asked the Chancellor of the Exchequer whether he still estimates that a 1 per cent. fall in the exchange rate should cause an increase of l per cent. in the volume of exports of manufacturers and a fall in the volume of imports of manufactures by to ½ per cent.
The figures quoted in the answer given to the hon. Member for Kingston-upon-Thames (Mr. Lamont) on 24th March 1976—[Vol. 908, c. 215] —assumed that all the intial gains in price competitiveness resulting from a devaluation were maintained and that the level of domestic activity remained unchanged. Current estimates of the long-run effect of a 1 per cent. fall in price competitiveness on the volume of manufactured exports have not been revised, while the response of the volume of manufactured imports of taxable income would be about £1,170 million, £2,130 million and £3,850 million respectively. It has been assumed that in the case of a married couple with a wife earning the reduced rate applies also to the earnings of the wife.