⁽¹⁾ A quite significant new item now included in the invest ment forecast is the planned expenditure on ‘Jumbo’ jets this year.

⁽²⁾ Another criticism relates to the price basis of the figures given in the White Paper. 1963 price figures would be more helpful than the 1969 survey prices used there.

⁽¹⁾ See below, pages 72-74.

⁽¹⁾ Such as those, for example, discussed in C. Gillion, ‘Wage-rates, earnings, and wage-drift’, National Institute Economic Review no. 46, November 1968.

⁽²⁾ We have achieved somewhat more satisfactory results by estimating equations relating to the total wage and salary bill rather than to the wage rate and earnings components. But even these equations have tended towards underestimation in the last two years.

⁽¹⁾ See National Institute Economic Review no. 48, May 1969, page 7, for a table setting out the estimated budget effects.

⁽²⁾ Cf. National Institute Economic Review no. 40, May 1967, C. St J. O'Herlihy, G. Fane, K. Gwilliam, G. F. Ray, ‘Long-term forecasts of the demand for cars, selected consumer durables, and energy’.

⁽¹⁾ So the amount ‘added in’ to our ‘normal’ consumption forecast on the grounds of the ‘pent-up demand’ hypothesis has been relatively modest.

⁽²⁾ These are assumed to have a 100 per cent ‘import content’.

⁽³⁾ No allowance has been made in table 1 for any speculative affect associated with the ending of the scheme. Such an effect would influence equally stockbuilding and imports with no consequent repercussions on output.

⁽¹⁾ One factor working in the opposile direction is the fact that the sector most hard-hit last year was building and con struction, an industry in which adjustment of employment requirements to output could normally be expected to be faster than average.

⁽²⁾ There is no government commitment to do otherwise; but the expectation, which is a reasonable one, has been generated that the scheme may be subject to a gradual process of dis mantling rather than outright abolition.

⁽¹⁾ Devaluation may have had some additional effect in reducing expenditures, of course, and the full effect of the removal of the restriction (which we would put at £50 million or more) is not likely to be felt in 1970 as the terms of ‘package holidays’ had largely been fixed before the announcement was made.

⁽²⁾ The arithmetical calculation of the benefits of the ‘terms of trade effect’ overstates the gain to the extent that it arises from a less favourable world trade forecast which in turn influences export prospects in an unfavourable direction.

⁽¹⁾ A review of the medium-term outlook appears on pages 43-46 below.