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Volume 959: debated on Monday 4 December 1978

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asked the Chancellor of the Exchequer if he will publish in the Official Report the effects of higher earnings on (a) growth projections and (b) employment projections from the latest Treasury forecast for each I per cent. increase in earnings above the 5 per cent. target; and during what time span he expects these effects to become known.

No. Higher earnings not matched by increases in productivity will result in higher inflation, and lower growth and employment, but the precise relationships, apart from their uncertainty, depend heavily on the assumptions made about monetary policy, exchange rate policy and many other variables.