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Unemployment Statistics

Volume 32: debated on Thursday 18 November 1982

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4 pm

With permission, Mr. Speaker, I wish to make a statement about unemployment statistics.

In March 1981 a scrutiny under the auspices of Sir Derek Rayner on the payment of benefit to unemployed people recommended that registration at jobcentres by unemployed people claiming benefit should become voluntary, as it was not an effective test of availability for work and abolition would benefit both job seekers and the employment service. Acceptance of that recommendation was announced in July last year and it came into effect on 18 October. Jobcentres can now cut wasteful procedures and concentrate on their main task of matching jobs and job seekers.

Unemployed job seekers who can find work for themselves are no longer compelled to visit jobcentres. Claimants need visit only the benefit office where a test of availability for work now takes place. That simplification of procedure will lead to savings of 1,350 staff and £10 million a year.

As a consequence of voluntary registration, the records of people registering at jobcentres are no longer a valid basis for unemployment statistics. Because of that the unemployment count has been transferred to benefit offices and is based on the records of claimants, which are held mainly on computers. The change was explained in the Employment Gazette in April last year. Attention was again drawn to the forthcoming change in a reply to a parliamentary question on 29 July this year and a further article appeared in the Employment Gazette in September.

The figures for November will be published on the new basis. To enable a fair comparison of past and future unemployment figures, I am today publishing figures on the new basis for the past year. An explanatory note is available in the Vote Office. The new figures are more accurate. They give a more up-to-date picture on the day of the count. Instead of depending on costly manual counts in hundreds of offices throughout the country, they will be based on carefully tested and working computerised systems.

Although the new totals differ from those that the old system produced, the trend in unemployment shown by the new figures is no less reliable. In the new totals, severely disabled people who were formerly excluded are now included. However, a count of people who register at jobcentres but who do not claim benefit is no longer possible and they are not included. Finally, the count is reduced because the use of the benefit computer records removes far more of those who find jobs in the period immediately before the day of the count. Under the manual system they could have been recorded as unemployed for up to a fortnight or more after they started work.

During the past year the reduction between the new count and the old would have varied from month to month. It would generally have been between 170,000 and 190,000. On October the difference was exceptionally large at 246,000. Nearly half the difference is the result of the more accurate count, which in October removed about 100,000 people who were no longer unemployed. To ensure a fair picture, there will be a special count in the summer of new school leavers who are not yet entitled to benefit.

The new figures do not make the problem of unemployment less serious, but they give more accurate and less expensive statistics.

Is the Secretary of State aware that his announcement is a cosmetic device to conceal the number of registered unemployed? The removal of 246,000 unemployed at a stroke will not fool anyone. Is it not a pity that the right hon. Gentleman has not told the House today that he is fulfilling his job as Secretary of State for Employment by announcing a real reduction in unemployment? Will he list the effects of the cosmetic reduction region by region?

Does the right hon. Gentleman recall that when unemployment was only one third of today's level the Prime Minister used to stand at the Dispatch Box and tell the House that under the Labour Government people were not getting real jobs? This Government are not even providing real statistics. The Secretary of State's announcement is a brazen attempt to massage the figures in order to fool the country. However, we shall ensure that he will not succeed.

No one, not even Opposition Members, need feel in danger of being fooled by statistics. I did not conceal the details of the changes as they were being considered. I am fulfilling my job by offering more accurate statistics at much less cost. The right hon. Gentleman should bear that in mind. Regional figures will be published today. I am sure that the right hon. Gentleman does not wish me to bore the House by reading them now. I hope that in future we can provide much more detailed figures as a result of the improved system.

I thank the Secretary of State for the explanatory material that he provided to the House. Will he confirm that there is a difference of a quarter of a million between the new figures and the old, as he said, not for one month, but for several months? His Department estimates the number of unregistered unemployed at 300,000, and 360,000 have been removed from the dole queue as a direct result of special employment measures. Yesterday his Minister of State estimated that another 50,000 would be removed from the register as a result of job-splitting measures. Therefore, 1 million people have disappeared from the register and the true unemployment figure is 4 million, or 16 per cent.

