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ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE: 21.3.93
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JONATHAN DIMBLEBY: Good afternoon and welcome to On The
Record. There was a blip in the statistics last week and the unemployment
figures therefore failed to cross the three million mark as had been expected.
But no-one doubts that the dole queues will get longer and longer in the months
ahead. Facing that grim prospect, the Chancellor used his budget to announce
new measures to help the unemployed and "they aren't piddling", said the
Employment Secretary, Gillian Shephard. In her first extended interview since
joining the Cabinet, I'll be asking her to justify that claim.
The polls show that rising unemployment
now causes more public concern then any other issue. People have long stopped
blaming the unemployed themselves as work shy or feckless or scroungers. It
touches far too many for that. So what can the government do? What is being
done? And is it enough?
****REPORT********
DIMBLEBY: Secretary of State, unemployment is now
nudging three million. It would be a cruel delusion to suppose that it's not
going to go on up, wouldn't it?
GILLIAN SHEPHARD: Well, the Chancellor made quite clear in
his Budget statement, and I never lose an opportunity to repeat the fact that
an improvement in unemployment has to lag the recovery. Everybody knows that
that is the case and, clearly, that is why I was so cautious when we saw a drop
in unemployment last Thursday - welcome as that was.
DIMBLEBY: You would not want people to go away
believing that because there was a drop last Thursday the projections of the
experts who say it's going to be three-plus, three-two-point-five,
three-and-a-half - whatever their projections might be - that those projections
are out of line?
SHEPHARD: Well, I don't actually predict levels of
unemployment, partly because of the experience that we had in the
nineteen-eighties when nobody, but nobody, predicted that between 1987 and 1989
there would be a growth of two-million jobs in the economy. So we don't, we
don't in a Government make predictions but, of course, the Chancellor's seven
wise men made predictions and I noticed that there was a variation between the
two ends of those predictions of eight hundred and fifty thousand, so there's
quite a range of opinion, even amongst the experts.
DIMBLEBY: But they were indeed, however, all over
two million down the road. But we'll come to that a little bit later. Do you
take the view - as some politicians do - that it's the direction that counts.
That if unemployment reaches a plateau Secretaries of State for Employment can
begin to relax because all that people really care about is the trend that may
be beginning to come down?
SHEPHARD: Well, the point is that for every
unemployed person the trend is fairly irrelevant. What unemployed people want
is, first of all, a real job and for that there has to be the right economic
framework in place, with low inflation and low interest rates and
competitiveness in our economy. But what they also need is help while they're
unemployed, so for them, I think, in a sense, the trend is meaningless - it is
important though because of the optimism that a downward trend can engender in
the economy and generally.
DIMBLEBY: Do you, do you also share the view that
is expressed by many that to have unemployment persistently high at this kind
of level for long is not only damaging in the way that you've just described
for the individual, but is also damaging to the social fabric of the nation?
SHEPHARD: Well, it's certainly damaging for
individual people, because it's depressing and demoralising, and it's certainly
wasteful in the economy if you've got skilled people who aren't putting their
skills to use to help the economy - those things are for certain - and if you
see large communities blighted by unemployment, or fear of unemployment, then
clearly that can't be a good thing.
But what one should never forget is that
two out of three people actually do leave the register - the claimant register
- within six months of becoming unemployed. Now I know that's difficult to
believe when it's you that's facing unemployment, or you that's facing
redundancy, but that is a fact and it's still a fact despite the difficult
times that we're in.
DIMBLEBY: Given that, would you find yourself more
or less in sympathy, however, with what John Smith, Leader of the Labour Party,
has been saying almost as we speak - namely, that the present level of
unemployment IS damaging to the social fabric?
SHEPHARD: We certainly want to see unemployment
come down. The Government takes the matter extremely seriously.
DIMBLEBY: The cause for you of perpetual dismay,
perpetual concern?
SHEPHARD: Well, just let me finish. That is why
we had the measures that we had, for example, in the Autumn Statement, when the
Chancellor boosted manufacturing, boosted exports, brought in the very capital
programmes that were mentioned by my colleague, Rhodes Boyson, and it's also
why we've got a wider range of help for unemployed people now than we've ever
had.
