the further objective that, without prejudice to the objective of price stability, it shall support the general economic policies in the Community with a view to contributing to the objectives as laid down in Article 2. Article 2 refers to sustainable and non-inflationary growth, a high level of employment, the raising of the standard of living and quality of life and economic and social cohesion. Sir Nigel rightly went on to say that price stability translates into high investment and employment.

Lord Peston

My Lords, is my noble friend aware that some of us do not agree with that last statement and that we regard it as economic nonsense? However, that is by the way. In asking the question, my noble friend referred to "full employment". Is it the Government's policy to endeavour, in the course of the foreseeable future, to restore this country's economic condition to one of full employment?

Lord McIntosh of Haringey

My Lords, I can do no better than to quote the Chancellor from a speech to the TUC New Deal Conference on Monday. 8th December last, when he said: Call it—like Keir Hardie's slogan—'work for all'; call it—like ours since 1945—full employment; call it high and stable levels of growth and employment; call it opportunity for all; call it the right to work—the demand for work has been the constant, indeed the central demand of one hundred years of Labour history". My Lords, it still is.

Lord Ezra

My Lords, will the noble Lord agree that every time we have a recovery in the economy, there is a developing shortage of skills? Will he tell us whether, in the present situation, in which happily there is a recovery in the economy, the Government's policies are aimed at and will succeed in reducing that shortage?

Lord McIntosh of Haringey

My Lords, I believe that that is implicit in all that I have been saying and all that the Government have been saying. The whole of the welfare-to-work policy and all our policies on education and employability are designed precisely to meet the point which the noble Lord rightly makes.

Lord Barnett

My Lords, we do not yet of course have a European central bank, but we do have our own central bank. Will the Minister recognise that the instructions that the Chancellor gave to the chairman of our central bank were to put inflation first even if the economic policy did not necessarily agree with that and it came second to his first priority?

Lord McIntosh of Haringey

My Lords, I do not accept the accuracy of my noble friend's description of the instructions to the Bank of England. What we said to the Bank of England is that low inflation is essential for high and sustainable growth. However, I know that my noble friend Lord Peston does not agree with that view. The bank's monetary policy is to maintain price stability and, subject to that, to support the Government's economic policy, including their objectives for growth and employment.

Lord Dormand of Easington

My Lords, is my noble friend the Minister aware that, despite the strenuous efforts being made by the Government, the northern region still has the highest rate of unemployment in the UK outside Northern Ireland? In particular, will my noble friend do all he can to expedite the report which is to be issued by the committee set up to consider the special problems facing the former mining areas?

Lord McIntosh of Haringey

My Lords, I will indeed do so. Of course, it is a feature of our welfare-to-work programmes that they can and, indeed, have to be targeted regionally if they are to be effective when, as my noble friend rightly says, recovery manifests itself differently in different parts of the country.

Lord Mason of Barnsley

My Lords, is my noble friend the Minister aware that one of the most successful organisations in the country in cutting the dole queues is the Prince's Youth Business Trust? Is he also aware that, last year, the PYBT took 3,500 young persons off the dole and launched them into their new businesses? In the light of that success, can my noble friend assure the House that he will use his best endeavours to get the responsible government departments to work with the PYBT in developing the New Deal?

Lord McIntosh of Haringey

My Lords, I can certainly give my noble friend that assurance. For many people self-employment is the best route from welfare to work. Indeed, it is something that we have recognised by introducing the self-employment strand into the New Deal for 18 to 24 year-olds. Many organisations, including the Prince's Youth Business Trust, have been most helpful in mentoring and supporting young people who start off on the road to self-employment. We want to give every help that we can in that respect.

Lord Mackay of Ardbrecknish

My Lords, has the Minister studied Clause 11 of the Bank of England Bill that we shall be discussing on Friday, which makes it perfectly clear that the primary concern of the Bank of England and the governor will he to control inflation?

Lord McIntosh of Haringey

My Lords, that is what I said to my noble friend Lord Peston and, indeed, to my noble friend Lord Barnett. We are all slightly paraphrasing but, as the noble Lord rightly says, it is the primary objective of the Bank of England to maintain price stability.

Lord Parry

My Lords, will my noble friend the Minister accept from me that, while we rejoice in the success of the various agencies in Wales—for example, the Welsh Development Agency, the Wales tourist board and the Welsh Development Board for Rural Wales—in overcoming some of the problems of unemployment, nevertheless, throughout my lifetime there has been a serious endemic situation in which far too many people have been unemployed for almost all of their working lives? In recognising that fact, does my noble friend realise that many of the questions being put to him this afternoon have come from those sitting on the Benches behind him?

Lord McIntosh of Haringey

My Lords, 1 note that point. I also note that my noble friends do agree that full employment is quintessentially a Labour Party issue. Indeed, my noble friend has powerfully reinforced the valuable points made by my noble friend Lord Dormand when he spoke about the needs of the northern region.