Unemployment in the UK

Part of Opposition Day — [18th Allotted Day] – in the House of Commons at 7:45 pm on 7th October 2008.

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions 7:45 pm, 7th October 2008

I beg to move, To leave out from 'House' to end and to add instead thereof:

"notes the global economic challenges that are facing the UK;
congratulates the Government on policies such as Local Employment Partnerships which have helped nearly 40,000 people find work, Pathways to Work which has supported more than 94,000 people off Incapacity Benefit and into work, and the New Deal which has helped 1.97 million people into jobs;
welcomes the policies of this Government which seek to reform the welfare state to give people active support to get back into work as quickly as possible;
and supports rapid action to ensure that where redundancies occur people are given the personalised support they need to return to work, to intensify the activity of the welfare state to ensure no-one is written off and to maintain a strong and flexible labour market.".

I was rather sad to hear the partisan tone adopted by Chris Grayling. This is an important issue for our constituents and I think that it would be better if we debated it in the spirit in which I thought that the hon. Gentleman's leader said that he would approach this economic challenge. That spirit was that we should try to work together to address these issues. I shall try to address the points that the hon. Gentleman made and some of his rather eccentric use of facts. I shall then turn to his proposals and try to explain that all his main points are already Government policy. We are glad that he already agrees with what we are doing on employment and on the insolvency regime.

It is right that we should debate the subject tonight, and I am glad that the hon. Gentleman called the debate. Over the last two days, we have rightly discussed in this Chamber the financial situation and the global economy. All parties agree that there is no way that Britain could not be affected by the international situation. We could not stop the world, even if we wanted to get off. We need to maintain our open economy and to do everything we can to protect people through the current financial and economic situation and to prepare them for the upturn that will come thereafter. That is exactly what the Government are doing.

Our constituents tell us that they know about the drama on Wall street and Threadneedle street, but they want to know what the ripple effect will be on their high streets. The hon. Gentleman said that we should be living in the real world, but that is what we do. Last week, I spent two days in the high street in Kentish Town at the Jobcentre Plus, talking to advisers and to people who have just started to claim. The interesting thing was that there was a steady flow, as there always is, of people signing off benefits, because they have found work, and a flow of people coming in. People asked two questions: first, what is happening in the economy, and secondly, what are the Government doing? I want to talk about both those things and will try to address the points that the hon. Gentleman made.

Let us start with the facts. The latest analysis of the labour market makes it clear that unemployment is rising. The number of people claiming jobseeker's allowance has been going up since the beginning of the year. In the last month, it went up by just over 32,000. Inflows on to jobseeker's allowance are now at 250,000 people compared with 200,000 earlier in the year. The steady flow of people in and out that I mentioned seeing in Kentish Town is reflected in the wider economy. At the same time as 250,000 people were flowing on to the allowance, 216,000 people flowed off in August. That is because we have a strong, flexible labour market that is one of the best in the G7.

The hon. Gentleman tried to make some points about that, but he could not detract from the fact that we have the second highest employment rate in the G7. He cannot detract from the fact that there are 600,000 vacancies in the economy or that 500,000 people start a new job every month. Every time someone loses their job it is a worry, and it is a tragedy if they cannot find the next one. We should all be focusing on exactly what we can do to ensure that people find their next job as fast as they can as well as protecting existing jobs.

Let me correct some of the things that the hon. Gentleman mentioned. He said, for example, that it is not true that employment has been at a record level this year—he quoted an example of that being said earlier this year. Over the past 11 years, the employment rate has been at 74.3 per cent., compared with 71.4 per cent. under the Conservative Government. There has been a significant rise in the employment rate in this country. It is the highest employment level that has ever been achieved in this country. We are coming from a high level and it is therefore wrong for him to say that the economy has not had a successful labour market over the past few years. It is wrong for him to say that 80 per cent. of those jobs have gone to migrants. That figure is simply wrong. The figure is 50 per cent. and 800,000 more UK-born people are in work than there were in 1997. It is wrong of him to say that the inactivity rate is at 20 per cent. That includes students, whose numbers have risen very significantly over the last 11 years, and I thought that that was something that those on the Conservative Front Bench supported. If the number of students is taken out, the inactivity rate has fallen significantly.

It is wrong to say that long-term unemployment has not fallen as, even under the ILO measure that the hon. Gentleman quoted, it has gone from 800,000 to 354,000. It has fallen by more than half, so the figures that he tried to quote were, I am afraid, wrong. In his motion, he states that 5 million people are inactive, but that figure includes carers, people who have been recently bereaved, and parents with children under five. Even he does not want to see them in work. Will he confirm that that 5 million figure includes all those people? Is he saying that all carers should go back into work, or that the 5 million figure is a completely inappropriate way of describing the inactivity rate?

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Tom Knott
Posted on 8 Oct 2008 5:30 pm (Report this annotation)

Employment may be high, but are all these employed people doing jobs that are useful to us, or that we really want done?
How many jobs exist only by Government edict - either new, and not always necessary, public sector jobs or those jobs that exist in the private sector solely to service the plethora of regulations we now have? And how many are employed to spy on and collect transgression taxes from us?
Are they doing jobs that are fulfilling and well rewarded? Or are they so bored senseless that they can't wait to clock off for a night's binge drinking?
Employment is not just about quantity. It's also about quality, both for the employee and for the rest of society. On that measure, we are falling short.