§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer (1) what is his estimate of the real exchange rate for sterling, the deutschmark, the United States dollar and the French franc for each year since 1981;
(2) what is his estimate of the real exchange rate for sterling on (a) April 1992, (b) February 1993 and (c) March 1994;
(3) if he will make a statement on the reasons for the current trend in sterling's relative position against the ecu; and if he will set out the difference between sterling's actual position and its previous ERM value in (a) November 1992, (b) February 1993, (c) November 1993 and (d) February 1994;
(4) what was the nominal exchange rate against the ecu in (a) January 1993 and (b) December 1989; what was the corresponding change in the real exchange rate against the ecu based on (i) relative producer prices, (ii) relative export unit values and (iii) the terms of trade for manufactures; and what has been the effect on the output and employment in manufacturing industry;
(5) if he will give the devaluation since September 1992 in real and nominal terms up to February 1994 of (a) the pound sterling, (b) the Italian lira and (c) the Spanish peseta coupled with the changes in the national balance of trade and the rate of inflation of these countries over the same period;
(6) what is the Government's policy on the level to which sterling may fall against the deutschmark in relation to the level agreed when the United Kingdom entered the exchange rate mechanism in October 1990.
§ Mr. NelsonSterling's exchange rate against the Community currencies, the United States dollar and the ecu can be found in the monthly Central Statistical Office's "Financial Statistics" publication. The weighted composition of the ecu is set by the European Commission and can be found in the "Official Journal" No. L189, 4 July 1989. Export and import prices for all Community countries can be found in the monthly International Monetary Fund "International Financial Statistics" publication. Price and trade figures for all Community countries can be found in the monthly Organisation for Economic Co-operation and Development "Main Economic Indicators" publication. Together these data can be used to calculate the information requested. "Main Economic Indicators" also provides output figures, including industrial production, and manufacturing employment data for the United Kingdom.
The real exchange rate is only one factor affecting output and employment in manufacturing industry. It is difficult to isolate the effect of changes in the real exchange rate from that of other factors, such as activity in the United Kingdom's trading partners and barriers to free trade. Manufacturing output in the three months to January was up 2.1 per cent. on the same period a year ago and manufacturing productivity in the three months to January was up 2.9 per cent. on the same period a year ago.
Movements in the exchange rate form part of our continuing assessment of monetary conditions but we have no specific targets for sterling's exchange rate. Since leaving the exchange rate mechanism, sterling's exchange rate has floated. Sterling's exchange rate against the ecu reflects day-to-day market trading in all the Community currencies.