asked the Chancellor of the Exchequer what has been the percentage increase in relative normalised unit labour costs between (a) May 1979, (b) the first quarter of 1979 and (c) the second quarter of 1979 and in each case the latest quarter for which published figures are available; if he will give the index numbers for each date; and if he will give the published source of these figures.

[pursuant to his reply, 14 December 1982, c. 64]: This information is first published by the IMF in "International Financial Statistics", for example on page 49 of the November 1982 edition. Table F3 of the "Monthly Review of External Trade Statistics" provides a longer series of data for previous years and quarters.

asked the Chancellor of the Exchequer what was the percentage increase in relative normalised unit labour costs between (a) the first quarter of 1974 and (b) the fourth quarter of 1974 and in both cases (i) the first quarter of 1979 and (ii) May 1979.

[pursuant to his reply, 14 December 1982, c. 64]: The relative normalised unit labour costs index is published every month in table F3 of the "Monthly Review of External Trade Statistics". Quarterly figures for 1974 are available in the Economic Trends Annual Supplement 1982, pages 122–230.

asked the Chancellor of the Exchequer what was the percentage increase in relative normalised unit labour costs between May 1979, or the second quarter of 1979, and the first quarter of 1981.

[pursuant to his reply, 14 December 1982, c. 64]: This information is readily available from table F3 of the "Monthly Review of External Trade Statistics".

asked the Chancellor of the Exchequer what are the advantages and disadvantages of using (a) actual and (b) normalised relative unit labour costs as a measure of United Kingdom competitiveness; and which of these measures is most widely used internationally.

[pursuant to his reply, 14 December 1982, c. 64]: The main advantage of actual relative unit labour costs as a measure of competitiveness is that its calculation is straightforward and involves no judgment about cyclical adjustments. A potential disadvantage is that short-run movements in unit labour costs can be significantly affected by purely cyclical swings in productivity; a measure of relative unit labour costs based on actual productivity will to some extent reflect the different timing of the cycle in different countries. The alternative normalised measure uses estimates of trend productivity in each country to derive normalised—trend—unit labour costs, to provide a measure of underlying competitiveness. Whether this provides a better measure of past changes in competitiveness depends on whether the behaviour of traders reflects underlying cost changes only, or cyclical cost changes as well. In assessing current competitiveness, the choice of measure will also depend on whether recent productivity behaviour has been in line with the past trends on which "normalisation" is based. Where it has not—as is the case at present for the United Kingdom—relative normalised unit labour costs may well prove to be an inaccurate indicator of underlying competitiveness. In such circumstances the measure based on actual productivity probably provides a more reliable guide. Similar arguments will apply to other countries for which actual and normalised cost competitiveness measures are available.