No. The figure has not been 246,000 for some months. The right hon. Lady has misread the figures. On average, during the past 12 months—

—the figure for the year has been 170,000 or 190,000. For the summer months, before school leavers are registered for benefit in September, the figure is larger. We shall publish, as an addendum to the figures, the number of school leavers, so the right hon. Lady can add the two together and reach the correct figure.

As to the right hon. Lady's suggestion that there are 4 million unemployed, if she examines the census report—it is entirely independent and is based upon census officers asking people whether they are employed or unemployed and whether they are seeking work—she will see a close correlation between the figures as published and the census figures. The census figures would not lead one to the conclusion that there were 4 million unemployed, or any other figure that the right hon. Lady chooses to pull out of the air.

Is my right hon. Friend aware that many people will be glad that they do not now have to go to two centres to register for unemployment benefit, and that by going just to one centre, not only will some confusion be stopped, but much time and frustration will be avoided?

Yes, my hon. Friend is right. It is extremely helpful to people on limited incomes that they do not have the expense of attending more offices than is necessary at a time of considerable hardship for them.

As we are not far off a general election, is not this decision and its timing designed purely to fool the British public about the size and nature of the massive problem of unemployment with which Britain is faced?

The right hon. Gentleman was perhaps not quite paying his usual attention to what I told the House. I explained that this decision was taken more than a year ago and that the change was first explained in the Employment Gazette in April last year.

Is my right hon. Friend aware that the Opposition have described as merely cosmetic his announcement of the saving of £10 million on the administration of the scheme? Will he note that any saving of money is apparently cosmetic and electioneering? Will he go back further than 12 months in making a comparison between the position now and in the past?

I note what my hon. Friend said about the frivolous attitude of Opposition Members to taxpayers' money. I intend that we should publish figures going back perhaps as long as 10 years to ensure that the trend lines can be properly seen and the comparison properly made.

Is the Secretary of State aware that outside the House there will be a widespread feeling that the purpose of his announcement is to camouflage the massive increase in unemployment under this Government? Will he give an assurance that it is not his intention to follow this up by closing the jobcentres? How will those who are unemployed for more than 12 months, who do not go to an unemployment office and who make no claim, enter into the figures? What will the right hon. Gentleman do to include in the figures those married women who at present are not included?

The hon. Gentleman has accused me of an act of camouflage. When one considers the number of times on which since I became Secretary of State I have notified the change, it appears to be a curious piece of camouflage.

We are considering whether every jobcentre fulfils a proper function and does so effectively, and whether there are better and more effective ways of ensuring that those who are unemployed can have access to the jobcentre service.

There will be no difference for the long-term unemployed. They are still registered at unemployment benefit offices and will, of course, remain on the register. Were that not the case, the figure would have come down by very much more.

Is the Secretary of State aware that, although the statistics showing the number of people successfully claiming benefit may be of interest to the House, many hon. Members wish the unemployment figures to show the number of unemployed and seeking work? Does he not agree that the new figures are even more inaccurate than the previous ones?

The hon. Gentleman has to take his pick from a number of statistics, none of which can ever in human life be perfect. It is a great advantage that about 100,000 and more people who are actually at work are no longer to be recorded as being out of work. I am sure that that is good.

The hon. Gentleman referred to those who are not qualified for benefit but who may be seeking work. It depends on how hard they are seeking work—[Interruption.] The right hon. Member for Doncaster (Mr. Walker) should let me finish. Some of them may be seeking work by looking in the columns of the press. Some may be going to private sector employment agencies, and some may be going to jobcentres. Since there is no compulsion on them to go to jobcentres—and I am sure that is right—to publish the jobcentre figure would be meaningless.

Will the computerised system enable my right hon. Friend's officials around the country to record a higher proportion of vacancies that exist but which at present are not notified? Will it also bring together more rapidly and clearly job vacancies and those who are genuinely seeking work?

