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Unemployed Persons

Volume 895: debated on Monday 7 July 1975

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asked the Secretary of State for Social Services if she is able to give an up-to-date broad estimate of the cost to public expenditure of sustaining benefits for 1 million unemployed for one year; and what is her estimate of the tax and insurance contribution loss to national funds from an unemployment rate of this scale and duration.

pursuant to his reply [Official Report, 2nd July 1975; Vol. 894, c. 461], circulated the following information:At current rates of benefit, the benefit costs remain as in the reply to my hon. Friend on 6th February.—[Vol. 885, c.

596–7.] The loss of contribution income, excluding the Treasury supplement to the National Insurance Fund for an extra 1 million unemployed would be about £400 million a year.

On the assumption that the 1 million unemployed would, if working, have received earnings equal to average earnings it is broadly estimated that the loss of income tax from them would be of the order of £600 million. The effect on employers' profits, and hence on the income tax and corporation tax on their profits, has not been taken into account.