Lord Lucasasked Her Majesty's Government:
With reference to the statement in the Labour Party manifesto that "the explicit objective of a Labour Government will be to raise the trend rate of growth", by what method the trend rate of growth is established and what it is now.
§ Lord Simon of HighburyThe trend rate of growth can be defined as the rate which the economy could sustain without leading to rising inflation. Estimating the trend rate of growth cannot be an exact science, but a report by the National Audit Office, published on Thursday 19 June, endorsed an assumption of 2¼ per cent. trend growth per annum as, "broadly consistent with past experience, with the range of published estimates of the long-term rate of growth in the economy, and with assessments of the medium-term prospect for growth".