My Lords, in the quarter to October 2008, 1,864,000 people were ILO unemployed. In November 2008, 1,071,900 people were claiming jobseeker's allowance.
My Lords, stark and grim as these unemployment figures are—there are now more than 1 million claimants for unemployment benefit—does the Minister accept that these figures, and the figures in coming months, represent a key test of whether the Government's policy of spending out of recession is actually working? That was something, incidentally, that the late Lord Callaghan said was impossible when he encountered recession during his premiership.
My Lords, of course the figures are disappointing, which is why the Government announced today a packet of measures that will help people to gain the right to training and to upgrading their skills to get back into employment as quickly as possible. On the central point, it is absolutely right to seek to stimulate the economy as we have done. The choice is between those who would be active in doing this and those who would do nothing. Of course, we will not have under this comparator the ability to evaluate the effects of the noble Lord's party's policy, which is to do nothing. We do not believe that these figures are the worst; there will be some more to come. Therefore, it is very important that we have active labour market policies. That is why the steps that we have taken on the banking system and in supporting small businesses—through deferrals of the small companies tax rate and dealing with HMRC's flow of tax payments to help the liquidity of small businesses—are so important. That is the right thing to do. The wrong thing to do is to do nothing and let the economy and banking system implode.
My Lords, can my noble friend confirm that there are 600,000 more people at work today than there were when this Government came into office? Is this not a case of our doing all that we can to keep unemployment as low as possible, rather than believing that 3 million unemployed is a price worth paying, as the party opposite believes?
Yes, my Lords. The number of people in work is now more than 2.9 million higher, at 29.4 million. The employment rate is 1.5 percentage points higher than it was in 1997. There are 548,000 fewer people on the claimant count and 188,000 fewer people on the ILO measure of unemployment. Despite all the challenges that we face, we have had 10 years of a successful economy, which has enabled us to start from a higher base than many other countries.
My Lords, the Minister says that he is doing everything that he can to ensure that the employment figures are maintained but, in the light of such worrying unemployment figures, will he explain why it was deemed necessary to spend £12 billion of taxpayers' money on knocking 25p off a Christmas present through VAT and not on ensuring that we preserve people in jobs in this country? If you are not in work, you do not go and buy anything.
My Lords, the noble Lord's question implies that he does not believe that the VAT reduction will have an impact. We do not believe that that is the case. It is just part of the fiscal stimulus that the Government have introduced; bringing forward some of the capital spend has been part of it and supporting small businesses is another part of it, as I have outlined. These policies have just been introduced and, of course, it will take a while for some of them to kick in and have an effect. We believe that they are the right measures to adopt and will improve the situation. Across the world, economies are challenged by the credit crunch and the increase in commodity prices, which collided and hit economies right across the globe.
My Lords, we see now why the noble Lord, Lord Jones, was so reluctant to join the Labour Party. Is the Minister aware that Gordon Brown is on track for an unprecedented double disaster, with the lowest housing starts in this country since 1924, when Ramsay MacDonald was Prime Minister, and, looming up in two years' time, the highest unemployment as percentage of the workforce since Ramsay MacDonald was Prime Minister in the 1930s?
My Lords, the economic crisis that the world faces is the worst since the 1930s. We cannot escape from that, as every other country in the world cannot escape from it. These are simply unprecedented times. What the Government have done by seeking to ensure that the banking system is capitalised properly, with liquidity in that system, is to provide the backdrop to stability, so that we can move forward from where we are. These are unprecedented times and they require unprecedented measures and unprecedented leadership, which is what we have in Gordon Brown.
My Lords, that cannot easily be calibrated. What I can say is that there are in excess of half a million vacancies in the economy. Every working day something like 10,000 job opportunities are reported to Jobcentre Plus. We are dealing with a dynamic situation. This is not just a stock of people who are unemployed; people are moving between jobs, from unemployment into employment and from employment into unemployment. There is a dynamic about this. I cannot specifically answer the question posed by the noble Baroness and I am not sure that it would be easy to do so. If there are data on it, I shall certainly write to her. There are still lots of vacancies in the economy. It is important, therefore, that we are proactive in helping people who have fallen out of work back towards the labour market as quickly as possible.
My Lords, we always enjoy encouragement and support from Benches around your Lordships' House. I think that underlying my noble friend's question is a real point about what alternatives there are. We know the alternative of the Conservatives, which basically is to do nothing. We do not quite know what the prescriptions of the other parties are. We have taken positive action, which I am sure is the right thing to do.
I will, my Lords. We have indeed made viable suggestions. I hope that the Minister will admit that the billions of fiscal stimulus are not yet working and, indeed, according to the Governor of the Bank of England, may never work. Now for my question. The Government have announced a £1.3 billion employment package. Under current rules, while people are claiming unemployment benefit, this cannot be taken up for 18 months. Do the Government intend to reduce this period? If not, this measure will not work either.
My Lords, I am not sure to what 18-month period the noble Lord refers. The £1.3 billion made available in the PBR to the DWP was to help to ensure sufficient capacity in the system over the next two years so that people can be supported. Some of the early support was for those who have been furthest away from the job market. The announcement in the PBR and the additional support given enable the focus to be on the newly unemployed as well and on those in danger of becoming employed, so that, where possible, preventive measures can be taken.