To ask the Chancellor of the Exchequer what estimate he has made of the (a) effect on UK public spending and (b) yield to the Exchequer which would result from an increase in the UK employment rate of five per cent.; and if he will make a statement. (101288)

To estimate the effects of a five per cent. increase in the UK employment rate would require a wide range of additional auxiliary assumptions to be specified such as, for example, the cause of the increase, the response of fiscal and monetary policy makers and any movements in the sterling exchange rate.

Therefore, such costings could be done only at disproportionate cost.

However, generally an increase in the employment rate would be associated with lower spending on social security payments and higher revenue yields.