Asked for a response to the labour market statistics published this morning, the Prime Minister’s Spokesman (PMS) said the figures showed an unwelcome increase in unemployment; they also showed some signs that the labour market was stabilising.
Asked if there was disappointment that the private sector had not filled the gap left by public sector employment, the PMS said clearly firms’ decisions on whether to hire new people were being affected by the general economic outlook, and in particular what was happening in the Eurozone. The Office for Budget Responsibility forecast showed that by 2015 there would be half a million more people in jobs, fewer people on the claimant count and a lower unemployment rate, so there would be an increase in private sector employment over time.
Asked if the Prime Minister thought the employment figures were going in the wrong direction, the PMS said there was bound to be an impact on companies’ decisions to recruit when you looked at what had been happening in the global economy, in particular the Eurozone debt crisis. The PMS said that if you looked at other countries you would see that unemployment had been rising there too. He said the average unemployment rate in the European Union was 9.8 per cent and in the United Stated it was 8.6 per cent (Organisation for Economic Co-operation and Development figures), above the UK figure of 8.3 per cent. The PMS said the UK had a deeper recession than many other countries, but the fact that the UK rate remained below the rate you see in other countries reflected the flexibility of the labour market in the UK.
Asked if the Prime Minister agreed with the Justice Secretary’s comment that youth unemployment was a long term problem, the PMS said we knew that youth unemployment had been rising for some years; it started to increase in 2004, well before the downturn in the economy. The PMS said there were some structural problems that needed to be addressed. For example, we needed to make sure that the people coming out of our school system had the skills so that they could find jobs and secure employment. Youth unemployment did go up in recessions, which was what had happened in this country and elsewhere. The PMS added that youth unemployment in the UK was around the same level as the European Union as a whole, but there were big differences between different countries, the most notable being in Spain, where youth unemployment was nearly 50 per cent.
International Monetary Fund
Asked about reports of 50 billion Euros being given from countries outside the Eurozone to the International Monetary Fund (IMF), the PMS said no decisions had been made and that nothing had changed since the G20 summit in Cannes. We wanted the IMF to be properly resourced so that it could deal with all the problems in the global economy, but we had not made any commitment to increase resources. The PMS said the Prime Minister spoke about this in his statement to Parliament on Monday, when he was very clear about our position.
Asked if the UK would be asked to increase resources to the IMF, the PMS said the Eurozone countries had issued a statement at the end of last week which referred to 200 billion Euros which had spoken about the Eurozone and other countries; but we were very clear that we had not changed our position on this. Put to the PMS that the IMF’s own magazine said that there would be a contribution of £50 billion from the UK, the PMS said the Prime Minister was very clear at the European Council and in the House on Monday; we had made no commitment to contribute.
Asked if the IMF was labouring under a delusion, the PMS said the UK had not signed up to the statement issued by the Eurozone countries late last week. The PMS said we needed to make sure that the IMF was properly resourced, but the message from the G20 was that before that could happen the Eurozone countries needed to do more to deal with the debt crisis. The PMS added that the UK believed the IMF should fulfil its traditional role which was to support countries, not currencies.