The answer to my hon. Friend's second question is that it will help, because there will be no requirement for people who do not wish to be served by jobcentres to go to them. Therefore, there will be a better opportunity to serve those who need the service.

In reply to my hon. Friend's first question, I can tell him that the vacancy figures are also now computerised. They show very little change from the traditional method, but we believe they will be more effectively transmitted around the jobcentres as computerisation continues to take place, and therefore a better service will be offered. I hope that all employers who have vacancies will notify them to the jobcentres, because, as my hon. Friend knows, at present only a small proportion of vacancies are notified to the jobcentres and therefore appear in the statistics.

Will there be a run-in period so that the House can see both the new and the old figures? The right hon. Gentleman mentioned the publication of figures from 10 years back, but I want to know about the future. Will the two figures be published side by side for any time at all, or will the new system be introduced immediately and the old one made null and void from day one? Who will be counted? Will it be those who are receiving benefit because they are unemployed, or will it be those who have made a claim for benefit? As the Secretary of State knows, more than 400,000 of the presently registered 3.3 million unemployed receive not a penny piece from the State by way of unemployment or supplementary benefit. How will they be counted in the new system?

The hon. Gentleman will see from the change in the figures that they have not been excluded—

—and it would not conform with the base of the statistics if they were.

The hon. Gentleman has obviously not had an opportunity to read the explanatory memorandum that I placed in the Vote Office or to see the material that was published in April and September in the Employment Gazette, which made the position plain. It is no longer possible to produce statistics on the old basis, because there is no longer a requirement for people to register at a jobcentre. To ensure that there can be a fair comparison, I have for the past 12 months published the figures on both bases.

Do the figures apply to local authority areas, or to travel-to-work areas? Will my right hon. Friend assure the House once again that there can be no question of deception if he is comparing the figures for past years with the immediate future?

My hon. Friend's second point is correct.

I hope that periodically we will be able to produce new analyses by local authority areas. What is more, we shall be able to get some new series of flows into and out of unemployment, such as by age and by duration of unemployment, which can be dealt with in more detail. For the first time we shall have proper information on completed spells of unemployment. There will be a considerable advantage in terms of the coverage of statistics. However, I have to be fair. One or two statistics will not be available in quite the same form as they have been in the past.

Order. I was going to say that I propose to call those hon. Members who have been rising but there is a large number. If hon. Members are brief, we will see how we get on.

Does the Secretary of State realise that his blatant attempt to cook the books will backfire, just like the tax and prices index, which was another attempt to con the public? As unemployment rises inexorably under the Government's economic policies, each unemployed person, whatever the statistics, will know that he is unemployed, especially if the 5 per cent. cut in the benefit continues.

Of course unemployed people know that they are unemployed. I do not think that the hon. Gentleman raised any other points.

Bearing in mind my correspondence with the right hon. Gentleman and his Department about the number of women excluded from the figures because of the new way of compiling them, will he now—as he promised in a letter to me—announce the number of women who have been excluded from the figures for this month and who will be excluded in the following months?

It might be difficult to do that as a separate list, because it is difficult to know how many people are not in the figures in any particular category, but I shall do my best to help the hon. Lady if I can.

Is the Secretary of State aware that his statement reminds many of us in the Labour movement of the likeness between statistics and a woman's bikini—what it reveals is interesting, but what it conceals is vital?

Since the census, contrary to the Minister's assertion, showed an undercount of about 10 per cent., would it not be wise to experiment, as the Americans have done, with sample censuses in order to buttress the figures?

Secondly, is there not a case for counting the number of people in jobs? The experience of the Labour Government was that there was a rise in unemployment of ¾ million, but a fall of only 20,000 in the number of jobs. Under the Conservative Government there has been a rise in unemployment of 2 million and a consequent loss of 2 million jobs, which is very different.

