Economy: Productivity

Lord Haskel Excerpts

Monday 8th June 2015 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what action they will take to increase productivity as compared to that forecast in Table 5b of the Bank of England May inflation report.

[The Commercial Secretary to the Treasury (Lord O'Neill of Gatley) (Con)]

My Lords, productivity is a key challenge for this Parliament and a key focus. That is why, before the Budget, the Chancellor will publish a productivity plan, which will be a plan to make Britain work better.

--- Later in debate ---

[Lord Haskel (Lab)]

My Lords, I welcome the Minister to his first Oral Questions. I also welcome his words, but I think that many noble Lords will agree with me that we have heard these promises before. However, manifestly, they have not worked. Why not? Will the Minister agree with me that they have not worked because they do not understand that productivity involves every aspect of our economic life and beyond—a life which is presently dominated by austerity? So, once again, I ask the Minister whether the Government will demonstrate their commitment to productivity by moving on from a life of austerity to a life of productivity.

[Lord O'Neill of Gatley]

My Lords, as your Lordships can tell, I am not yet very familiar with the exact procedural formalities. I apologise, as I should be. I have been immersed in studying issues to do with productivity for a large part of my adult life. It is dangerous to associate productivity improvements with a so-called focus either on austerity or on some other particularly cyclical fiscal policy stance.

We are living through a moment in time when a very large number of diverse developed countries are all apparently showing a dramatic slowing in measured productivity, whether it be Germany, which is generally regarded as successful and whose measured productivity has been even weaker than ours in the past few years, or the United States, which is frequently regarded as a beacon. In my maiden speech last week, as those of your Lordships who were here would have heard, I highlighted a number of factors that will be focused on. When the Chancellor makes his presentation, I think your Lordships will see that those feature highly in the appropriate steps we plan to implement.