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Volume 712: debated on Wednesday 15 July 2009


Asked By

To ask Her Majesty’s Government what is the latest quarterly figure for total unemployment in the United Kingdom; and what is the latest monthly total number of claimants of unemployment benefit.

My Lords, in March to May 2009, total ILO unemployment in the UK was 2,381,000 and the unemployment rate was 7.6 per cent. In June 2009, there were 1,560,100 people claiming jobseeker’s allowance and the claimant unemployment rate was 4.8 per cent.

My Lords, I am sure that the Minister is aware that that increase in the total of 281,000 is the largest since records began in 1971. First, are the Government satisfied that their fiscal stimulus package, announced in the Pre-Budget Report, and their quantitative easing policy are working effectively? Secondly, is there adequate take-up of their schemes to help businesses through bank lending, notably the enterprise finance guarantee and working capital schemes and the capital for enterprise fund?

My Lords, the noble Lord is right to address the figures, because they show the continuing effect of the global recession, from which, of course, we are not immune. In response to his direct questions about UK government action and whether it is having an effect, yes, I believe that it is. There is not just the fiscal stimulus but a whole range of issues: financial support to the banking industry and banking recapitalisation; the Pre-Budget Report fiscal stimulus, helping businesses, consumers and individuals; the home owner mortgage support scheme, with mortgage repossessions now half the rate that they were in previous recessions; 350,000 new apprenticeships; the business finance package, including the items that the noble Lord suggested, which I believe are having an effect; other measures to support the car industry; and extra resources for Jobcentre Plus.

My Lords, is my noble friend aware of the evidence given yesterday by the most recently appointed member of the Monetary Policy Committee of the Bank of England? He said that the measures that have been taken by the United Kingdom Government put us in a better position than either the United States or the eurozone to have our banking system back in good condition to serve the purposes of this country.

My Lords, I am grateful to my noble friend for that question. I was not aware of that evidence, but it seems to me very sound evidence, which I am sure is right.

My Lords, will the Minister confirm that people aged under 25 make up one in five of the workforce but two in five of the people who are unemployed? Is this not a national disaster? Despite the Government’s efforts, what are they going to do to tackle this problem, which is going to grow considerably in the months and years ahead?

My Lords, the Government are committed to ensuring that no young person is permanently disadvantaged by the recession and that all young people are able to maintain their attachment to the labour market and take part in worthwhile activity. That is why not only are we ensuring that the generality of the support system is available for young people, but currently, after six months of unemployment, young people can enter the mandatory New Deal to get extra support. More recently, we have introduced the young person’s guarantee, which is that within the first 12 months of someone under 24 being on JSA they have the guaranteed offer of a job, work-focused training or meaningful activity. I believe that that is the right way to support young people in these challenging times, in contrast to times gone by, when they were just left on the scrapheap.

My Lords, we all enjoy in this House the constant cheeriness of the noble Lord, Lord Tomlinson, but if he thinks that the British banking system is in a good state, he is carrying things rather too far. Unemployment has risen by half during the past six months—that is bad enough—but the number of unemployed lone parents has trebled. Why?

My Lords, that is partly to do with lone parents appearing in the JSA figures rather than in the income support figures, as they did before. That is because of changes to the lone parent obligations. The noble Lord will be aware of the thrust of the reforms in place, which is progressively to move lone parents on to an active benefit. That has in part contributed to those figures.

My Lords, does it not amaze my noble friend that every time the Opposition refer to unemployment, they take no notice of the world recession and act as if the recession was entirely the fault of the Labour Government? They must know as well as we do, but why does he think that they play these games with the House?

My Lords, my noble friend is absolutely right: this is not just a UK phenomenon. If you look at international comparisons, you will see that the UK continues to have one of the highest employment rates in the world—the second-highest rate in the G7 ahead of the US, Japan, France, Germany and Italy—and the highest of all the major EU economies. We also have the second-lowest unemployment rate of all the G7 countries.

My Lords, perhaps I may probe on the question raised by my noble friend on the very high levels of youth unemployment that we are suddenly seeing—the figure is now more than 700,000. In the light of that steep increase, could the Minister let us know how many places will be needed for the young person’s guarantee?

My Lords, it is not just a particular place in particular employment, because the guarantee covers a range of opportunities, including work-focused training, the offer of a job—particularly supported through the future jobs fund—and community activity. A range of different opportunities is on offer. It is a guarantee to all people aged 18 to 24 who have reached the 12-month stage of their claim for JSA and not secured attachment to the labour market.

My Lords, when discussing the unemployment figures, could my noble friend please differentiate between the number of people who are unemployed because they are moving between jobs in the normal course of events and the number of people who are unemployed because they are actually out of a job?

My Lords, my noble friend is right that the labour market is dynamic, which is illustrated by the fact that, although vacancy numbers have fallen back, they were still appearing at an average rate of 429,000 in the three months to June. Although 354,000 people went on to JSA in June, 325,000 came off it, so a lot is happening out there in the market.

My Lords, it must be a first when the noble Lord, Lord Tomlinson, has compared the eurozone adversely with the United Kingdom. In the context of the present world recession, do Her Majesty’s Government take pleasure in the fact that, although we have high unemployment, it is much less than in any country in the European Union and especially any nation in the eurozone?

My Lords, as I said a moment ago, our comparison internationally is still strong, but we do not take great pleasure from that. The fact that any person who wishes to seek employment is unemployed is unacceptable and we should recognise the human tragedy in all this. The fact that we may be doing comparatively better than other countries in the EU is not a source of pleasure; it makes us want to encourage and work with them to take on active labour market policies.