§ Mr. Ralph Howell
asked the Chancellor of the Exchequer what is the estimated annual cost in 1980–81 at 1980 prices of 2.3 million unemployed in terms of (a) welfare benefits, including allowances and rebates of all kinds, (b) the loss of revenue from income tax and national insurance contributions, (c) the loss of production and (d) the loss of value added tax and other indirect taxes.
§ Mr. Biffen
I refer my hon. Friend to p. 114 of Cmnd. 7841, which states that a variation of 100,000 in unemployed—excluding school leavers, and so on—is estimated to vary benefit costs in 1980–81 by £110 million at 1979 survey prices, which is about £130 million at,, 1980–81 estimated outturn prices. Thus a level of unemployment of 2.3 million or 2.0 million excluding school leavers, would imply expenditure of benefit payments of £2.6 billion at 1980–81 prices. This estimate includes only national insurances and supplementary benefit payments, other than to school leavers. The recently published estimate of national insurance unemployment benefits alone is £1.1 billion in 1980–81, based on an assumption of 1.7 million unemployed, excluding school leavers. Information on other benefits could be provided only at the cost of disproportionate time and effort.
The loss of revenue from income tax and national insurance contributions, the loss of production, and the loss of value added tax and other indirect taxes which is associated with an increase in unemployment depend on 45W the reasons for the change in unemployment and the subsequent development of the economy. In principle it is possible to assert a number of ways in which all the 2.3 million might be employed, but they would all be hypothetical and unrealistic. I regret therefore that I cannot answer parts (b)-(d) of my hon. Friend's question.