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Unemployed Persons

Volume 13: debated on Friday 27 November 1981

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asked the Chancellor of the Exchequer what is his latest estimate of the total annual average cost to public funds for each unemployed person; whether that estimate includes revenue from value added tax which would have accrued if such persons had been employed at average wages; and to what extent such average estimated annual cost is higher when the total number of unemployed persons exceeds 1 million, 2 million and 3 million persons, respectively.

I refer the hon. Member to the article "Costing Unemployment" in the February 1981 issue of the Economic Progress Report, and to the answer given to my hon. Friend the Member for Macclesfield (Mr. Winterton) on 18 November.—[Vol. 13, c. 158–59.]The estimates given in the

Economic Progress Report article exclude loss of indirect taxes and other indirect effects which would be associated with a change in the level of unemployment.

The figures take account of the average level of total unemployment in the year to which they relate. 'There is, however, no simple relationship between the level of unemployment and the incremental costs.