DIMBLEBY: You see, I want to get, I want to get a
sense of - because I think people at home would be really interested in this -
not because you are new to the job necessarily, but do you, Gillian Shephard,
feel their unemployment in here as well as being able to trot out arguments
very effectively about what you're doing. Do you feel it on their behalf?
SHEPHARD: But, of course, nobody who comes into
contact with unemployment people, as I do a lot of the time, could fail to feel
that. But what I also know is that make-work schemes and throwing billions and
billions of pounds at the problem, doesn't help and, what is more, I find that
many unemployed people share exactly that view, which is why they talk about
real jobs.
DIMBLEBY: OK. Now if the concern is there, and if
your predecessors had the concern - I want to look briefly at the context of
the record before looking at what you are particularly doing now. Isn't it odd
that over the last few years, when unemployment was sharply rising, the overall
budget for your department was sharply falling.
SHEPHARD: Well, I have to say that this year my
budget sees a real terms increase. We're spending two point eight billion on
training, which is two and a half times more than we were spending at the
beginning of last decade, and employers themselves are maintaining their
commitment to an investment in training - twenty-billion or so - despite,
again, the very difficult times that we're in. We've actually got a real
increase.
DIMBLEBY: Yes, which we will come to. My question
to you, as you I'm sure interpreted was, wasn't it odd that when it was rising
before this real increase - unemployment - the budget was actually falling.
That's a strange demonstration of concern, isn't it?
SHEPHARD: One of the reasons that the budget was
slightly reduced was that the money was being spent in someone else's budget.
As you know, my budget provides help for young people through youth training -
young people of sixteen to eighteen - and we're seeing a very welcome increase
in the numbers of young people staying on at school and college and, therefore,
a reduction in the numbers of those young people who require training through
youth training. So while there's been an increase in the spending on, say,
further eduction and on schools, I have needed less in my budget.
DIMBLEBY: But Secretary of State, you're not
trying to tell me, I'm sure, that now a third - until this moment - a third
less was being spent on unemployment, on the unemployed, than was being spent
in real terms at the last peak when it was at three million, that that has all
been accounted for by the fact that more people are staying on for higher
education, are you? You would not try that on?
SHEPHARD: Quite a good deal of it is accounted for
by the fact that we have far more young people being paid for in full time
education and further education.
DIMBLEBY: And the rest, and the rest?
SHEPHARD: What we're also spending is a very great
deal more than any government has ever spent before on training and we are also
demanding of TECs, who deliver that training, ever more effective and cost
effective measures and a greater attention to the way that they spend that
money and I think that since when unemployed people cease to be unemployed and
become taxpayers that is something they would welcome.
DIMBLEBY: Let's have a look against that
background of declining spending and the ways that you described and what you
have just described as your real increase at the programmes on which you are
now going to spend that money, take the Community Action Programme. You hope
to have sixty thousand if those jobs are taken up, but that's at the margins
isn't it?
SHEPHARD: Don't forget you have got to look at
this in context of the one and a half million measures in employment and
retraining that are just about to come on stream next month. These measures
which were announced in the Budget are of course in addition to that one and a
half million measures and in addition, the other things that the Chancellor did
in the Budget to help small business and so on.
DIMBLEBY: Why limit it at sixty thousand.
SHEPHARD: Well just let me complete this, now the
new measures, the hundred thousand new measures which were announced in the
Budget are not only innovative and rather different from the one and half
million measures we already have, but they are also an attempt to help
unemployed people invest in themselves and also for there to be an investment
in the economy in unemployed people and in society....
DIMBLEBY: ...this is new....
SHEPHARD: ..when the period of unemployment is over.
Now if you look at Community Action it actually gives unemployed people the
chance to volunteer, it's a voluntary programme, to work with a voluntary
organisation, it might be NACRO, it might be the National Trust, for
three days of a week, the other two days will be spent in active job search.
Now, at the end of the period of unemployment when the person comes off the
register having found a job, not only will he or she be able to look at the
work that they did while they are in Community Action, but also they will be
enriched, I mean they will actually have a better CV to offer to employers as a
result, so it's an investment.
DIMBLEBY: Now you're going to have to, with great
respect, we've got a lot to get through, you are going to have to elegantly
summarise what you're saying a touch more briefly if you'd be kind enough so
that we can get through a lot of material. Let me put the question to you, why
limit it to sixty thousand if there are more than sixty thousand who want to
take it up, would you expand it?
