^{note (1) page 4} This similarity does not depend on the base period chosen. The chart would be essentially the same, if the indices, instead of being based on the years 1958 and 1962, were based on the second halves of 1958 and 1962, or on the fourth quarters of 1958 and 1962. (It would certainly not be sensible to choose as a base period the bad winter quarter at the beginning of 1963 : see the graph on the movement of output, 1955-1965, chart 29, page 82.)

^{note (2) page 4} See page 13. The Central Statistical Office is now pro ducing an estimate of national output derived from production figures (Economic Trends, January 1966, page iii).

^{note (1) page 5} This may overstate the fall; the seasonally adjusted figures of ‘other personal income’ dipped in the second quarter in 1963 and 1964 as well as in 1965.

^{note (2) page 5} For a list of the measures, see the ‘Calendar of economic events : 1965’, page 85.

^{note (3) page 5} This assumes that imports of manufactured goods and semi-manufactures were some £100 million lower than they would otherwise have been. The import content of the substitute home production (after allowing for stock reductions) was perhaps £10 million.

^{note (1) page 6} The figure would have been over £60 million higher, if the capital and interest payments on the North American loan had not been deferred. The various measures of the balance of payments deficit are compared in table 2, page 8.

^{note (2) page 6} This was certainly helped by the sale of the British minority holding in the Ford Motor Company, which brought in £131 million. But even if this item is excluded—so long as a ‘normal’ positive balancing item of £70 million is included— there was still a very small positive balance in 1961.

^{note (3) page 6} This is the percentage for total unemployment, including the temporarily stopped.

^{note (1) page 8} Cmnd. 2915.

^{note (1) page 9} What the effects on consumers' expenditure would be, if incomes policy were to have a stronger effect on the movement of prices and money incomes than we have allowed for, depends partly on the scale of the effect, but mostly on the timing. Thus if, over the next 12 months, the rate of increase of both prices and money incomes, especially wages, is moderated in precisely the same degree so that real incomes are much the same as they would otherwise be, then there is no reason to alter the consumers' expenditure forecast. Inasmuch as the moderation worked through to export prices, exports might be somewhat higher than forecast. If the effect on exports were very large, then some further containment of consumer demand might be necessary. But this is a some what remote contingency.

If the moderation of wage increases occurred in advance of the moderation in consumer price increases, real consumers' expenditure would fall, thus accelerating the emergence of ‘room’ in the economy. To the extent that the moderation of wage increases keeps export prices lower than they would otherwise be, some of this room would be filled by larger exports, so that the effect on aggregate demand would be less than on consumer expenditure alone. Vice versa, if the moderation of price increases preceded the moderation of wage increases. The widely held view that the intensification of incomes policy and a ‘tougher’ Budget are direct alternatives seems to be much over-simplified, not to say misleading.

^{note (2) page 9} There are various stockbuilding and continuing substitution effects to be allowed for in calculating this figure : the full-year effect of keeping the surcharge on is probably more than £60 million.