Productivity

Cat Smith Excerpts

Wednesday 17th June 2015 Commons Chamber

[Chris Leslie]

Labour Members have consistently supported proper and sustained capital allowances for business investment. One of the errors in the previous Parliament was that the Chancellor reduced them so rapidly before he then saw the error of his ways and returned them to the level at which they are now. That chopping-and-changing, stop-start approach is anathema to good, proper, long-term business planning.

We would not know it from the Chancellor’s complacency, but UK economic productivity is stuck in the slow lane. According to the Office for National Statistics, the stagnation of productivity growth is “unprecedented” in post-war Britain. Earlier this month, the OECD said that weak labour productivity remains a problem and that

“the sustainability of economic expansion and further progress in living standards rest on boosting productivity growth”.

The Bank of England has emphasised the “extremely and uncharacteristically weak” growth in UK productivity and said that there is still

“great uncertainty about how productivity might evolve”

and how that could affect the economy.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

Why does my hon. Friend think that productivity has been so stagnant for the past three years in particular?

[Chris Leslie]

The evidence is very clear that we have had persistently poor productivity in recent years. I will talk about the impact of Government investment on infrastructure and tackling the skills challenge that we need to address. The issue has been very much kicked into the long grass in recent years, and that is not good enough.