Unemployment Costs

Oral Answers to Questions – in the House of Commons at 12:00 am on 24th July 1980.

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Photo of Jack Straw Jack Straw Shadow Spokesperson (Treasury) 12:00 am, 24th July 1980

11. Mr. Straw asked the Chancellor of the Exchequer what estimate he makes of the gross cost to the Exchequer of unemployment in the United Kingdom in (a) 1979, and (b) 1980 in terms of national insurance contributions and direct and indirect tax forgone, and social security and other benefits paid out.

Photo of Mr John Biffen Mr John Biffen , Oswestry

The cost of the payment of unemployment and supplementary benefits to unemployed persons in 1979–80 was £1,400 million. It is not possible to make a meaningful estimate of the additional information sought in relation to tax and social security benefits.

Photo of Jack Straw Jack Straw Shadow Spokesperson (Treasury)

Is the Chief Secretary aware that his right hon. Friend the Minister of Agriculture, Fisheries and Food has made a meaningful estimate of those other costs? Is he not aware that he put that cost at £7,000 million, or three-quarters of the public sector borrowing requirement? Given that unemployment now costs three-quarters of the PSBR, and that the cost of maintaining people in work by means of sensible support schemes is less than the cost of throwing them out of work, is not the Chief Secretary aware that one can draw no other conclusion but that the Government are wilfully and unnecessarily forcing people out of work?

Photo of Mr John Biffen Mr John Biffen , Oswestry

No text exists indicating the figure of £7,000 million. That figure has been attributed to my right hon. Friend the Minister of Agriculture by newspaper cuttings alone. It would not be appropriate for the House to proceed on the basis of newspaper cuttings. Our determination is to contest unemployment. To secure a victory over unemployment there is a prerequisite of a victory over inflation.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Given that the Government argue that the level of unemployment is not their fault but that of pay settlements, is the Chief Secretary prepared to predict that if pay settlements in the next round are about 10 per cent. or lower unemployment will not reach 2 million and, indeed will fall next year?

Photo of Mr John Biffen Mr John Biffen , Oswestry

The long and hallowed tradition in the Treasury is that unemployment forecasts are never made. That tradition was followed religiously by the right hon. Member for Leeds, East (Mr. Healey). I intend to follow that tradition.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

Am I right in assuming that the right hon. Gentleman occasionally meets the Minister of Agriculture, Fisheries and Food socially, if not in the Cabinet room? Would he care to ask the Minister to confirm the report that he gave an estimate of £7,000 million as the cost—if I might correct my hon. Friend the Member for Blackburn (Mr. Straw)—not of the current level of unemployment which is 1·9 million, but of 1½ million unemployed? Will the right hon. Gentleman have a word with the Minister and find out what he actually said and say whether he agrees with it?

Photo of Mr John Biffen Mr John Biffen , Oswestry

Since I do not believe in trial by newspaper cutting I would not dream of doing that.