I do not think that sample censuses would necessarily produce better figures than we have. I think that under the new arrangements we have a good system for recording people who are registered at benefit offices. The hon. Gentleman must judge the new figures for himself. As I said, they are lower than the old figures. The trend lines and the year-on-year changes are extremely similar. We all know that the change in the base of the figures has not made any difference to the total number of people employed or unemployed.

I, too, would like to get better and more up-to-date figures of the number of people employed. Perhaps we shall be able to find ways to do so.

Can the Secretary of State tell me how the jobcentre at Kirkby should concentrate on its function, as he described it this afternoon, of matching job seekers and job vacancies, when there are several thousand unemployed and literally no vacancies?

The hon. Gentleman must not get it wrong. It is possible that no vacancies may be notified. I should think it unlikely that no vacancies are notified to the Kirkby jobcentre, although I should not want to doubt the hon. Gentleman's word. He will know that many employers do not notify vacancies to the jobcentres, and even in Kirkby people find work.

Will the Secretary of State accept that because the old figures did not tally with what people observed around them, most people doubted whether his old figures adequately covered the number of people unemployed?

As an example, I draw the Secretary of State's attention to one supplementary benefit office in my constituency, where the number of unemployed persons has increased from just over 2,000 12 months ago to just under 5,000 now.

The hon. Gentleman says that most people did not believe the old statistics. I think that most people took them for what they were—a reliable indication of the trend of unemployment. I believe that they will take the new figures as a reliable indication of the trend. They will see that in some ways the new figures measure the actual number of unemployed more effectively than the old figures did. In another way, they exclude some people who were included under the old figures.

I imagine that the hon. Gentleman's figures for the supplementary benefit office in his constituency are right.

I am sorry that the hon. Member for Ormskirk (Mr. Kilroy-Silk) has left the Chamber, because I have just been told that 16 vacancies have been notified at the Kirkby exchange.

The Secretary of State's new figures show that the North-West still has one of the highest figures for unemployment outside Northern Ireland. The number of unemployed school leavers in the North-West is higher than anywhere in the United Kingdom. Will the right hon. Gentleman get his priorities right by attacking unemployment instead of indulging in union bashing? Will he ask his right hon. Friend the Secretary of State for the Environment, who has ministerial responsibility for Merseyside, to pull his finger out and stop embarking on cosmetic and Mickey Mouse gimmicks?

I should not dream of using such vulgar language to anyone, least of all to my right hon. Friend the Secretary of State for the Environment.

The Government are trying to combat unemployment. That is why inflation has been brought down. That is why interest rates have been brought down. That is why we have preached moderation in pay settlements—a policy which has been accepted. That is why we have preached good industrial relations—a policy which has been accepted by workers, even if not by all trade union leaders. That is why, when I was in Brussels recently at the jumbo council, together with all the other Employment and Finance Ministers, we agreed on the necessity for broadly similar measures—similar to those being carried out in Britain. We all eschewed crazy reflationary measures of the sort advocated by the hon. Gentleman.

Will the Secretary of State break the new £200 parliamentary question limit and publish what the figure would have been in May 1979 had the new system of calculation been used? When he publishes the back figures for the past 12 months, will he consider publishing them also for each region and for each travel-to-work area?

I have published today the figures for the past 12 months and, as I said earlier, I hope to publish the figures for a long way back. I do not think that it would be possible to publish figures for every travel-to-work area. That would be an absurd waste of money.

As my hon. Friend the Member for York (Mr. Lyon) has said that the official census showed that there was an 11 per cent. under-count of unemployment figures calculated on the old basis, will the Secretary of State confirm that this afternoon he has managed to reduce unemployment by 500,000?

I do not think that I would agree to that. The hon. Gentleman may have got some of the figures a little wrong. The census of population for April 1981—the last accurate figures that we have of this sort—showed a total number of unemployed of 2,496,000. Under the old basis of registration the figure was 2,426,000. On the new basis for claimants the figure is 2,279,000. In each case slightly different definitions of unemployment were measured. It should be clear that the talk of 4 million unemployed is rather ridiculous.