HL Deb 20 February 1986 vol 471 cc718-27

3.36 p.m.

The Secretary of State for Employment (Lord Young of Graffham)

My Lords, with the leave of the House, I will now make a Statement on changes to unemployment figures.

I announced yesterday that at the request of our department's statisticians, and in order to ensure greater accuracy, I have agreed that the compilation and publication of the monthly unemployment statistics will take place some two weeks later than at present. This is not a major change in presentation, but the improved estimates will allow a more complete and accurate picture to be given of the latest labour market developments. I have placed further details in the Library.

My Lords, that is the Statement.

Lord Stoddart of Swindon

My Lords, I should like to thank the noble Lord for his Statement, although I must note that this had to be forced from him by my honourable friend John Prescott, the shadow spokesman on employment matters who, it seems, the noble Lord was unwilling to meet in a face-to-face discussion on BBC "Breakfast Time" this morning. I think that that is altogether unfortunate.

However, why did not the noble Lord make a proper Statement in the first place, instead of attempting to slip the matter through by means of a planted Question for Written Answer? Bearing in mind that we had a Question on employment yesterday, and also a debate in which were mentioned the unemployment figures, may I ask him why he did not give some indication to the House at that stage that this very important change was going to be made?

Such an action shows complete insensitivity, and it would seem that the Government have learned nothing from the Westland affair and BL, where their attempts at a cover-up have led to a lack of trust in them by the public and a catastrophic drop in their support in the country. Indeed, yes, the Paymaster General in the House of Commons said that he was not aware that No. 10 was going to brief the press on this document and, indeed, did not approve of it doing so. Did the noble Lord know that No. 10 was going to brief the press on this matter? If he did know, why did he not tell his deputy in the House of Commons? I think the House is entitled to have an answer to that.

In his Statement, the noble Lord said that this is not a major change; but clearly the Government see the laundering of serious unemployment figures as a means of hiding the grave unemployment crisis which faces the nation. This change is in fact another in a long line of changes in presentation. Perhaps the noble Lord can say whether it is 15, as stated in the Guardian, or eight which he himself admits. If the figures were calculated on the 1979 basis, when Labour left office, the unemployment figure would now be showing 3.8 million instead of 3.4 million, the latest catastrophic figure to be published.

In the document in the Library, which I hope everybody has seen and read, there is a reference to a revision of employment estimates. Can the noble Lord elaborate on this? Can he tell us what it means? What new data does he have in mind? What effect will the proposal to introduce an additional unemployment rate to express unemployment as a proportion of the total labour force, including the self-employed and the armed forces, have? What exactly does it mean and what effect will it have? Will the self-employed figure be a real one or an estimated one? Is the noble Lord aware that his means of calculation—

Several noble Lords

Come on!

Lord Stoddart of Swindon

Oh yes, my Lords, I am coming on. I have one or two more questions yet to ask. This is an important matter and if the noble Lord had come to the House in the first place and had made a Statement, I would not this afternoon have had to repeat my strictures. Is the noble Lord aware that the means of calculation are not in line with international statistics, as stated in the document, since the self-employed are not included in the unemployment statistics? In January 1985, a Tory Member of Parliament asked whether these new arrangements could not be made, and the reply was given that they could not be made because it would not be fair.

No doubt these changes are being made not really for statistical purposes but for political purposes, and indeed these laundered figures are part of the £1 million publicity campaign launched by the Government to brainwash the public into believing that the unemployment crisis is less grave than it really is. What we want the noble Lord to do is to take measures and use his energy to get people back to work, not to produce phoney figures to fool the electorate in the run-up to the next general election.

Baroness Seear

My Lords, from these Benches we would like to thank the Minister for making this brief Statement. I must say that the Secretary of State must be aware of the very great interest taken in this House on all questions concerned with unemployment. The number of Questions and debates that we have had on this subject should have left him in no doubt whatever about that. It therefore seems really extraordinary that he did not find an opportunity to make this Statement to your Lordships' House rather than leaving us to see it in the press. It is a matter of the position of both Houses of Parliament, and too frequently. This is yet another occasion on which the press outside has been given information which should come first to at least one House of Parliament.

