HC Deb 05 November 1980 vol 991 c612W
Mr. Austin Mitchell asked

the Prime Minister to what extent she considers that unemployment is caused by excessive wage increases.

The Prime Minister

A number of factors have contributed to the underlying upward trend in unemployment that has been evident in the United Kingdom over the last 15 years. Some of the recent sharp increase is attritutable to excessive wage increases, as well as to the world recession.

I refer the hon. Member to the article in the September issue of the Treasury's economic progress report on "Earnings and Unemployment". This showed that there has been a close correlation in the past between unemployment, on the one hand, and a fast growth in earnings relative to money supply, on the other hand; and the article also described the various ways in which such a rise in earnings leads to higher unemployment.

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