LORD PAKENHAMasked Her Majesty's Government whether the Paymaster General was correctly reported as saying, during the Second Reading of the Finance Bill, that since last summer industrial production has risen by "something like one-tenth," allowing for normal seasonal variations; and, if so, whether an explanation can be given as to how this estimate was obtained.
§ THE PAYMASTER GENERAL (LORD CHERWELL)The OFFICIAL REPORT is correct. The index of industrial production for the third quarter of 1952 is 105 and that for the second quarter of 1953 121, an increase of 15 per cent. This increase is, however, in part due to the greater loss resulting from holidays in the earlier period. If allowance is made for this according to the method described in the Bulletin of the London and Cambridge Economic Service for December,1148WA 1952, which contains a useful discussion of the problem of adjusting the index for seasonal variations, the increase works out at just under one-tenth.
Unless the index is corrected for holidays and so on it is difficult to discern the trend of production, especially over a period of less than a year. The following table shows the unadjusted and adjusted figures for the last ten quarters. Naturally, any method of adjustment has its limitations; but the broad movements seem clear. Production remained comparatively stable between the first quarter of 1951 and the first quarter of 1952, fell in the second and third quarters of that year and then recovered markedly during the following nine months. By the second quarter of 1953 production was higher than ever before and, as was stated, something like one-tenth higher than during the summer months; though, as I mentioned in the debate, it would be wrong to make too much of this as there was some leeway to make up.
INDUSTRIAL PRODUCTION INDEX, 1948 = 100 — As published Seasonally adjusted* 1951 I … 118 117 II … 120 117 III … 112 118 IV … 119 117 1952 I … 120 117 II … 113 113 III … 105 111 IV … 118 116 1953 I … 121 118 II (provisional) … 121 121 *According to the method described in the Bulletin of the London and Cambridge Economic Service for December, 1952. NOTE.—Adjustments for the Easter and Whitsun holidays take account of the months in which they fall. Both holidays fell in the second quarter in 1952 and 1953, but in 1951 Easter was in March.
House adjourned at seventeen minutes before ten o'clock.