§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether the reference to labour costs in paragraph 6 of the Treasury press notice of 24 November summarising the economic forecast takes account of the fall in productivity as a result of the rise in overhead sosts as output falls; if not, whether he will explain why he has used this measure exceptionally; and if he will circulate a table in the Official Report showing the corresponding figures for (a) the Treasury index of normalised unit labour costs and (b) the International Monetary Fund index of relative normal unit labour costs, together with the increase in all three series since May 1979 and 1 January 1980 compared with the increase in the real exchange rate.
§ Mr. LawsonFor the part of the question which refers to the effect of a fall in productivity, I refer the hon. Member to the answer I gave him on 19 December 1980. The use of the index of relative normal unit labour costs is not exceptional. On the Treasury index of relative normal unit labour costs, I refer the hon. Member to the answers I gave him on 19 December 1980 and 5 December 1980. The IMF index of relative normal unit labour costs is published inInternational Financial Statistics. The real exchange rate can be defined in relation to a number of different price indices. The IMF index of relative normal unit labour costs is one broad measure of the real exchange rate.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether paragraph 2 of the Treasury press notice of 24 November summarising the economic forecast was intended to imply that the rise in the exchange rate was inevitable; if he will explain which sectors of the economy have got to be adjusted in a major fashion to accommodate the increase in the exchange rate; by how much the sectors in question must be adjusted and over what time scale; and which sectors will gain and which will lose.
§ Mr. LawsonSome of the likely reasons for the rise in the exchange rate were given in paragraph 6 of the Treasury press notice to which the hon. Member refers. There is no satisfactory way of estimating in detail the effects of a rise in the exchange rate on particular sectors of the economy.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will supplement his reference to North Sea oil in paragraph 6 of the Treasury press notice of 24 November summarising the economic forecast by circulating a table in the Official Report showing for the United Kingdom and Holland, respectively, the index of 611W competitiveness based on relative export prices for each year since 1973 and each quarter of this year, together with the corresponding figures for the increase in gross domestic product and in manufacturing output in real terms—all based on 1973=100.
§ Mr. LawsonThe information can be derived from the following sources:
- (i) relative export prices: International Financial Statistics, table of cost and price comparisons for manufacturing;
- (ii) gross domestic product: International Financial Statistics, country data;
- (iii) manufacturing output: OECD, indicators of industrial activity.