§ Mr. Rookerasked the Prime Minister why site used figures giving the cost per job through increasing infrastructure spending of between £35,000 and £55,000 in her answer of 13 December, Official Report, column 1202; and if she will give the sources she used in quoting such figures.
§ The Prime MinisterThe cost per job created through infrastructure expenditure can vary substantially according to the nature of the spending. The purpose in quoting the range of figures given in my reply to the right hon. Member for Birmingham Sparkbrook (Mr. Hattersley) was to indicate that spending on Government investment schemes could be a very expensive way of reducing unemployment.
The Treasury model simulations suggests that the cost to the PSBR per person taken off the unemployment register might, in the first year, be around £37,000 for local authority housing building; or around £47,000 for central Government investment. Furthermore, the estimated cost per job or per person taken off the unemployment register would rise over time as the increase in employment is eroded by higher interest rates and inflation.