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Volume 714: debated on Wednesday 11 November 2009


Asked By

My Lords, I expected that reply, but I thought that the Minister might have taken advantage of this opportunity to welcome today’s figures, because they show a welcome slowdown in the growth of unemployment. However, does the noble Lord share the general view that the outlook for jobs remains pretty grim, especially for young people, one in five of whom is out of work? Is the main problem lack of demand in the economy or lack of confidence to invest and recruit on the part of employers?

Well, my Lords, I am pleased that I did not disappoint the noble Lord in my first response. Like him, I welcome today’s figures. The ONS figures show some progress, the ILO unemployment figure has risen more slowly than expected and there are more people in work in October than previously, so there has been an increase in employment. As for young people, that is an important matter and we do not see the challenges of unemployment having yet been fully dealt with, which is why the investment that the Government are making, particularly to help the young and long-term unemployed, is very important. It was announced today that the Future Jobs Fund has created further jobs, bringing the total of that programme up to 95,000 new jobs in our economy.

My Lords, can I tempt my noble friend to go a little further? There are not just good figures this month; it is the second month in a row when the unemployment figures have shown a trend downwards. Does he therefore welcome the fact that even the television stablemate of the Sun newspaper was referring to the figures today as being good news? This is good news in which we expect everyone to join, rather than continuing the practice of finding the bad news within it.

My Lords, as ever, I agree fully with my noble friend, but we are not out of the woods yet, which is why we continue to need to invest and why the programmes that the Government have put in place and invested in have to remain in place. If we were to remove that funding now, as some—including the party opposite—suggest, that would be the wrong choice for our country.

Does the Minister accept that we must see economic growth of 2 per cent before unemployment starts coming down?

My Lords, given that unemployment tends to lag behind a recovery in the market and that almost 50 per cent of those unemployed are under the age of 26, what measures are being taken to promote youth training?

My Lords, a whole raft of measures has been taken to support young people; we will hear about some of them from my noble friend Lord Mandelson when he makes his Statement shortly. We need to put youth unemployment in context. Although it increased by 15,000 over the last quarter, there has been a 14,000 rise in the number of full-time students. If you look at the total of unemployed under-25 year-olds, which is some 943,000, you see that 267,000 of them are in full-time education. There is a shift in this cohort.

My Lords, does the Minister accept that many people find that the scale of the Government’s response to growing unemployment, particularly growing youth unemployment, has been disappointingly small? Does he further accept that the Government would have been a lot better off spending the £12 billion that they frittered away on the temporary VAT reduction—that particularly wasteful and pointless measure—on putting in place stronger measures to deal with youth unemployment?

No, my Lords, I do not accept that. The fiscal stimulus that the Government promoted has been very important in making sure that families have more money in their budget and that the cash flow of businesses is supported through the deferral of tax payments. Those are just two of the components, quite apart from issues around stabilising the banking system, which is important in giving stability to the macroeconomic framework that needs to underpin the addressing of unemployment. We have made the right policy decisions, in stark contrast to the party opposite, which has always made the wrong policy decisions.

Given the admirably flexible response of industry in this recession in terms of switching over to part-time employment, does the Minister expect a further lag in employment pick-up as this effect unwinds?

My Lords, I said at the start that the Government do not issue unemployment forecasts. A range of different factors goes into creating and addressing unemployment. Clearly, the structure of the job market, with perhaps more flexibility and more part-time working, is a benefit as well as one of the challenges.

My Lords, while these figures are not exactly cause for celebration, would the Minister agree that they represent good news? Would he also agree that unemployment, serious though it is, has never approached the levels reached under the previous Government, when, if my memory serves me right, at least one, and possibly two, members of the party opposite were Ministers?

My Lords, I absolutely agree with my noble friend. There are now something like 29 million people in employment; at the worst of the 1992-94 recession there were just 25 million and during the 1980s recession there were 23.5 million. The unemployment rate now is 7.8 per cent. In 1992-93, it was 10.7 per cent and, in the 1980s, it was, at worst, 11.9 per cent.

My Lords, at the end of today’s Question Time, it may be useful if I draw the attention of the House to some guidance about Questions that came out of a leaders’ group chaired by my noble friend Lady Hilton of Eggardon in 1999. The report concluded:

“If two … Lords rise at once, they should be … ready to give way immediately, rather than provoke a shouting-match, which is undignified and wastes time. If the Leader rises, other Lords should sit down at once”.