§ Mr. Gouldasked the Chancellor of the Exchequer what changes he expects in the present levels of imports and exports of goods and services in the first and second halves of 1978 as a result of the appreciation of the £ sterling.
§ Mr. Denzil DaviesThe impact on imports and exports would depend on the amount of appreciation, if any, of the £ sterling in 1978 and on the response of domestic costs.
§ Mr. Gouldasked the Chancellor of the Exchequer if, on his assumption of average wage settlements of 10 per cent., the United Kingdom will have a margin of price competitiveness which means a 5 per cent. increase in United Kingdom export prices; and what would be the effect on price competitiveness of average wage settlements of 15 per cent. and 20 per cent.
§ Mr. Denzil DaviesThe assumption in the Industry Act forecasts, published on 26th October, was that the annual850W average earnings growth, not wage settlements, would be 10 per cent. The effects of different wage settlements on competitiveness would depend, inter alia, on the response of the exchange rate.
§ Mr. Gouldasked the Chancellor of the Exchequer if he will publish the evidence for his belief that British industry's competitiveness at home and abroad would not be adversely affected by a 5 per cent. devaluation.
§ Mr. Denzil DaviesMy right hon. Friend has always taken the view that a fall in the exchange rate will, other things; being equal, bring about some short-term improvement in competitiveness, as happened in 1976. What would happen in the longer term would depend on the response of domestic costs.
§ Mr. Gouldasked the Chancellor of the Exchequer what forecasts have been made of exports and imports in 1978 on the assumption of lower employment.
§ Mr. Denzil DaviesNone. The response depends on the causes of the lower employment.