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Lord Henley: My Lords, I am sorry that the noble Lord thinks that the Government are not doing very much. I can list a whole host of initiatives that the Government and the Employment Service have introduced to bring down unemployment. I can assure the noble Lord that long-term unemployment, which is an important figure, is falling and falling, more importantly, as a percentage of the total. It is well below the average of our European colleagues. It is now below 1 million. It is about 862,000. It is down by 218,000 since the peak. It has been down 142,000 in the past year. It is down by 24,000 in the past quarter. It is down in all regions for all ages and for men and women.

Lord Clark of Kempston: My Lords, does my noble friend agree that the success of the economic policy of this Government has resulted in a drop in unemployment of nearly 700,000 since its peak in December 1992? Does he further agree that if the minimum wage or the social chapter were introduced unemployment in this country would be increased? Finally, does he agree that it is rather hypocritical of noble Lords opposite to criticise this Government when their policies would increase unemployment?

Lord Henley: My Lords, my noble friend is absolutely right to draw attention to the dangers of a minimum wage, which we would refuse to contemplate. Similarly, he is right to draw attention to the dangers of the social chapter, which would do much to increase unemployment as would the minimum wage. Our refusal to sign up to either of those, our reforms of the labour market in the early 1980s, which were strongly opposed by the party opposite, and the fact that we keep

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our non-wage labour costs much lower than most of our European competitors have done much to bring down unemployment by 700,000 since its peak.

Lord Dean of Beswick: My Lords, will the Minister explain why yesterday at the United Nations the Prime Minister attempted to have the International Labour Organisation disbanded, bearing in mind that what little protection some low paid workers have in this country rests with that organisation? Is the Minister aware that if the International Labour Organisation is disbanded the one line of protection for some people in the poorest countries which are governed by dictators will be removed? Is that what the Government intend? If it is, why do they not say so?

Lord Henley: My Lords, the best protection for the unemployed is to find them jobs and one will not find them jobs by imposing increased burdens of the kind that the noble Lord and the International Labour Organisation would like on employers.

Baroness Castle of Blackburn: Is it not a fact that unemployment today is about twice what it was in 1979 when the Labour Government left office?

Lord Henley: My Lords, the important thing about unemployment is that it is coming down and has been coming down steadily for 24 months. It has come down much earlier in the recovery from the last recession than any of the pundits in the party opposite ever thought. It came down because of the reforms that we made to the labour market in the early 1980s and for the various other reasons which I expounded earlier. Not least of those is our refusal to touch the minimum wage which the party opposite so much desires.

Baroness Rawlings: My Lords, would the Minister consider extra teaching not only to students but to adults too of a foreign language to widen the chances of people seeking jobs?

Lord Henley: My Lords, any training, skill and qualification always increases the employability of any individual in the labour market. That is one of the principal reasons why my right honourable friend the Prime Minister brought together the Department for Education and the Department of Employment, which was strongly opposed by the party opposite.

Baroness Turner of Camden: My Lords, is the Minister aware that according to his own figures the number of people in training-for-work schemes is 30 per cent. lower than it was this time last year and that the number of starts on training-for-work in Great Britain is also 24 per cent. lower than for the same period last year? Has the Minister any idea why that should be? Further, would he mind telling his noble friend who asked a question in connection with the social chapter that the minimum wage has nothing whatever to do with the social chapter and that it is not part of it?

Lord Henley: My Lords, I do not believe that anyone said that the minimum wage had anything to do with the social chapter. The fact is that the party opposite has signed up to both of them. As regards the number of people in training-for-work, I do not believe that that is important. What is important is the quality of the

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training that we can deliver and the fact that unemployment has been coming down steadily for 24 months—that is long-term unemployment and the whole figure for unemployment—as a result of the policies that we have been pursuing.

Lord Mason of Barnsley: My Lords, that is from the peak of 3 million unemployed. Will the Minister explain to the House why, after the Government's 16 years in office, we have over 2,200,000 persons on the dole?

Lord Henley: My Lords, I am glad that the noble Lord corrected himself and reminded the House that unemployment has come down from 3 million to roughly 2¼ million. The fact is that unemployment has gone up throughout the developed world, in particular in the European Community which has the most appalling record on the creation of jobs. We, though, have seen it come down far earlier and far more strongly than most of our competitors. At the same time, we have seen employment grow far more strongly and we now have virtually the largest percentage of those of working age in employment in Europe.

Lord Mackie of Benshie: My Lords, is the Minister not slightly worried that in this best of all possible worlds that he has been expounding an article in last week's Financial Times showed that our capital investment, for which the fall in unemployment is absolutely necessary, is the lowest in Europe?

Lord Henley: My Lords, the noble Lord is taking the Question slightly beyond what is on the Order Paper. We are dealing with unemployment and with the growth of employment. I have made clear to the House that although unemployment is very high it has fallen far faster and far sooner than anyone predicted and it fell because of the reforms that this Government made to the labour market and the other policies that we have espoused.

Lord Dixon-Smith: My Lords, does my noble friend agree that the economies that are most successful in the general field of employment are also the least regulated?

Lord Henley: My Lords, that too is a point that I have been trying to get over. It is why I stressed the importance of keeping our non-wage labour costs down and why they are far lower than those of most of our European colleagues and pretty low in world terms.

Lord Dormand of Easington: My Lords, is it not significant that none of the Minister's noble friends has referred to long-term unemployment, which is the whole purpose of my Question? Is it not also significant that 216,000 people under the age of 25 have never had a job? The longer one stays out of a job the harder it is to get a job.

Lord Henley: My Lords, I will remind the noble Lord of some figures that I gave earlier. Long-term unemployment is a much lower percentage in this country than elsewhere and it is falling as a percentage of overall unemployment. The noble Lord mentioned the unemployment rate for the under-25s. Perhaps he will look at the over-regulated economies across the Channel and see how high their youth unemployment is.

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The Electricity Industry

2.57 p.m.

Lord Ezra asked Her Majesty's Government:

    Whether, in view of the vertical integration now taking place in the electricity industry in England and Wales as a result of take-overs and mergers, they have abandoned the concept, inherent in the Electricity Act 1989, of transparency as between the generation, transmission and distribution of electricity.

The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, the Government made it clear at privatisation that when their special shares expired the regional electricity companies would be exposed to the disciplines and opportunities of the market, including mergers and acquisitions.

Lord Ezra: My Lords, does the Minister recall that his right honourable friend Mr. Ian Lang recently stated, as reported in the press, that at some stage an accumulation of mergers:

    "may impede the electricity regulator's ability to carry out his duties."?

In view of the fact that more than half of the regional electricity companies have been the subject of mergers or take-overs, and more are in the offing, will the Minister consider that the stage referred to by his right honourable friend has now been reached? Is he aware that on this issue the existing regulator has expressed grave concern on a number of occasions?

Lord Fraser of Carmyllie: My Lords, the existing policy on referrals to the MMC is the policy that has been followed since 1984; namely, that any referrals should be on competition grounds on a case-by-case basis. I believe that to some extent the noble Lord misinterprets what my right honourable friend the President of the Board of Trade said. He indicated that, where consideration was to be given to mergers between the regional electricity companies, there were particular factors to which he would pay attention. Those include the extent to which the regulatory power of the director general might be adversely affected if such a company were subsumed within a larger group; the extent to which there was a loss of comparators; any adverse effects of vertical integration; and the extent to which any of those adverse effects might be remedied by disinvestment. It would not be right for me or for my right honourable friend the President of the Board of Trade to determine that no further mergers were to take place. Each one should be considered on its particular merits.

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