Secondly, it seems extraordinary—given, as we know, that there is a highly competent section of statistics inside the Department of Employment—that so many changes have been made. No doubt the noble Lord will be able to tell us, in reply to the question that has already been raised, how frequently there have been changes. It cannot be regarded as good statistical practice that it is necessary so frequently to change the method on which the figures are presented. Is it not possible for the department's statisticians to devise a method for compiling the figures so as to be able to report them to all of us who need to have them?

In addition, this is particularly important because it is not only the absolute figures in which we are interested—appalling and interesting though they are—but it is, of course, the trends. Every time an alteration is made in the way in which figures are compiled, it makes it impossible for people studying these questions to understand what is happening to the trends. Is there any way in which, at least from time to time, the department can produce figures which enable those of us who want to see what has been happening over months and years to be able to trace the development through the figures, which we are now unable to do because of these frequent alterations of method?

Lord Young of Graffham

My Lords, I must confess that it is seldom I ever get angry in your Lordships' House, but I must refute each and every stricture which the noble Lord, Lord Stoddart of Swindon, made a few minutes ago. First, I would say to him that before he makes allegations about my right honourable friend the Paymaster General talking about leaks from No. 10, he should read the record. If he does so, he will find—and I stand open to correction, but I think I am right—that there was no such thing.

Secondly, since he referred to breakfast time television this morning, I have taken the trouble to bring with me a transcript of where, in the course of that programme, the honourable Member of another place, John Prescott, was asked: "If you were Secretary of State and your statisticians came to you, as happened in this case, and advised that it was proper that a change be made, would you not implement this in Government, even though you are aghast about it in Opposition?" His reply was: "I think that is a reasonably justifiable point, and I am quite prepared to accept it."

3.45 p.m.

My Lords, what are we talking about? I think this is a very important point. If the House feels that I owe it an apology, I shall be glad to offer it, but since this was a matter raised by my statisticians and it was going to be the subject of a press release because it was a statistical change (which I will explain in more detail in a moment) and because of the great interest which this House and another place exhibit in unemployment matters, it was decided that perhaps the House should be informed by a Question for Written Answer. And since those who have far greater knowledge than I know it is the habit in both Houses that such business is timed for 3.30 p.m. in the afternoon, it was not possible for me to refer to it in the debate yesterday afternoon, because I had already sat down by that time: otherwise. I would gladly have dealt with it.

Let us examine the nature of the change. The statisticians came to me and said, "We have now decided there is clear evidence that we are over-recording the number of the unemployed, and statistically we wish to change the date." Why are they over-recording it? For the simple reason that the count is taken on a particular day. The books are closed seven days later. They said to me, "In our estimate, some 65,000 people who are still on our books as unemployed are people who went into jobs before the date of the count. They have not told us and if we wait two further weeks they will then have informed us. We think that, with this correction, the over-count will be running at about 10,000." They made the request in the interest of having proper statistics, and we went along with it. I must say that had they come along and said that we were under-recording and that that would have increased the figures, I would still have made the change, but with a heavy heart. I must confess to being human and I am not unhappy about the correct figure being lower than it has appeared.

The noble Lord, Lord Stoddart of Swindon, started to talk about the employment estimates and he asked what changes we are making. I must tell your Lordships that the only way in which we find out the number of those who are self-employed is by having an annual survey called the Labour Force Survey, which at the moment we are checking at quarterly intervals. When these figures come out, we intend to show, in addition to the normal line of estimate, the percentage of those unemployed against not just those in employment, but also the ever-increasing number of those who are self-employed and those in the armed forces. If we look at that figure—the percentage of those out of work as against those in work—then I suspect the percentage will come down to just under 12 per cent. This is not a substitution for the other figure: that is in addition to the other figure. But it will perhaps put the number of unemployed in perspective.

Finally, the noble Lord, Lord Stoddart, referred to a £1 million campaign launched by the Government. My Lords, it cannot be a very effective campaign, because I know of no campaign launched by Government. We are contemplating ways in which we can bring better help to those who have been out of work for some time, but no campaign has yet been launched.

May I now deal with some of the questions put to me by the noble Baroness, Lady Seear. There are two types of alterations to the figures. This alteration is a statistical one, and the statisticians will change back the previous series of figures, so that it is perfectly possible to see them. Another type of change which has happened in the past—and not all the changes have been downwards: two of them have been in an upward direction—has referred to different categories of people who are not recorded as claiming benefit. For example, we included disabled people in benefit. That resulted in an increase. On another occasion, we decided that we would not include in benefit, as a claimant count, those over 60 who are not really intending to work, but who are signing to keep their stamp up-to-date. That second category of change is much more difficult when it comes to working out the trend, because it is a change in population. But I wish to assure your Lordships' House that our statisticians will make the adjustment as a result of this minor change.

