§ Mr. Sheermanasked the Secretary of State for Employment whether the estimates of the rise in the unit labour costs of various countries given in figure 9 of the White Paper "Employment: The Challenge for the Nation," Cmnd. 9474, have been adjusted to allow the movements in each country's exchange rate; and whether he will publish an index for each of the countries cited showing the rise in unit labour costs in each year since 1974, or the nearest approximation available, taking 1974 as a base date and deriving the index in terms of United States dollars.
§ Mr. Peter BottomleyAs the note to figure 9 of the White Paper "Employment: The Challenge for the Nation" (Cmnd. 9474) makes clear, the data portrayed relate to unit labour costs in local currency terms.
The table gives figures adjusted for exchange rate changes. Although short run movements in exchange rates will affect competitiveness, movements in domestic labour costs are a crucial long run determinant. Over the period since 1974, unit labour costs adjusted for exchange rate changes have risen by more in the United Kingdom 773W (+33 per cent.) than in the United States (+26½ per cent.). They fell in the Federal Republic of Germany (-8½ per cent.) and Japan (-18½ per cent.).
Unit labour costs adjusted for exchange rate changes United Kingdom United States Federal Republic of Germanv Japan 1974 64.7 116.3 98.8 131.8 1975 69.1 104.0 90.7 124.6 1976 63.3 108.7 91.9 123.0 1977 62.4 106.1 96.8 128.6 1978 68.0 98.1 100.8 141.5 1979 81.1 98.0 101.9 118.7 1980 100.0 100.0 100.0 100.0 1981 100.4 112.7 91.0 111.0 1982 94.6 126.3 94.0 97.2 1983 86.2 131.1 93.5 105.1 1984 Q3 86.2 147.0 90.4 107.4 Note: 1980 = 100
Source: International Monetary Fund