The chancellor’s ambition to make Britain the richest of all the major economies by 2030 has moved forward with the publication of a 15-point productivity plan.
Launched today in Birmingham by Sajid Javid, secretary of state for business, the plan sets the agenda for government to reverse what it describes as the UK’s long-term productivity problem whilst securing a rise in living standards.
“Productivity is something we’ve been hearing a lot about recently, and that’s because it’s one of the few areas of the economy where Britain is struggling,” Javid said in a speech. “Britain is home to some of the world’s most innovative and dynamic businesses, staffed by incredibly talented, hardworking individuals. Yet our productivity – the rate of output per hour worked – is well below its potential. In stark terms, it now takes a worker in the UK 5 days to produce what his or her counterparts in Germany can deliver in 4.”
The 15-point plan is centred around two angles of execution that aim to encourage long term investment and promote a dynamic economy.
According to the department of business, innovation and skills (BIS), this will be achieved in part by making long-term investments in business by cutting corporation tax and fixing the Annual Investment Allowance at £200,000; investing in skills by introducing an apprenticeship levy; and investing in the Northern Powerhouse and supporting infrastructure.
Further measures include investing £6.9bn in the UK’s research infrastructure and developing the UK’s network of Catapult centres for commercialising technology and making changes to planning rules to speed up development on brownfield sites.
Commenting on today’s announcement, Nick Baveystock director general of the Institution of Civil Engineers said: “This is a sound approach to improving the UK’s productivity, with infrastructure – a catalyst for boosting growth, skills and innovation – rightly placed at its heart. Government also articulates well the problems with our infrastructure and barriers to enabling these benefits, and the proposed National Infrastructure Plan for Skills will form a vital piece of the puzzle.
“We now need to see this vision translate into action – shifting things to the next level. While the renewed commitment to many initiatives and policies is welcome – actually achieving the ‘lasting change’ Government aspires to will depend on decisions being made and ultimately, implementation.”
Terry Scuoler, chief executive of EEF added: “For the UK’s productivity performance to go from stumbling to soaring during this parliament we need solid policy foundations to support the efforts of investment-intensive and highly productive sectors – like manufacturing – to thrive and expand. The new administration’s promise of a whole government focus on productivity and boosting the levers of growth is an encouraging step.
“Launching this plan in the Midlands, the business secretary was right to draw attention to how government and industry working together with an industrial strategy can, in part, help our key sectors like automotive become global productivity leaders.”
Full details of the productivity plan can be found at this address: http:/www.gov.uk