SHEPHARD: Because there are already other
opportunities....
DIMBLEBY: ...which aren't so good, which aren't so
good by your own account.
SHEPHARD: There are other opporunities which are
available....
DIMBLEBY: ...hang on a second, you said, you said,
this is a new approach and it's a much better approach than what they...all
your predecessors have been doing, you then say but I can only offer it to
sixty thousand, there are what three hundred thousand on Community Action
Programmes five, six years ago.
SHEPHARD: With respect I said it was a different
approach, I didn't say it was a better approach and some approaches suit some
individuals, other approaches suit others and that is precisely why I am
against all embracing workfare schemes, which attempt to deal with all three
million unemployed people as if they were the same, I hope that was elegant
enough.
DIMBLEBY: It was very elegant indeed but I want to
press you a bit more on the next one which is the learning for work scheme,
doubtless a good scheme and I can't imagine people saying what a terrible idea
it is that people should be able to learn the skills that they might need to
get them back into work on the training schemes that we outlined in that film,
why, again I ask you though, why a limit on this of thirty thousand?
SHEPHARD: Well we want actually to see how this is
going to work. It will be targeted on people who by the time most of the
courses start will have been unemployed for a year, and it avoids any muddling
about with the existing 21 hour rule it's specifically for people who have
been unemployed for a year and we want to test it out, we want to see how it
works and again, it will represent an investment, an investment in the person
who will then be able to use those enhanced skills in the economy, so an
investment in the economy too.
DIMBLEBY: But it doesn't do much for the morale of
someone who is longterm unemployed and happens to be number thirty one thousand
on the list?
SHEPHARD: Don't forget that unemployed people can
already study while unemployed as long as they keep to the 21 hour rule,
these are set....
DIMBLEBY: ....you are supposing, this..I'm sorry, you
must be suggesting that this option is a better option than the other option
otherwise you wouldn't have proposed it?
SHEPHARD: I am suggesting that it is again a
different option...
DIMBLEBY: ...not better...
SHEPHARD: A different option which will enable us
to look at how it works, to build on its success....
DIMBLEBY: ..alright then because I don't want to
quibble with the point, let's say that there are numbers of people who say not
only is this different but in our judgement it's better and we like it. Are
you ready to expand it or are you held back by the Treasury?
SHEPHARD: If we find that these measures work
better for unemployed people and indeed, as investments in the economy, then
certainly what I would look at is reviewing what we're already doing and
perhaps switching from some of those ways of helping unemployed people into
these new ways.
DIMBLEBY: Well you should have been trumpeting it
then instead of having me push it out of you, what you're saying is if these
things work, I want to see more of them, you should be proud of that not half
ashamed of it.
SHEPHARD: I am hardly ashamed of them, but what I
also don't know yet - because they haven't started - is how they're going to
work and, above all things, when you are looking at help for unemployed people,
what you want is measures that work, because they've had enough knocks already.
Now one of the strengths about the one and a half million measures that we
already have - which you're I think trying equally elegantly, to make me
rubbish - is that we really know they work. Half the people going to job clubs
come out with a job. We know that the job interview guarantee scheme really
works. We know that our measures work. Now what we want to see is if the new
measures are as valuable as I actually think they're going to be.
DIMBLEBY: You've got a pilot scheme - your
work-start pilot scheme - what makes it a pilot?
SHEPHARD: It's a pilot because we haven't actually
tried this approach in England and Wales before. There is a rather similar
sort of scheme which has been operating in Scotland since 1982. But what makes
it a pilot is that there are going to be four schemes and two are going to be
run by the Employment Service and two by TECs. Two are going to concentrate
on people who've been unemployed for more than two years, and two on people
who've been unemployed for more than four years, so there's rather a lot of
test situations there.
DIMBLEBY: How long are you testing for?
SHEPHARD: For a year. We shall certainly have one
in London; I suspect we shall have one in the North-East because of levels of
unemployment there; and the other two will go to areas where they're expecting
to have quite a profound change in their local economies. I have to say I've
been absolutely besieged with requests for TECs and by MPs and others to have
these schemes in their areas.