Lord Mackie of Benshie

My Lords, I want clarification of the figures that the noble Lord gave. As I understand it, if you wait a fortnight you get a truer picture because people notify the fact that they have a job. Do they also notify the ones who have lost their job in that fortnight?

Lord Young of Graffham

No, my Lords. Let us say, for example, that 1st February is the day on which the count takes place. Up to now we have closed on, say, 7th February. We will now close on 21st February. But it will only refer to those in work or not in work on 1st February. What happens is that people who get jobs some time towards the end of January start on 1st February and do not notify the benefit offices until a week or two later that they are back in work. That is why it does not affect the position. It is a statistical change.

Lord Molloy

My Lords, will the noble Lord accept that this is not merely a matter of the gruesome aspect of unemployment or of statistics? The gruesome truth is that it does not matter in what form the statistics are arrived at. What is beyond any doubt whatsoever is that, year in and year out under this Government, unemployment has increased. While the numbers themselves are increasing, and therefore the consequences for the economy are very serious, will the noble Lord the Minister be prepared to accept that for a family in which the breadwinner has been on the dole for a year or two, and for the youths in our cities who have never had a job, the one fundamental need is to reduce unemployment and not to calculate it with statistics? That is what the Government ought to apply their minds to in the interests of those who are unemployed, and of the economy of our nation.

Lord Young of Graffham

My Lords, what I can assure your Lordships' House about is that the Government are taking all steps open to increase employment which will, in the fullness of time, decrease unemployment. We have to cope with two factors—an increasing workforce and the need to see real jobs arise in the economy—jobs that will last and jobs that will contribute to the wealth of the nation. On both of those points, I believe that the Government are making great progress.

Lord Dean of Beswick

My Lords, will the Minister agree that the Statement itself and the alternative criteria will bring no comfort whatsoever to those people who remain unemployed? If the calculations already announced mean that the figures will benefit by about 50,000 through moving back the period, why does he not move it still further back, when unemployment may disappear altogether statistically?

Lord Young of Graffham

My Lords, this Statement was designed to bring not comfort to the unemployed, but light to the Opposition. It was designed to give the correct number of people who are claiming benefit. That is the sole purpose of the statistics. They are not mine. They are my statisticians'. It was at their request that a change was made in the interests of accuracy. I should have hoped that all sides of your Lordships' House would have welcomed the change and would not have tried to make points out of it.

Lord Chalfont

My Lords, will the Minister accept that there are many people, both in your Lordships' House and in the country, who are becoming somewhat tired of the instant adversarial politics in which any Statement by the Government is the subject of instant and Pavlovian hostility by the Opposition? Will he further accept that if it is indeed true that he declined an invitation to appear on breakfast television to discuss this problem, he is to be congratulated on declining to trivialise a problem which is of enormous importance and which, on that programme, would probably have declined into a punch-up with an Opposition spokesman?

Lord Young of Graffham

My Lords, I am grateful to the noble Lord for his comments. I appeared on that programme. What I declined to do was to have an instant confrontation at that hour of the morning about a matter which, as the honourable gentleman admitted himself, is a point that he agreed with. I did not see the point of doing that. I think that unemployment is a serious enough matter. The causes and cures of it are a matter for debate and we should not trivialise it by discussing mere statistical changes in the figures.

Viscount Trenchard

My Lords, will my noble friend agree that the main reason for British unemployment figures being higher than they otherwise might be today is the policies of Governments thoughout the 'sixties and 'seventies, which allowed us to become ever less competitive, and that the steps the present Government are taking are showing some signs of at last getting us back to creating real gains in our market share at home and abroad?

Lord Young of Graffham

My Lords, I am very grateful for the observations of my noble friend, with whom I entirely agree.

Lord Oram

My Lords, did I understand the Minister in a supplementary answer to say that for a period the figures will be given in parallel—that is, in two series—so that it will be possible, for a period, to make comparisons of the new figures with the old? That sort of thing, I recall, is done, for instance, in relation to cost of living indices. Did I understand the Minister to say that that is being done? If so, when the figures are announced month by month will we have equal publiciity given to the number of unemployed on the new list, as well as on the old list?

