HC Deb 13 May 1985 vol 79 cc1141-2
5. Ms. Clare Short

asked the Chancellor of the Exchequer what is the increased cost to the Treasury in benefits paid and tax and national insurance revenue forgone for every 1 per cent. increase in unemployment.

Mr. Peter Rees

The extra cost of benefits paid from a 1 per cent. increase in the level of unemployment is about £65 million. It is not possible to estimate the revenue forgone.

Ms. Short

Is the right hon. and learned Gentleman aware, or will he admit, that there has been a nine percentage points increase in unmployment since 1979, when his party took office, and that there has been a massive cost to the country as well as to the people involved of keeping on the dole people who want to work? As the Government now claim that we are living with eonomic recovery and prosperity, although there is no decline in unmployment, will they seriously try to spend some of the money on creating essential jobs in the public service rather than on keeping people suffering in unemployment?

Mr. Rees

The hon. Lady has fallen into some error. There is no question of Government policies keeping people in unemployment. She might be aware that the Government are already spending more than £2 billion a year on job creation measures. The House and the hon. Lady will, I hope, be consoled, even if they will not accept the Confederation of British Industry forecast, by the fact that at least 600,000 jobs have been created since March 1983.

Mr. Bellingham

Is my right hon. and learned Friend aware that, between June 1983 and June 1984, an extra 30,000 jobs were created in Norfolk? Does that not show that Norfolk firms are winning the battle to create new jobs and to bring down unmployment?

Mr. Rees

I am interested to hear my hon. Friend's statistic. I am sure that the Government's measures are paying off in Norfolk as they are in other parts of the country. I am glad to congratulate Norfolk's economy on its flexibility in response to our measures.

Mr. Freeson

Is the right hon. and learned Gentleman aware that, contrary to what he said about not keeping people unemployed, if the Government decided to invest about £1 billion a year in various forms of constructive activity, about 30,000 jobs could be created by that expenditure?

Mr. Rees

The right hon. Gentleman's figures are possibly a little suspect, but I hope he will take comfort from the fact that private and public sector investment was running at a record level last year and that that level is likely to be improved on this year.