§ 59. Mr. Newensasked the Chancellor of the Exchequer what means are used to estimate the full social cost to the community of supporting an unemployed person and his or her dependants.
§ Mr. Joel BarnettEstimates can be made of some of the costs directly associated with unemployment, such as benefit payments, on reasonable assumptions about benefit entitlement, and so on. The economic cost of unemployment to the community as a whole is the loss of output involved. There are also important social and human costs to consider, but these cannot be quantified.
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§ Mr. Newensasked the Chancellor of the Exchequer (1) if he will estimate the total cost to the communtiy of the number of unemployed at the present time in terms of welfare benefits, loss of tax revenue and all additional items taken into account over a full year;
(2) if he will estimate the total cost to the community of 1 million unemployed in terms of welfare benefits, loss of tax revenue and all additional items taken into account, over a full year.
§ Mr. Joel BarnettChanges in the level of unemployment and economic activity affect many kinds of revenue and expenditure. It is impossible to give a global figure without a detailed simulation of the economy at different levels of un-employment. Even then the result would depend on particular assumptions, for example, about the policy measures taken in order to change the level of activity.
Estimates of revenue losses most directly associated with unemployment—taxes on income and expenditure of the unemployed themselves and their National Insurance contributions—depend, inter alia, on assumptions about what they would have earned. It is not, therefore, possible to provide a meaningful answer.