Income Per Capita

Lord Wrigglesworth Excerpts

Tuesday 14th July 2015 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, I am still learning the practices here, and I am extremely tempted to give a very long answer to that very detailed question. I shall find the appropriate moment do so. Suffice it to say, at the risk of repeating myself, that I think I am right in saying that the very specific attention this document gives to all the factors that are important for productivity has never before been given, including virtually every single topic that the noble Lord mentioned.

[Lord Wrigglesworth (LD)]

My Lords, as the Minister has done so much work on this subject, can he tell the House which he thinks comes first: higher pay or higher productivity?

[Lord O'Neill of Gatley]

My Lords, there is considerable debate in leading academic circles about causation, as I am sure many Members of this House are aware. Historically the conventional belief has been that higher productivity will lead to higher wages. Due to the length of time during which this country and many others have shown signs of weak productivity and wages there is growing evidence, which has obviously influenced the choice of policy, that deliberately trying to raise wages for the less well off may result in a boost to productivity, as the ONS estimated in its independent analysis of this measure when it was announced last week.