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Volume 706: debated on Wednesday 21 January 2009


Asked By

To ask Her Majesty’s Government what are the latest figures for (a) total unemployment in the United Kingdom, and (b) claimants of unemployment benefit.

My Lords, in the quarter to November 2008, 1,923,000 people were ILO unemployed. In December 2008, 1,157,200 people were claiming jobseeker’s allowance.

My Lords, we would all agree that those are quite alarming figures. As I understand it, they are likely to increase. What steps are the Government taking to reduce those numbers and when will we be in a position to see whether those measures are working? In parenthesis, I listened to the Prime Minister at Question Time this morning. Although he showed a proper degree of regard for the welfare of the unemployed, he had very little, if anything, to say about actual measures to reduce the numbers of unemployed.

My Lords, I am rather surprised at the nature of that supplementary question. Of course, these figures are disappointing and, of course, the Government take them very seriously. We know there has been an intensification of the global financial crisis—the latest data, in particular from the US, demonstrate that—which impacts on economies around the world, including in the UK, but as a Government we have a choice; to do nothing, sit back, wring our hands and wait for the market to address it, or to be active. That is what we have been. I take noble Lords back through October in terms of what we have done in banking recapitalisations, support for the banking industry, the DIUS redundancy support package, the extra support for small firms, the Pre-Budget Report and the fiscal stimulus, the homeowner mortgage support scheme, changes to the credit guarantee scheme, new apprentices, the job summit announcement and more. We have active labour market policies.

My Lords, does my noble friend agree that the noble Lord, Lord Roberts, may have heard what the Prime Minister said at Question Time today, but that he clearly did not understand it? The Prime Minister contrasted the measures that the Government have put in place to tackle unemployment with an Opposition who so far have said no to almost everything.

My Lords, I agree with my noble friend. We are faced with an Opposition who are basically a do-nothing Government on this issue. Let us contrast it with the historical position. The employment level at its worst in 1992-93 under the noble Lord’s Government was 25 million; it is now 4 million higher, despite recent reductions. The unemployment level at that time was more than 3 million, and we are now 1.1 million below that. Our record is strong, but there is much still to do.

My Lords, do the Government realise that Britain is already in deep recession? Deflation has arrived, with retail prices falling by 2.5 per cent over the past three months. After these dire unemployment figures, when are the Government going to do something to get money into the pockets of people who really need it, and who will spend it, starting with a good rise in the basic state pension?

My Lords, we have already announced the increase in the basic state pension for next year using the mechanism of the Christmas bonus effectively to accelerate its payment. In relation to the banking sector, we started by recapitalising it to make sure it had a strong capital base, and other measures have flowed since, in particular those announced on 19 January, to try to get liquidity flowing through the banks. It is important that we do that. Noble Lords on this side, my noble friend Lord Myners in particular, have been heavily engaged in doing just that.

My Lords, not in a spirit of yah-boo politics, may I gently remind the noble Lord opposite that in the 1980s the figures were frequently three times what they are now? For Wales, where the noble Lord was a distinguished Minister, the figure was not 60,000 as now, but frequently well in excess of 150,000. I cannot recall any Minister today saying that unemployment is a price well worth paying.

My Lords, I am grateful for my noble friend’s input on those statistics. The final point he made is right. We believe in proactive labour-market policies. We are going to come through this difficult time at some stage, and when we do, we need to make sure that people are in a position to be able to take advantage of the upturn when it can be achieved. That is the clear difference between the approach we are now taking and the approach the previous Government took.

My Lords, the Minister said that the trouble with the Opposition is that they would do nothing and the Government would do something. When is the “do something” going to have an effect? Last October, they gave £38 billion to the banks; this week they have given £500 billion to the banks. When is that £538 billion likely to lead to a reduction in unemployment? Will it be this year? Are the Government really facing up to the reality? I remind the Minister that George Orwell said that the trouble with all left-wing politicians is that they cannot tell the truth about the immediate future.

My Lords, the Government are not in the business of projecting rates of unemployment for any time in the future. I outlined a progressive series of measures, but, of course, they will take some time to come through into the system. As I said earlier, what has happened in the past two months has been an intensification of the global financial crisis. Some data coming out of the US are frightening. The measures that we have adopted are the right ones, but they will take time to work through the system.

My Lords, has the Minister’s department made any estimate of what the impact would be on levels of unemployment if substantial cuts were made in public expenditure?

My Lords, not directly because we hope that we will never have to face that situation. However, that is something that the department would have to deal with should there be a change of Government. That would be frightening, because contemplating reductions in public expenditure at the current time would be going in exactly the wrong direction. We have been pulling forward capital expenditure, and accelerating capital projects, to help stem the rise in unemployment and to increase employment.