§ Mr. Ashdown
asked the Chancellor of the Exchequer what, according to his latest estimates and including loss of tax take, direct, indirect and administrative costs, are the relevant annual costs to the exchequer of the average person who is (a) unemployed for a year and (b) on enterprise allowance for a year.
§ Mr. Peter Rees
[pursuant to his reply, 10 July 1984, c. 446]: the latest estimate of the public expnditure cost of the average person unemployed for one year is £1,950. 456W This includes unemployment, supplementary and housing benefits and an allowance for administrative costs. Estimates of losses of national insurance contributions and taxation receipts and other effects depend on a wide range of possible assumptions about the causes and circumstances of unemployment. It is not possible to give a meaningful figure for these effects.
The public expenditure cost of each person receiving enterprise allowance for a year is £2,080. However, some of those who receive allowance would probably not have remained unemployed in any case and some might well displace existing businesses. The size of these two effects is uncertain but together would increase the net cost of removing one person off the register for one year by means of the enterprise allowance.