The Essential Importance of Improved Productivity

In a new Economic Bulletin, published by the Centre for Policy Studies on Sunday 5th July, Adam Memon and Tim Knox argue that if the Government is to achieve its deficit reduction targets, productivity must grow.

The report shows that:

  • If productivity is very weak, the national debt will rise every year of this Parliament.
  • UK productivity has performed poorly by historical and international comparisons.
  • The performance of productivity has varied across different sectors.
  • The Government must take an all-encompassing approach to tackle the problem.

The Chancellor is expected to release a Productivity Plan alongside the upcoming Emergency Budget. This is welcome because without wide-ranging reforms it is unlikely that the UK will be able to return to pre-crisis productivity growth rates.

The Centre for Policy Studies lists twelve policies we would like the Chancellor to deliver:

1. Liberalise bank licensing

2. Carry out wide ranging programme of tax simplification

3. Simplify and consolidate planning laws 

4. Reform fracking planning applications

5. Reform the North Sea fiscal regime

6. Include EU regulations in the One in Two Out rule 

7. Expand water industry competition 

8. Increase competition in public sector procurement 

9. Introduce National Apprenticeship Qualifications

10. Expand information given by schools on league tables

11. Abolish patent renewal fees, encourage licensing and establish new SME accelerated patents

12. Unleash the Sharing Economy

Tim Knox, Adam Memon - Wednesday, 8th July, 2015