§ Mr. Austin MitchellTo ask the Prime Minister, further to his letter dated 13 February to the hon. Member for Great Grimsby on the effect of exchange rate policy, what assessment has been made of the effect on pricing out of overseas markets of United Kingdom exports, and the pricing into domestic markets of imports, of increases in the real value of the pound sterling; and if he will publish a table showing the changes in the indices of import and export values of manufactures as a consequence of each quinquennial change in the statistical base.
§ The Prime MinisterThe Government cannot determine the real exchange rate over the medium term. The crucial factor determining competitiveness is the effectiveness of United Kingdom producers in controlling their costs. Value indices of trade in manufacturing are not published.
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§ Mr. Austin MitchellTo ask the Prime Minister (1) further to his letter dated 13 February to the hon. Member for Great Grimsby, whether he will distinguish those periods in the last 25 years in which Her Majesty's Government assess the pound sterling to have been(a) overvalued and (b) undervalued;
(2) if he will give the figures underlying the statement in his letter to the hon. Member for Great Grimsby of 13 February that the central rate at which the pound sterling entered the ERM was close to the pound sterling's average real rate over the previous 25 years.
§ The Prime MinisterI refer the hon. Gentleman to the Treasury bulletin for winter 1990–91 volume 2, issue 1, pages 25–32 which analyses
measures of real exchange rates and competitiveness",in particular chart 4 on page 31 shows the real sterling exchange rate against other ERM countries and the long run average 1966 to 1990.