§ Mr. Nicholas Wintertonasked the Chancellor of the Exchequer what is his Department's estimate of the current cost of financing each additional 100,000 unemployed in the United Kingdom including the loss of tax, income and insurance contributions.
§ Mr. Brittan[pursuant to his reply, 13 November 1981, c. 199]: I estimate that an increase of 100,000 in registered unemployment—excluding school leavers—would cost about £165 million in benefits, rent and rate rebates and administrative costs in 1981–82.
There would in addition be losses of income tax, national insurance contributions and national insurance 158W surcharge. Estimates of these losses depend on assumptions, for example, about what the unemployed would have earned had they been in work.
If the loss of employment had occurred in the public sector, the fall in wages and salaries would of itself reduce public expenditure and there may be associated "non-employment" savings.
Thus the overall effect on the balance of public finances would depend on a range of assumptions. There can be no uniquely "right" figure.