§ Mr. Strawasked the Chancellor of the Exchequer how much competitiveness declined since the first quarter of 1979 when measured by relative normalised unit labour costs as compared with relative actual unit labour costs.
§ Mr. BrittanThis information is readily available from table F3 of the "Monthly Review of External Trade Statistics".
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§ Mr. Strawasked the Chancellor of the Exchequer pursuant to his reply to the hon. Member for Blackburn, of 15 December, Official Report, c. 132–33 what assumption was made in his calculation for the period since the second quarter of 1982 of the effect on competitiveness of each percentage point change in the effective exchange rate.
§ Mr. BrittanThe effective exchange rate remained at about the same level as 1982 Q2 until the middle of November. The calculation assumed that the subsequent fall in the exchange rate has not so far increased unit labour costs. This will only continue to be true to the extent that companies contain costs and wage bargainers settle for moderate increases.
§ Mr. Strawasked the Chancellor of the Exchequer, pursuant to the reply of the Chief Secretary to the Treasury on 9 December, Official Report, c. 971, that competitiveness has improved by about 20 per cent. since the beginning of 1981, what part of that is attributable to a fall in sterling's effective exchange rate.
§ Mr. BrittanOf the 20 per cent. improvement in cost competitiveness since 1981 Q1, three quarters reflects the fall in the exchange rate and one quarter is due to the fact that United Kingdom unit labour costs are now rising more slowly than those of our competitors even before exchange rate movements are allowed for.