§ Mr. Sillarsasked the Chancellor of the Exchequer what is his estimate of the annual cost to national funds in the payment of benefits to 100,000, 500,000 and 1 million unemployed persons.
§ Mr. Alec JonesI have been asked to reply.
I assume that my hon. Friend is referring to unemployment benefit and supplementary allowances.
597WThe cost of unemployment benefit in 1975–76, on the assumption that the seasonally-adjusted number of unemployed excluding school leavers, adult students and the temporarily stopped is 650,000, is estimated to be £308 million at the rates of benefit due to come into force in April 1975. If the number of unemployed were 750,000, it is estimated that the additional cost would be £60 million. The additional cost for each additional 100,000 unemployed thereafter would gradually increase so that an additional 500,000 would result in an additional cost of £330 million, and an additional 1 million would probably cost an additional £700 million. There would also be a substantial loss of contribution income to the National Insurance Fund.
It is difficult to estimate the additional cost of supplementary allowances in 1975–76 but this could be of the order of £25 million for the first additional 100,000 unemployed, £105 million for 500,000 and £190 million for 1 million.