^{page 6 note (1)} There is no longer much conflict of evidence about this. After substantial upward revisions to the output figures and smaller downward revisions to the income and expenditure figures, all three estimates, though still differing considerably in their quar terly movements, now point to much the same increase between 1982 and 1983.

^{page 7 note (1)} Previously included in consumers' expenditure on non-dur ables, this is now counted as fixed investment in dwellings. See the September 1984 edition of Economic Trends, pp. 95-99.

^{page 10 note (1)} The figures for past quarters are much higher than those shown in the last Review because of the reclassification in the National Accounts of expenditure on house improvements.

^{page 12 note (1)} Though not necessarily a symmetrical one, since inflation is currently much lower than it was in 1974.

^{page 13 note (1)} We will not know until the results of the Census of Employ ment becomes available in the latter part of next year. The previous practice of showing the basic series alongside the adjusted ‘supple mentary’ series in the Employment Gazette has now been discontinued.

^{page 14 note (1)} This conclusion is supported, at a more detailed industry level, by discussion in chapter III; see, in particular, pp. 40-41.

^{page 17 note (1)} Bank of England Quarterly Bulletin, September 1984.

^{page 18 note (1)} The strike has affected the PSBR in a number of ways, only some of which we are able to quantify. The weekly value of coal output lost has been running at about £75 million on average. To estimate the average weekly cost to the National Coal Board on current account one has to set against this the reduction in its wage bill (£15-20 million) and in its other operating costs: a figure of £40-45 million may be of the right order. To the extent to which the National Coal Board has postponed investment spending, originally planned to total £750 million in 1984/5, there will be some offset on capital account, but we have no hard information on this.

There is a current cost to the Central Electricity Generating Board arising from its greater use of oil, which is more expensive than coal. However, the running down of coal stocks at power stations provides a substantial offset on capital account.

Other ways in which the PSBR will be affected include a loss in tax revenue arising from the lower income and expenditure of miners' households, and additional spending arising from police men working extra overtime.

^{page 20 note (1)} A fuller account of work on which this brief analysis draws is contained in ‘Long-term Public Expenditure Possibilities’, by M. S. Levitt and M. A S. Joyee, NIESR, mimeo.

^{page 20 note (2)} The Next Ten Years: Public Expenditure and Taxation into the 1990s', March 1984, Cmnd 9189.

^{page 20 note (3)} Derived from ‘The Government's Expenditure Plans 1984-85 to 1986-87’ February 1984 Cmnd 9143-1 and II.

^{page 20 note (4)} Cmnd 9189, op. cit.

^{page 22 note (1)} Treating the average rate of all personal taxation as a single instrument, rather than allowing direct and indirect taxes to vary independently of each other, is an important restriction, since it rules out the possibility of reducing inflation by repeated switches from the former to the latter.

^{page 23 note (1)} Employment Gazette, February 1984.

^{page 23 note (2)} Longer-term prospects are perhaps more promising now than they seemed a year ago. The latest Brown Book shows higher long- term reserves. While the estimate of ultimately recoverable reserves from existing discoveries is almost unchanged, the esti mate of undiscovered reserves has risen from 225-2,152 million tonnes in 1983 to 480-3,275 million tonnes in 1984. This rise is concentrated in one sector of the UK Continental shelf—the area between 56°N and 62°N. The 1983 estimate of undiscovered reserves in this region was 200-750 million tonnes; the 1984 esti mate was 450-1,900 million tonnes. This increase is due to a better understanding of the geology of the region resulting from recent exploration.

An important development over the last few years has been the growth of interest in onshore oil fields. The Wytch Farm field is larger than many of the smaller offshore oil discoveries and. if the recent plans of BP (the new operator after the sale by British Gas) are carried out, production should rise to about 2 million tonnes a year by 1987. Another large onshore field recently granted plan ning permission is the Humbly Grove field (near Southampton). It seems increasingly likely that eventually a large onshore discovery will be made.

^{page 23 note (3)} In fact, the rate of growth in the years 1986-9 is remarkably steady. With most exogenous variables projected as smooth trends, the tendency of the model to generate cylees is very damped.

^{page 23 note (4)} On the output estimate, growth will probably average less than ½ per cent between 1980-4. On the average estimate, the figure may be ¾ per cent.

^{page 24 note (1)} The equation predicts a rather more marked acceleration in nominal earnings as unemployment stops rising in the latter part of the period. This produced a rate of growth in real earnings relative to productivity which we considered implausibly high, and a conse quent reduction in the share of profits in national income which we considered implausibly severe.