§ Mr. RammellTo ask the Chancellor of the Exchequer what the average annual cost to public funds is in terms of benefits payments and lost revenue of each unemployed person; and how this varies between employment sectors. [147721]
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§ Mr. Andrew SmithThe extent to which unemployment affects Government revenues and spending depends on a number of assumptions, in particular the extent to which unemployment reflects permanent changes in output growth. Treasury research on this is included in "Fiscal policy: public finances and the cycle" (March 1999). As a result of falling levels of unemployment, social security expenditure to the unemployed is forecast to be £4 billion lower, in real terms, in 2000–01 than in 1996–97. DSS ready reckoners estimate that an increase of 100,000 in claimant unemployed would lead to an increase in expenditure of around £500–£550 million a year. Public revenue and spending effects of unemployment in different employment sectors are not available.