§ 15. Mr. Heathcoat-Amoryasked the Chancellor of the Exchequer by what percentage the increase in average wages has exceeded the rate of inflation in the most recent 12-month period for which figures are available.
§ Mr. Peter ReesOver the 12 months to January 1984 the increase in the retail price index was 5.1 per cent., and 1107 the underlying increase in the whole economy average earnings index was about 7.75 per cent. The underlying increase in average earnings has therefore exceeded the rate of inflation by more than about 2.5 per cent. over the year to January.
§ Mr. Heathcoat-AmoryI am grateful to my right hon. and learned Friend for that reply. Does he agree that it is bad news for employment? If average wages continue to increase faster than prices, are not fewer people likely to be employed? Will my right hon. and learned Friend accept the need to moderate the rise in real wages in the interests of easing unemployment? Will he do that by public education and persuasion and by direct action in the public sector?
§ Mr. ReesI accept the conclusion that my hon. Friend draws. The picture, however, is not one of unrelieved gloom. Unit wage costs are not increasing remotely as fast as earnings, because productivity increases have been sustained.