HC Deb 28 April 1983 vol 41 cc986-8
11. Mr. Frank Allaun

asked the Chancellor of the Exchequer what is the approximate weekly loss to the Government of having a worker on average earnings unemployed, accounting for unemployment benefit, social security, income tax on earnings, national insurance contributions and other items.

14. Mr. Andrew F. Bennett

asked the Chancellor of the Exchequer what is the most recent estimate of the cost of an extra 10,000 unemployed in terms of benefits paid out and income taxes lost.

Mr. Hayhoe

Additional benefits would depend on the family circumstances of those becoming unemployed. But an extra 10,000 unemployed in 1983–84 would, on average, increase expenditure on benefits and administration by about £18.5 million, or £1,850 per person.

Mr. Allaun

Would it not be better to pay people to work rather than to pay them to stay on the dole? As the average wage is now £145.20 per week and the cost to the Chancellor of an unemployed person is £111 per week, is it not true that for a small sum those unemployed people could be producing houses, education and health services, and re-equipping the industry that this country needs?

Mr. Hayhoe

The position is not as the hon. Gentleman surmises. The figures that he has given for what he would describe as lost revenue are inaccurate, because changes in revenue depend on the economic circumstances in which rising unemployment takes place. There is no way in which a single figure can be given for that.

Mr. Bennett

Why are the Government so coy about telling us the real cost of an unemployed person for the first 12 months? Does it not cost the Government somewhere between £5,000 and £6,000 per year? Would it not be far better to let those people do a useful job of work instead of paying them to be unemployed? Should not the Government now come clean and tell us the real figure instead of trying to pull a veil across it and mislead the House and the country?

Mr. Hayhoe

Contrary to the hon. Gentleman's suggestion, there is no real figure. The only figures that can be produced relate to hypothetical changes in personal taxation based on strictly limited and arbitrary assumptions. There is no genuine, real figure.

Mr. Adley

Bearing in mind the figures given by my hon. Friend and the hon. Member for Salford, East (Mr. Allaun), am I right in assuming that what my hon. Friend said is that the figure of £1,850 compares with the hon. Gentleman's figure of something in excess of £7,000? Is it my hon. Friend's understanding of the position that the TUC would be willing to see people work for £1,850 per year?

Mr. Hayhoe

That is an interesting point. However, I should make it clear that my figure of £1,850 related to additional expenditure on benefits and administration and was an average figure.

Mr. Hoyle

Does the Minister agree that having to spend more than £5,000 a year per person on unemployment benefit and so on represents a condemnation of this Government's economic policies? Before long, the Government will have to answer to the electorate for the disasters that they have brought upon this country.

Mr. Hayhoe

I shall be happy to answer to the electorate at any time that my right hon. Friend the Prime Minister may choose.

Mr. McCrindle

In that context, has my hon. Friend received any representations from Opposition members or trade unions about the possibility of job-sharing?

Mr. Hayhoe

I have not received any representations about that. However they would more properly be made to my right hon. Friend the Secretary of State for Employment.

Mr. Straw

Why is the Minister trying to cover up the true cost of unemployment to the country? If the Manpower Services Commission can estimate that unemployment costs £5,000 per head, why cannot the Government also make such estimates? Is not the truth of the matter that the additional 2 million people that the Government have thrown on to the dole have cost the country £40,000 million, which is well in excess of the £32,000 million that Britain has earned in revenues from the North sea.

Mr. Hayhoe

The Government are not giving an estimate because, as I have said, no genuine reasonable estimate can be given. The hon. Gentleman is trying to get a single snapshot of an essentially dynamic situation. As he should know, that single snapshot would be very misleading.