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Volume 705: debated on Wednesday 12 November 2008

asked Her Majesty’s Government:

How the rate of unemployment in the United Kingdom in October 2008 compares with the rate in October 1997.

My Lords, the latest unemployment figures, which were released today, show a jobseeker’s allowance claimant rate of 3 per cent for October 2008 and an ILO unemployment rate of 5.8 per cent for July to September 2008. This compares to a claimant rate in October 1997 of 4.9 per cent and an ILO unemployment rate in September to November 1997—the quarter centred on October—of 6.6 per cent. The unemployment figures for September to November 2008 will be available in January 2009.

My Lords, I think that we are all aware of the worsening situation as regards unemployment. When do the Government expect last week’s 1.5 per cent interest rate cut to have a beneficial effect on the 1.5 per cent contraction in the economy, which both the IMF and the Bank of England expect next year? Is it not absolutely clear that targeted tax cuts or stimuli are now urgently needed if the relentless rise in unemployment is to be arrested?

My Lords, I guess that the Government will present their own forecasts in the Pre-Budget Report, which I understand is due soon. We do not predict what is likely to happen to unemployment rates, although the DWP is clearly focused on ensuring that it has the capacity to deal with changes that the current environment might engender. We have just heard from my noble friend about the measures that have already been taken, given the global economic crisis that we face in this country and around the world, to capitalise the banks and to enhance liquidity in the banking system. In addition, particular help for small businesses has been announced in recent weeks, as well as support for families. We await with interest the PBR, which, as I said, we expect shortly. I should perhaps comment on David Cameron’s announcements yesterday on the proposals, which I think it is right to say were not greeted with overriding acclaim. However, the issue of further incentives and stimuli will be addressed in the PBR.

My Lords, I think that we all recognise the difficulties that we are experiencing as a result of the global economic downturn. Unemployment will rise. We do not like it, but we have to understand it. It strikes me that we need to make realistic comparisons. How many people are in employment now compared with in 1997? How does today’s unemployment compare with that of the 1980s? Finally, what does the Minister think the Opposition would do if they were in power?

My Lords, in relation to the last question, I prefer not to deal with hypotheticals. On my noble friend’s specific questions, employment levels now, compared to 1997, are up by about 3 million. On unemployment levels, the claimant count is at about 980,000. In the 1980s and 1990s, that figure reached something like 3 million. The key lesson to learn from the past is that, in challenging economic times, we should not abandon people who become unemployed and put them on the scrapheap; we should continue to have active labour market policies. At the moment, Jobcentre Plus is keenly geared up to do that.

My Lords, is the Minister aware that, when this Government came into office in 1997, only one adult in 10 with a learning disability was in paid employment? Unhappily, 11 years later, that figure still applies in spite of all the disability legislation that has gone through this House and the other place. Despite the looming recession, what can the Government do to encourage employers to improve on that figure, bearing in mind that there is much specialist support available to make this possible?

My Lords, the noble Lord raises an important point. If one looks at the overall employment rate and its composition, one sees that disabled people, lone parents and ethnic minorities do not reach the average rate that applies for the rest of the economy. It is certainly right to say that people with learning disabilities have not made the progress that we would wish. That emphasises to me the need to continue to reinforce and entrench those active labour market policies to make sure that we engage with employers through local employment partnerships and city strategies and encourage them to take advantage of the funding streams that are available. In these challenging times, we should not take our foot off the pedal of those important and progressive reforms.

My Lords, when unemployment is shooting up by 50,000 a month, will the Minister explain to his noble friend sitting next to him that that is not an economy running anywhere near full capacity? I used to know a chap called Paul Myners who knew what he was talking about. I do not know what is in the Treasury water. Perhaps a search party could be sent out for him because the complacency of his answers was unbelievable. Do the Government realise that there is every chance that they will be fighting the next election with 3 million unemployed?

My Lords, I do not know where that figure of 3 million unemployed comes from; it seems to be speculation on the part of the noble Lord. I am delighted that my noble friend Lord Myners has joined the government Front Bench. I spent a little time before my noble friend Lord Davies struggling with Treasury issues; my noble friend Lord Myners deals with them with ease and expertise. On capacity, we should bear in mind the fact that a dynamic labour market is operating. We look at the net changes—those are the figures reported—but over the past month, for example, some 270,000 people have gone on to jobseeker’s allowance and 230,000 have come off, while every day something like 10,000 vacancies are notified to Jobcentre Plus. A lot is happening out there.

My Lords, does the Minister accept that he is responsible for answering questions on activities that have happened on this Government’s watch? He mentioned 980,000-odd people claiming jobseeker’s allowance. In fact, the figure is almost 1,000 more than that. Is that not the highest figure since spring 2001?

My Lords, the figure certainly has gone up in recent months, as we have readily acknowledged, but it is significantly below the levels that we inherited in 1997. Something like a million people have come off income-related benefits over the period of this Government.