UK Economy: Growth, Inflation and Productivity

Earl of Effingham Excerpts

Thursday 29th June 2023 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, I thank the noble Lord, Lord Eatwell, for raising this important debate. Although sentiment was buoyed slightly on Tuesday by the news that shop price inflation fell to 8.4% in June, core inflation remains stubbornly high, suggesting that higher interest rates are here to stay. If the tool of low interest rates will not be available to us for some time to stimulate growth and the outlook is weak, we have to focus on alternative means by which economic growth and productivity can be increased and improved.

I refer to the comment made by Andy Haldane, the former chief economist at the Bank of England, that economic growth improves health, wealth and happiness. I would say that health is wealth. If we have a fully functioning, healthy workforce, our economic growth and productivity numbers will rise dramatically. The number of working days lost in the UK to sickness or injury was an estimated 185 million in 2022, which represents a new record high. We know that the six best doctors in the world are sunshine, air, water, exercise, diet and sleep. We should be placing a huge focus on educating people on this and encouraging them to follow a nationwide gold standard which can only lead to enhanced performance and productivity at work. Education is key. We have all been told to drink lots of water and to sleep well, but the facts are that if an individual drinks two litres of water a day and achieves eight hours of sleep, their cognitive performance can increase by between 10% and 30%. That 10% to 30% improvement in performance will feed into economic growth and productivity.

As for exercise, sport and physical activity can change lives and, most importantly for this debate, sport and physical activity benefit both national and local economies. People will feel good, they will work harder and faster, consumer confidence will be higher and they will spend money. That will result in economic growth and increased productivity. When it comes to diet, having a fit and healthy population is essential to reducing pressure on the NHS and supporting the economy. It is a concerning statistic that obesity currently costs the NHS £6 billion per year, which is set to rise to £10 billion per year by 2050. By trying to solve obesity, we secure a two-pronged attack on reducing the NHS funding requirement and getting people back into the workforce.

None of these problems is easily solved, but they should be achievable with increased levels of local authority participation, education and funding. The House of Lords National Plan for Sport and Recreation Committee’s report recommended the establishment of a new ministerial post with a responsibility for sport, health and well-being. I hope this is something the Government will reconsider.

Department for Transport investment into walking and cycling has huge benefits for public health and the economy, but the active travel budget was recently cut. I ask the Government to consider ring-fencing a certain amount of funding for this investment.

The Government recently introduced new calorie labelling laws under which it is now a legal requirement for large businesses—those with more than 250 employees —to display calorie information on non-prepacked food and soft drinks. It would be helpful if the Government could encourage and help businesses with fewer than 250 employees to do the same, so that we have the full picture wherever we are eating. We need to do more to help people understand healthy eating. At schools, we need more parent communication and cooking demonstrations—whatever we can do to send the message to children and adults alike. This will form the base for their future and the economy’s future growth and productivity.

These are a small number of the ways in which we can tackle this issue. On the basis that we currently do not have the ability to pull the traditional economic levers, we must look for alternatives. I truly believe that improving the health of the nation is a key solution not just for the short term but for the long term and for future generations. Health is wealth. Through it, we will achieve economic growth and increased productivity.