§ Mr. Austin Mitchellasked the Secretary of State for Industry, further to his reply dated 31 January giving a breakdown of the cost of iron and steel making, what effect a doubling of labour productivity would have on the price of steel, all other things being equal; and how this compares with the reduction which would be achieved if the real exchange rate fell to the level agreed with the International Monetary Fund in December 1976.
§ Mr. Michael MarshallIf only the BSC's prices and number of employees were variable and all other things, such as average employment costs, other costs, volume of sales and production and losses, remained static, a doubling of labour productivity would result in a 14½ per cent. reduction in the BSC's prices.
It is not possible to quantify the effect of sterling depreciation on the BSC's prices which would depend on the interaction of many factors and the effects on the United Kingdom's economy as a whole.