§ Mr. Spearing
asked the Prime Minister if she will set out in the Official Report the basis of, and the calculations relevant to, her statement on 30 October, Official Report, column 697, that one-third of lack of competitiveness of the United Kingdom is due to the value of the £ sterling and two-thirds to pay increases.
§ The Prime Minister
Between the first quarter of 1978 and the second quarter of 1980, unit labour costs in the United Kingdom increased by about 28 per cent. more than those of our competitors before any allowance is made for exchange rate changes. In that period the trade-298W weighted exchange rate rose by about 12 per cent. Thus over this period more than two-thirds of our loss of competitiveness was the result of higher pay increases in the United Kingdom than in other countries.