§ Mr. MacGregor
The relationship between the exchange rate and the balance of payments is complex. The adjustment in the exchange rate which has occurred in response to the fall in the price of oil has been accompanied by an improvement in competitiveness, which should in time benefit the non-oil current account on condition that the improvement is sustained. This has to be secured by industry's control of its costs, especially unit labour costs. Industry should plan on the basis that we shall maintain a firm exchange rate as we have done before.