Economy: Productivity

Debate between Baroness Burt of Solihull and Lord O'Neill of Gatley

Monday 5th September 2016 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, the decision to leave the EU was the result of a democratic question put to the people of this country—it was the result of that choice. What that means for the future of UK productivity remains to be determined. As I am sure many Members of the House are aware, in the past couple of weeks in particular there has been a somewhat surprising upbeat tone to some of our economic data. Among other things, this raises the possibility that productivity has not slipped any further or as much as many people may have thought.

[Baroness Burt of Solihull (LD)]

My Lords, one of the key drivers of productivity is the need for businesses to feel confident in the long-term prospects for their business and the economy. I am sure the whole House will welcome the news from the purchasing managers index today that the service sector is bouncing back from the disastrous post-Brexit figures. However, as the noble Lord has already mentioned, many businesses remain nervous about what Brexit will mean for them in the longer term. Does the Minister agree that, if companies are to invest in the capital infrastructure, training and recruitment needed to tackle the productivity challenge, they need to see a real strategy for Brexit beyond the Prime Minister’s platitude that “Brexit means Brexit”?

[Lord O'Neill of Gatley]

My Lords, private business needs to feel confident about many things in order to undertake further investment decisions, of which the latter part of what the noble Baroness asked may be one. However, a number of other factors are important. In that regard, it is interesting that the latest evidence on investment is not only slightly more encouraging than was the case last year but perhaps ahead of some expectations.