Lord Young of Graffham

My Lords, I am grateful to the noble Lord for that question, but in all sincerity I do not think it is my place to announce incorrect figures. The purpose of this change at the request of the statisticians was to reduce an over-recording of unemployment. The changes that I said will be announced in parallel are to show the percentage of those unemployed in the current series and also to include a separate figure—this will not happen until June or July this year onwards—including the self-employed and the armed forces, so that members of the public can have a better idea of the actual percentage of those unemployed compared to those in work.

Baroness Phillips

My Lords, may I ask the Minister this question, just to clear my own sense of sanity? Did I understand him to say that he declined to appear on television, because if it was not him it was someone very much like him, who had to deal with the fact that he had used the word "entertainment" in relation to the figures?

Lord Young of Graffham

My Lords, I appeared on that programme this morning.

Lord Underhill

My Lords, is it not remarkable that we have had changes in the statistical recording of figures, on this occasion and on previous occasions, only since there has been mounting unemployment under this Government? Is that not remarkable to the ordinary person? Should other statisticians be prepared to argue about the comments made by his own statisticians, would the noble Lord be prepared to discuss that matter?

Lord Young of Graffham

My Lords, I have not the slightest doubt that we have had statistical corrections to series of figures produced by Governments since they were first issued. It is not a habit indulged in just by this Government. If you look back at the record, you will find it has been done by all Governments. At a time when figures change for various reasons, and when the methodology changes, there are always corrections.

Lord Diamond

My Lords, notwithstanding what the noble Lord has just said, is he aware that there is in the country a general opinion, which is very unfortunate, and which will be increased by his Statement today, that the Government fiddle the figures when they do not like them? Therefore it is vital for those who want to understand what is really happening—which include the Government and ourselves—to be able to see the trend precisely, to be able to go backwards over a sufficient period whenever there is a change, and not to have a change unless it is vital; but we cannot see at the moment that the present change is in that category. May I ask the noble Lord for clarification, because I am bound to admit that I have not fully understood the purpose of this change, and I dare say that that goes for some others of your Lordships. May I ask him whether he is saying that the level of unemployment in the third week of any month tends to be slightly less than the level of unemployment on the first of that month?

Lord Young of Graffham

My Lords, I believe my Statement to be absolutely clear and, if there is any feeling in the land that the Government are fiddling the figures, it is due far more to the smoke that was thrown up in the questions put by the noble Lord, Lord Stoddart, and by many of the Opposition who have tried to read into this all sorts of disgraceful—if I may use that word—charges. There is no fiddle. If noble Lords do not think that it is vital—I use the word "vital" since that word has already been used—to have accurate statistics, then what comfort would they have from any figures issued by Government?

This is a pure statistical correction. It is a correction which our statisticians tell us will bring down the over-recording of unemployment on the day of the count to a figure nearer the correct one, but which will on most months still represent an over-recording. That is all it is. It is not that in the third week in any month the level is lower. I have no knowledge of what happens to unemployment at the third week of any month. We count it one day a month, and on that day it will now take us three weeks before we finally close the books in order to be sure that on that particular day we have a more accurate record of the count.

4 p.m.

The Earl of Onslow

My Lords, are not the Government being perfectly reasonable in making a simple Statement to make clearer what the exact figure is? People are quicker to claim benefit than they are to say that they do not want it. It is easier to discover people claiming benefit than those who say, "No, we do not want it". Therefore the figures become more accurate; and it is accurate figures that we want in spite of false excitement by certain Members of the Peerage on the opposite side of the House.

Lord Diamond

My Lords, may I ask for clarification? I hope the House will accept that what I am seeking to do it to try to understand what the statisticians are proposing and the advice which has been accepted and therefore for which the Minister is responsible; and I am sure he understands himself. If there is a three-week wait, during that three-week period other people will be coming on to the register—perfectly obviously—and the figures will be increasing in the meantime.

