§ Mr. Ridley
asked the Chancellor of the Exchequer whether, further to his reply, Official Report, 7th February, column 514, he will list all the items about which assumptions are needed in order to estimate the relative price effect in 1977–78 and 1978–79.
§ Mr. Joel Barnett
To estimate the relative price effect it is necessary to make assumptions about future relative price movements of various economic categories of public expenditure such as will be shown in volume 2 of Cmnd 6721. Because the movements are measured relative to movements of the GDP deflator, it is not sufficient to make assumptions about the prices of public expenditure alone. An internally consistent set of assumptions about the future movements in prices of both public and private sector expenditure is required.