HC Deb 10 April 1978 vol 947 cc321-2W
Mr. David Price

asked the Chancellor of the Exchequer what is his current estimate of the proportion of total costs that is represented by wages and salaries in both the economy as a whole and in manufacturing industry.

Mr. Denzil Davies

Over the whole economy, wages and salaries—including forces' pay—represented 63.5 per cent. of gross domestic product at factor cost in 1976 and 61.4 per cent. n 1977. Wages and salaries in manufacturing industry represented 74.2 per cent. of the industry's contribution to the gross domestic product in 1976; a corresponding figure for 1977 is not yet available.

An alternative measure of the contribution of wages and salaries to total costs over the whole economy is obtained by relating wages and salaries to total final expenditure at market prices—that is, all domestic expenditure plus exports. This measure takes account in total costs of the contributions of imports, taxes on expenditure and subsidies. Salaries and wages represented 41.4 per cent. of total final expenditure in 1977. For manufacturing industry, total costs consist of purchases of goods and services from industries outside manufacturing, imports, indirect taxes—less subsidies—paid by the industry, labour costs and profits. This measure can only be derived from detailed input/output analysis and the most recent year for which this analysis is available is 1972. In 1972 salaries and wages in manufacturing industry represented 37 per cent. of the total costs. In the same year total wages and salaries represented 44 per cent. of total final expenditure.