§ Mr. Austin Mitchell
To ask the Chancellor of the Exchequer what was the rate of inflation in the 10 years ended June 1989 and in the 10 years ended in 1973; and what was(a) the fall in the real exchange rate; (b) the increase in manufacturing output and (c) the rate of investment in manufacturing industry net of capital consumption in these two periods.
§ Mr. Norman Lamont
Most of the figures requested can be obtained directly from the published sources available in the Library.
The relevant retail prices indices are available from the latest issue of Employment Gazette and "Retail Prices Indices 1914–1986". An historical quarterly series for manufacturing output appears in "Economic Trends Annual Supplement" and the most recent figures are given in Economic Trends or alternatively the Central Statistical Office's databank.
Net domestic fixed capital formation in manufacturing is estimated to have averaged £3½ billion a year at constant 1985 prices in the decade to 1973 and minus £¼ billion a year in the decade to the end of 1988. These figures exclude capital goods leased from financial sector lessors. Including leased assets, net domestic capital formation by manufacturing industries averaged +£¼ billion a year in the decade to 1988. Estimates including leased assets for the decade to 1973 are not available. However, leasing was a much less important feature of investment then, so the estimate of an average £3½ billion a year set out above is unlikely to be significantly different. Estimates are available only for calendar years and must be interpreted with some caution. The figures for net capital formation 239W include estimates of capital consumption. Capital consumption is not directly observable and is estimated on the basis of a series of assumptions.
There is no unique way of measuring changes in real exchange rates, but a range of figures is available, for example, in the IMF's "International Financial Statistics" which is in the Library.