HC Deb 21 February 1985 vol 73 cc563-4W
48. Mr. Gordon Brown

asked the Chancellor of the Exchequer why unemployment is continuing to rise.

Mr. Peter Rees

Unemployment is still rising because the majority of pay settlements are still too high.

51. Mr. Tony Banks

asked the Chancellor of the Exchequer what assumption he has made of the trend in the level of unemployment in the next year in drawing up his public expenditure plans.

Mr. Peter Rees

In preparing the projections of social security expenditure, it is assumed that unemployment in Great Britain, excluding school leavers, adult students and those temporarily stopped will average 3 million. This is neither a forecast nor a prediction. The actual level of unemployment will depend on developments in the world economy and at home.

56. Mr. Hayes

asked the Chancellor of the Exchequer what evidence he has that tax cuts in isolation will make a significant inroad into unemployment; and if he will make a statement.

Mr. Moore

Tax cuts can be expected to boost employment by reducing pressure on wages and through generally improving incentives and increasing the rewards for enterprise and effort. The effect on wages is generally incorporated in macroeconomic models, including the Treasury's. The other effects are by their nature difficult to quantify.

58. Mr. Cunliffe

asked the Chancellor of the Exchequer if he will explain on what basis the Government Actuary's assumption for unemployment contained in the 1984 Autumn Statement was made.

Mr. Moore

The working assumption used by the Government Actuary in the report referred to in part 3 of the Autumn Statement is that the number of unemployed in Great Britain claiming benefit, excluding school leavers, adult students and persons whose unemployment has temporarily stopped, averages 3 million in both 1984–85 and 1985–86. The assumption for 1984–85 was based on recent trends in the level of unemployment. A flat path was assumed through 1985–86, following the usual convention.

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