Lord Young of Graffham

My Lords, the noble Lord must not build up an incorrect picture of what I am trying to say. Perhaps I may read out a more formal statement, and I shall read it slowly: The unemployment count relates to a specified date each month. Over-recording occurs when claimants cease to be unemployed before that date, usually because they have a job, but do not immediately tell the unemployment benefit office and are therefore still treated as unemployed. The current one week delay between the count date and the compilation of the statistics allows us to take into account some of the over-count but there is still more. Delaying the compilation a further two weeks means that many more of those back at work will be eliminated from the count. That refers to the date of the count, not to the period afterwards. The size of the problem was only revealed after changes were made in the arrangements for the payment of unemployment benefit in July 1985. The information used to monitor over-recording improved and identified a major gap in previous estimates. The extent of the over-recording has not changed but our perception of it has. By compiling the figures two weeks later we have a more consistent and accurate measure of unemployment without undue delay to the statistics.

Lord Stallard

My Lords, as we accept the noble Lord's anger, will he accept that there is also anger on this side of the House, anger at these almost obsessive attempts by the present Minister since he took office to doctor the figures, to present the problem as being something less serious than it really is? Is he aware that his new presentational approach to every aspect of this situation has not added one single job? In fact the figures for unemployment are increasing. This latest presentational attempt is to take another 55,000 off the total figures, while at the same time the noble Lord intends to increase the figures of the total labour force at the other end by including the self-employed and the armed forces. Such tactics will fool no one outside his immediate environs, and certainly do nothing to enhance either his credibility or that of the Government.

Lord Young of Graffham

My Lords, I must say to the noble Lord that I resent his charge that—I use the noble Lord's words—I "doctor the figures". "Doctor" was the word used—

Lord Stallard

My Lords, I will change it to "massage".

Lord Young of Graffham

Or "massage", either, my Lords.

The purpose of this change is simple. It is really to take out of the count an over-recording that exists at the moment, not brought in by any members of the Government but by the statistical service of the Department of Employment. What I resent is the imputation that we are not concerned about unemployment and are more concerned with doctoring or massaging the figures. Secondly, we are not changing the series which shows the percentage of employed against unemployed, but we are, in the interests of realism to bring home to people the true size of the picture, including the self-employed. If the noble Lord opposite is trying to say to me that the self-employed are not working, he is angering 2.6 million people in our country.

Earl Ferrers

My Lords, have we not gone on long enough with this Statement? Can my noble friend re-confirm that the whole purpose of the Statement was to elicit more accurate information and more accurate statistics, and that it has nothing to do with the state of employment or unemployment to which noble Lords opposite are referring? Will my noble friend not agree that if the purpose of the Statement is to ensure that figures are more accurate than they have otherwise been, that is a good Statement to be made?

Lord Young of Graffham

My Lords, the purpose of this Statement is to throw light on the subject; it has in fact engendered a certain amount of heat. I hope that your Lordships' House can calm down and look at the figures and accept that what we are talking about is the truth.

Lord Hatch of Lusby

My Lords, may I elicit some more accurate information from the noble Lord? Does he agree with his officials that the new system will under-estimate the unemployed in this country according to the criteria laid down by the International Labour Office? Does he agree with the estimate of the unemployment unit that these new figures will omit 500,000 people who are unemployed from the new figures, in contrast to the criteria that were used in 1982? If the noble Lord does agree, are those 500,000 people employed or unemployed? They are all people. Can he tell the House whether he agrees with that figure? Who are these 500,000 people? Are they employed or are they unemployed?

Lord Young of Graffham

My Lords, no, and, no.

Lord Bruce of Donington

My Lords, will the noble Lord inform the House just a little further? In the course of his replies he referred to 2,600,000 self-employed. In the interest of statistical research and accuracy, will he reveal the precise method of the statistical calculation from which that figure of 2.600,000 was derived?

Lord Young of Graffham

Yes, my Lords, it is the annual Labour Force Survey, which is the only body we have at the moment, which is corrected from time to time by the census.

Lord Hatch of Lusby

My Lords, will the noble Lord—

Noble Lords


Viscount Whitelaw

My Lords, I thought it was right in the interests of the House, when there was anxiety particularly on one side of the House, to make sure that although it had gone on for a very long time it was proper to do so. But I really do think that 31 minutes is reasonable time. I would have hoped that the noble Lord who has had one go, and who is not noticeable for his silence in the House, would perhaps consider that on this occasion—in the interests of the whole House, and I am perhaps speaking for the whole House—we have continued for long enough.