§ 34. Mr. Peter Bottomley
asked the Chancellor of the Exchequer if he will explain the differences in the estimates of the revenue from taxation of unemployment pay made in 1981 and 1982.
§ Mr. Ridley
On 14 May 1981, my hon. and learned Friend the Member for Dover and Deal (Mr. Rees), in reply to the hon. Member for Barking (Miss Richardson), estimated that the yield from bringing into taxation benefits paid to the unemployed would be £370 million in a full year at 1981–82 levels of unemployment, income, tax rates and so on. On 1 March 1982, in reply to the hon. Member for Pontypridd (Mr. John), I estimated that he yield in a full year at 1981–82 levels would be £550 million. The corresponding estimate at 1982–83 levels is £650 million.
The difference between the two estimates at 1981–82 levels results from improved methods of estimation and from revisions to the data on which the estimates are based. Tha major part of the increase arises from the use of new and more detailed information on the earnings of those becoming unemployed and from revised data on the patterns of length of spells of unemployment.