Economy: Productivity

Baroness Kramer Excerpts

Tuesday 12th April 2016 Lords Chamber

[Lord Bridges of Headley]

My noble friend makes an extremely good point. Sir Charles Bean recently completed a review of the UK’s economic statistics, and one of his findings was, as my noble friend said, that if the digital economy had been properly taken into account, economic growth would have been one-third to two-thirds of a percentage point higher over the past decade, with similar implications for productivity. However, I stress that that would not explain the UK’s recent poor performance in comparison with other countries, nor why productivity has worsened since the financial crisis, so we are not complacent.

[Baroness Kramer (LD)]

My Lords, the UK’s poor performance on productivity will surely never improve until we get in place the infrastructure—housing, broadband, power and transport—that we need. Will the Government give up or curb their obsession with the budget surplus, borrow at the current zero-coupon rate available to them, stop faffing around with expensive and reluctant private sector and sovereign fund investors, and actually get spades in the ground on the major projects—Hinkley Point being one example—that are at present all suffering delays?

[Lord Bridges of Headley]

My Lords, we are getting going and cracking on with things. I dispute what the noble Baroness says about having a choice between ditching the projected surplus that my right honourable friend the Chancellor has set out and achieving what we are setting out. They are not mutually exclusive. For example, noble Lords might be interested to know that we have committed to the biggest investment in transport infrastructure in generations, increasing spending by 50% to £61 billion in this Parliament.