§ Mr. Gould
asked the Prime Minister whether her answer of 19 January, Official Report, c. 273, concerning measures to reduce the real exchange rate, took into account the effect of deflation on turnover; what is her assessment of the effect this has had on unit costs; and if she will publish in the Official Report a table showing the increase in unit labour costs in manufacturing over the past year compared with the increase in unit values of exports of finished manufactures together with the reasons for the differences.
§ The Prime Minister
My previous answer took account of all relevant factors. A striking result of our policies has been a substantial improvement in productivity, which has helped to bring down the annual growth in unit wage costs in manufacturing to only 2½ per cent., a rate considerably below that inherited from the previous Government.
Data on unit labour costs in manufacturing for 1983 are not yet available; but data on wages and salaries per unit of output in manufacturing can be found in table 5 of the Department of Employment's press notice on average earnings, employment, hours and unit wage costs for December 1983. Data on unit values of exports of finished manufactures can be found in table B13 of the Department of Trade and Industry's monthly review of external trade statistics. Divergences between movements in the two series reflect a number of factors, including coverage differences and fluctuations in export profit margins.