§ Mr. Gouldasked the Chancellor of the Exchequer what improvement in the trade balance in manufactures would result from a 1 per cent. devaluation, calculated on the basis of trade on December 1976 at an annual rate; and how many United Kingdom jobs this would represent at the current rate of value added.
§ Mr. Robert SheldonEstimates of the effects of exchange rate changes on trade and employment incorporate long lags and are subject to wide margins of error. On the assumption that earnings are not changed by the higher domestic price level a depreciation of 1 per cent. could 159W lead in the long run to an improvement in the balance of manufactures equal to about 0.15 per cent. of gross domestic product. The effect on total employment in the long run could be a rise of one-sixth of 1 per cent. of which half would be in manufacturing.
This is a correction to the answer given on 17th February 1977.
January 1976 February 1977 (provisional) Percentage change United Kingdom exports of manufactures, sterling unit value index (OTS basis) (1970 = 100) … … 210.4 268.0 27.4 United Kingdom imports of manufactures, sterling unit value index (OTS basis) (1970 = 100) … … 201.7 257.0 27.4 United Kingdom wholesale price index of manufactures, excluding food (1970 = 100) … … … … 211.9 254.6 20.1
§ Mr. Gouldasked the Chancellor of the Exchequer what is the latest available Index of Competitiveness figure for United Kingdom exports of manufactures; and how this compares with the average figure for 1973, 1974, 1975 and 1976.
§ Mr. Robert SheldonLatest statistics and data for past years on export price competitiveness are shown in table 13 (page 656) of Trade and Industry—11th March 1977—under the heading "Unit Value Index: Ratio of UK to weighted average".