§ Mr. Ralph Howellasked the Chancellor of the Exchequer if he will publish figures showing the divergence between national income based on income and on expenditure figures over each of the last 10 years; and to what extent this divergence reflects the growth of the hidden or cash economy.
§ Mr. Peter ReesThe divergence between the expenditure-based and income-based estimates of national income is shown by the residual error. The size of the residual error in the period 1969–78 in absolute terms and as a percentage of the expenditure-based measure of national income is given in the following table:
Neither the size of the residual error nor the year-to-year movement in it can be taken to indicate the extent or growth of the hidden or cash economy.
Residual error* £ million As percentage of expenditure-based measure of national income 1969 -437 -1.2 1970 -349 -0.9 1971 407 0.9 1972 -293 -0.6 1973 727 1.2 1974 1,344 2.0 1975 601 0.7 1976 1,028 1.1 1977 924 0.9 1978 1,201 1.0 *Expenditure-based estimate less income-based estimate.