HC Deb 20 May 1980 vol 985 cc129-30W
Mr. Austin Mitchell

asked the Chancellor of the Exchequer why the figures for relative wholesale prices, relative export prices and relative normal unit labour costs given in the Monthly Review of External Trade Statistics differ from those given in the International Monetary Fund Annual Statistics.

Mr. Lawson

The indices of relative export prices and relative wholesale prices calculated by the Department of Trade use different weights from those used in the indices calculated by the IMF. Descriptions of the weights appear in the article " Aspects of United Kingdom trade competitiveness" in the February 1979 issue ofEconomic Trends. The IMF weights are also described in the notes to International Financial Statistics. Revisions to the underlying series can also lead to temporary differences between the indices.

Mr. Austin Mitchell

asked the Chancellor of the Exchequer whether the International Monetary Fund index of relative normal unit labour costs assumes that labour costs rise or fall as capacity working is approached; how the actual capacity working in 1979 for the United Kingdom and the principal industrial countries compares with the capacity assumed in the International Monetary Fund calculations; and what is the correlation in the case of the United Kingdom between this index and the index of relative export prices since 1975.

the reply given to the hon. Member for Birkenhead (Mr. Field), Official Report, 22 May 1979, c. 92, showing the numbers liable to pay income tax and the numbers taken out of tax yearly since 1945.

Mr. Peter Rees

The updated information is as follows:

Mr. Lawson

The IMF index makes no explicit assumptions about labour costs, but assumes that the cyclical movement in average earnings is small compared with that in productivity. The detailed figures used in the calculation of the index are held by the IMF in Washington.

It has not been found necessary to derive the co-efficient of correlation between the index of relative normal unit labour costs and the index of relative export prices, but this may be calculated using the figures published in the Monthly Review of External Trade Statistics.