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Lord Monkswell: My Lords, I thank the Minister for giving way. The point I was trying to make related to the instability and insecurity of employment in the National Health Service, rather than to a reduction in the figures.
Lord Henley: My Lords, the noble Lord will know that anyone who is properly qualified in the medical world will have few problems in finding a new job should they wish to move round. My figures show a dramatic increase in health activity and come from a booklet referred to by the noble Lord, Lord McCarthy, Labour Market Trends, incorporating the Employment Gazette, about which the noble Lord wrote to me some time ago. He asked whether we could guarantee its continued existence after the merger and I am pleased to say that it is still in existence. Indeed, we all seem to be clutching a copy.
We have a proud tradition in banking and the financial services sector generally in this country. It employs a considerable number of people--920,000, up from 750,000 in the early 1980s. As the noble Lord, Lord McCarthy, made clear, that is down from its peak of a little over 1 million some time around 1990. The figures appear on page S12 of the Employment Gazette. I believe they are perfectly clear and find it surprising that the noble Lord, Lord McCarthy, found them difficult to identify.
Britain's economy is doing very well indeed, despite what one may think when listening to the speeches of noble Lords opposite. I suspect that they were influenced by thoughts of Will Hutton and his so-called "seminal" book. The economy is doing well. Our economic policies are delivering sustainable growth, low inflation and rising prosperity. We are in the fourth year of an economic recovery which is the strongest of any major country in the European Union. Output is nearly 6 per cent. above its previous peak. Growth is steady and strong--2 per cent. this year--and inflation has stayed low. Further, taxes and interest rates have been cut and mortgage rates are the lowest for a generation. Living standards are rising and, with unemployment continuing to fall, more and more people are benefiting. Unemployment was down again last month to a four-year record low. We have growing numbers of successful companies and rising numbers of people in work.
Britain's place as a key financial sector is assured. London is one of the three leading international centres in the world and the largest in Europe. We should remember that, though a predominance of work in the financial services industry is in the South East, it is not only the South East that benefits. Many jobs exist in other parts of the country and many new jobs are appearing throughout the country. One only needs to look at the size of the financial sector in cities such as Leeds and Edinburgh to know how well they are doing.
What sets London apart is the size of its international business. According to the Bank of England, average daily foreign exchange dealings in London are 464 billion dollars--almost 60 per cent. higher than in 1992. London's turnover far exceeds that of New York and Tokyo, with signs that its lead is increasing. Net overseas earnings of the United Kingdom financial sector were a record £20.4 billion in 1994, as the noble Baroness, Lady Turner, assured us. I can add that that is up nearly 30 per cent. on the previous year.
Our strong competitive position has not come easily. It has meant that financial institutions have had to keep up with changes in technology and world markets. The high street has not been immune to that change. It has meant the loss of some jobs just as some jobs were gained, particularly in the 1980s as we saw the size of the sector rise to a little over 1 million from 750,000. It has now dropped to 920,000. But that change could not have been avoided and to try to do so would have meant flying in the face of economic common sense, as my noble friend Lord Stewartby made clear.
The sector is highly competitive on an international scale and to take steps to keep staffing levels artificially high in the short term risks losing more jobs over time. There has obviously been a technology revolution in banking practice. The innovations which have made available 24-hour cash machines, telephone banking and
There has been a revolution in the shopping patterns and the social habits of the population. The days when a bank could get away with opening its doors at 9.30 a.m. and closing them at 3.30 p.m. five days a week are long gone. Customers demand access to their cash 24 hours a day and automatic cash machines are the best way to deliver that service. One should recognise that new technology does not always destroy jobs. Most people would accept that that would be a Luddite view. We know that new technology can in the long term very often create new jobs and with them create new wealth and prosperity.
The dramatic growth in 24-hour telephone banking has untapped a huge latent demand for more flexible banking. The 400 new jobs last year and the 300 to come this year at First Direct in Leeds and the 425 at the Co-operative Bank in Stockport are proof that not all is doom and gloom in the financial sector, as the noble Baroness and some of her colleagues seem to imply. As I said earlier, that also seems to show that not all the new jobs necessarily need to be focused in London and the South East.
For some the transition has been painful. No one likes to hear of people losing their jobs but it is clear that overmanning and over-capacity have been features of the United Kingdom banking in the past. That has been true in the past of all industry and much of the service sector. The stark truth is that for the way we live today there are possibly too many banks and building societies on the high street chasing too little business. They are expensive to run and take up valuable resources--people and capital. It is therefore likely that there will be further job losses, as many of the banks have made clear.
However, as my noble friends Lord Stewartby and Lord Boardman pointed out, that is not to say that the banks themselves are not doing a great deal more to assist in the training of their employees. For example, Barclays Bank is spending some £300 million on training over the next five years. My noble friend Lord Stewartby mentioned the bank's imaginative involvement in work experience. I particularly welcome that as something from which many 16 and 18 year-olds could very much benefit. It is regrettable that that has very often been interpreted by the party opposite as a form of exploitation. There is a real commitment by banks to training their employees and to ensuring suitable opportunities for appropriate career development.
It is much more effective for the banking industry and the economy as a whole for the industry to restructure on sensible lines. In that way we will all benefit. The firms, the industries and the countries which prosper are the ones which see change coming and grasp the opportunities it brings. They are the ones in which new jobs are created as old ones disappear. That is the
Industry is also reliant on a good financial sector. It provides support when it is needed most. That in turn leads to jobs. So it makes no sense just to look at the raw figures for job losses in the banking and finance sectors, or even at the job gains in innovative companies such as Direct Line. To get the full picture one must look at Britain's total industrial performance. As I said earlier, the facts are that the economy is growing healthily, the number of jobs has been rising steadily and unemployment has been falling--and falling now for some 28 months consecutively.
Much was made about the position of the growth in part-time employment. The noble Baroness, Lady Turner, was right to say that part-time employment has increased. In the banking sector it is up by some 2 per cent. However, as my noble friend Lord Boardman made clear, most people who work part-time do so because it suits their work patterns. It is what they particularly want to do. A survey of a year or two ago--I forget exactly when so I cannot cite the reference off-hand--concluded that only 14 per cent. of people who work part time do so because they cannot find a full-time job. There are many people for whom part-time work is the appropriate work because it is appropriate for their individual circumstances.
We should not regret the growth in part-time work. It is one of the reasons why so many women in this country have been able to take on work. It is one of the reasons why there has been a growth in female participation. The noble Baroness, Lady Lockwood, accepts that and now accepts, I think, that the amount of part-time work is higher than in virtually all other EC countries. We would accept, as the noble Baroness made clear, that this change is probably a permanent one. But, as she also made clear, it brings changes to which we have to adapt. I do not accept that it has happened as a means of attempting to reduce costs. Again, as the noble Baroness will know, there has been a considerable narrowing over the years of the differentials between average rates of pay for women and average rates of pay for men. Now there is the narrowest gap ever and I imagine that the trend will continue over the years. I certainly accept that the higher participation in part-time work is one of the strengths of the deregulated labour market in this country and one of those of which we ought to be proud.
In the fact that we are seeing unemployment coming down, we are certainly bucking the European trend. In France, the unemployment total has just passed 3 million. In Italy, unemployment is rocketing, and young people in particular are suffering badly. Even in Germany, unemployment is also rising fast. I rather resent the accusations of the noble Lord, Lord Haskel, and others, that the Government do not do anything to assist. I could, as I have done on a number of occasions, recite the vast number of programmes which my department, the
In passing, perhaps I may say a little, in providing figures in comparison between us and the other labour markets, about the regional variations within this country.
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