DIMBLEBY: I bet now that if you find that the
pilots work, will you then make it nationwide so that you don't have to be
unemployed in place "A" - you can be unemployed in place "B", "C", "D" or "E"
as well?
SHEPHARD: Well, there are a lot of lessons to be
learned from these schemes. One of the lessons is that we have to be
absolutely certain that we aren't stopping employers genuinely taking on
unemployed people, simply because under these schemes they can get a subsidy,
and so all of that has got to be very carefully handled. We want to avoid job
substitution and people taking on others simply because they're..simply
because they're subsidised, and also - perhaps I could just add this - the
effect on the unemployed people is the thing that we want to measure most
carefully.
Now, if you've been unemployed for four
years, and some of the people in the pilots are going to be in that category,
you will have taken quite a bashing on your confidence, your ability levels,
you may feel have been diminished, and we want to measure the effect that these
schemes have on unemployed people as well. There's a lot of studying to go
on.
DIMBLEBY: So the long-term unemployed should
NOT, because of the difficulties that there might be in this - not least that
people will shed labour, or not take on other unemployed - should NOT expect
that this kind of scheme is going to go very far beyond the pilot, in terms of
numbers. You've got a thousand people, you've got a million long-term
unemployed - what kind of proportion would you like to, or could you believe,
it might reach of those other nine hundred thousand long-term unemployed.
SHEPHARD: Well, now, at this stage, I can't say,
and I wouldn't want to say, before I have taken the lessons from these pilots,
which I actually think are going to be very interesting and very worthwhile.
DIMBLEBY: The...you see the point about this is
you - in the particular case of this sixty pound subsidy that you will be
paying - the Exchequer actually does quite well out of that because the person
that goes back to work also pays tax and you're not paying benefit. It costs
the taxpayer at the moment what, something near twenty-four billion pounds if
you take both the loss in tax revenue and the benefit payment. You would think
on the face of it that a bit more of this would actually save the taxpayer a
lot of money as well as getting people back into jobs.
SHEPHARD: Well, the key point is really "on the
face of it", because you do really have to be very careful with these kinds of
schemes that you aren't distorting the labour market, that you aren't
persuading people to take on employees they otherwise wouldn't take on, and so
on. That is the rub, and that's what we've got to look at very carefully.
DIMBLEBY: Now, do these ideas that have come up,
do they come from your Department, or do they come from that Wakeham Committee
that the Prime Minister set up with such fanfare?
SHEPHARD: The Wakeham Committee was extremely
useful because it enabled all of us to look across the board at what
Departments are doing to help unemployed people, and to help unemployment, and
it is very interesting you know that the other Departments between them are
spending something like four billion in all kinds of employment-creating
schemes - the DOE, the DTI and so on - in addition to my own not inconsiderable
budget of four point one billion, so there's a lot going on, and we wanted to
be certain that all ideas had come forward.
DIMBLEBY: Which, which, which of these were yours
and which were these of his that went into the budget?
SHEPHARD: Let's say that we all worked together
and this is what came out at the end.
DIMBLEBY: Has it done its task now, the Wakeham
Committee, or is it still in action?
SHEPHARD: No, the Wakeham Committee has ceased to
be because once we'd identified the options and the priorities that we all
thought were the most worthwhile, and that the Prime Minister could approve,
then, of course, it's over to me.
DIMBLEBY: So you're in charge again?
SHEPHARD: Over to me - I was always in charge,
but not of the Wakeham Committee, since John Wakeham chaired it.
DIMBLEBY: Have you got any more ideas up your
sleeve which you are going to bring forward, or have we now got it and let's
see how these work and see where we go from here?
SHEPHASRD: Well, let me just mention one other
scheme which actually your excellent film omitted. You said there were four
measures announced by the Chancellor and you left one out, which was TEC
Challenge, a twenty-five million project whereby we're asking TEC to come
forward with bids for excellent ideas for job creation, for economic
re-generation, for helping unemployed people in their own areas, and I believe
that the TECs will be very enthusiastic about bidding for this money and ideas
will certainly come out of that. I have many more ideas.
DIMBLEBY: You see, if you look at the position
that you face, with all these schemes that you've elaborated just now, you
help, you help over and above the other things that are being done, with
three million people unemployed, you help something like a hundred thousand
people. Let me suggest to you that for most people the fact that a hundred
thousand are going to receive extra help, with unemployment rising as it is, is
still to act at the margins, and you offer them nothing more than "we'll see
how all these things work and we may or may not expand them".
SHEPHARD: Well, as I said when we began the
programme, these have got to be seen in the context of a number of other
things. First, of course, the fact that we have one and a half million ways
of helping unemployed people back into work, second, that we do now have in
place the right economic framework for the recovery and third, not only the
measures in the Autumn Statement but also in the Budget, which the Chancellor
brought forward specifically to help business, that is to say employers.
DIMBLEBY: But we're talking about a situation now
where with the best will in the world, with the prospects of growth at the most
optimistic, you are going to have to face, not only upto the next election but
up until the end of the century by the seven wise men and all other
predictions, unemployment at two million plus, you don't descent from that
judgement do you?
SHEPHARD: I don't make any predictions about
unemployment and again, as I said earlier, that is precisely because nobody
predicted the rundown in unemployment that there was at the end of the 1980s.
DIMBLEBY: Well then let me just put that point
back to you, you will acknowledge, because the evidence is there in black and
white, that unemployment since the last peak through until last year, the last
peak being '86, '87 when it topped three million, has remained on average at
two point six million and that was during a period which included four plus per
cent growth as a result of the, in part, as a result of the Lawson credit boom.
So it would be profoundly misleading to suppose that it isn't going to be
something like that again can it?
SHEPHARD: Well don't forget that we have more
people actually in our working population, and don't forget that we
actually....
DIMBLEBY: ...well that's no comfort to those who are
out of work...
SHEPHARD: ...don't forget that we actually have one
point three million more jobs still in our economy than we had in 1984. We
have a larger working population, nevertheless, I don't predict levels of
unemployment for precisely the reasons that I gave you, but it has to be said
that unemployment is a problem that is besetting all major industrialised
countries.
DIMBLEBY: OK, but the reason why I am looking at
this is because the problem of the longterm unmployed, you will accept the
figure of average two point six million over that period of unemployment
despite that large growth, wouldn't you, that's not an argument between anyone.
SHEPHARD: It isn't an argument save that one
mustn't ignore the job creation that went on in the late Eighties and the fact
that Britain's job creation in the late Eighties was faster than in any of the
other major industrialised economies.
DIMBLEBY: Yes you have to set that against the
position..1979 and '80 before that, we can always play late Eighties games,
during that moment as you rightly have agreed, two point six million average
has been the level of unemployment and whatever the job creation that occurred
during that period, you would agree with me, I presume, that growth rates of
the kind that came around at the end of the Eighties as a result of the credit
boom, would be undesirable.
SHEPHARD: We certainly don't want to go back into
boom and bust, we want a steady sustainable growth because that is the only way
we can ensure a lasting improvement in employment.
DIMBLEBY: Now if you don't want to go back into
what you describe as boom and bust, and you have levels of unemployment over
three million, then you have to be acting as Secretary of State if you are, as
I am sure you are, responsibly concerned about this on the assumption that
you've got to help the longterm unemployed for what is a very longterm?
SHEPHARD: I don't accept your predictions and
again I say precisely because people got it so wrong in the late Eighties, we
want steady sustainable growth, we want real jobs, we want business to feel
confident that it can take people one, but we also need...
DIMBLEBY: ...I don't wish to...
SHEPHARD: ...just let me finish...
DIMBLEBY: ...sorry...
SHEPHARD: ...we also need good investing ways of
helping people who are unemployed and that is why we have this huge package of
measures to help people back into work and why we have these new measures which
may show us better ways of helping people while they are unemployed.
DIMBLEBY: One more thought on this however, it
would be daft of voters to presume that they can get more jobs this time than
last time if you have lower growth, as you say we need to have than last time,
that would be stark staring bonkers to use a phrase of one of the previous
luminaries of your Party.
SHEPHARD: What is clear is that there are changes
in the labour market, that is very obvious and I think that one of my jobs as
Secretary of State for employment is also to help prepare for more part-time,
more flexible working, more job sharing and looking at the labour market that
is going to take us upto the turn of the century.
DIMBLEBY: Secretary of State for employment, thank
you.
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