Public and Private Sector Productivity Trends

Lord Howell of Guildford Excerpts

Thursday 30th October 2025 Lords Chamber

[Lord Livermore (Lab)]

Yes, I absolutely recognise the problem and I agree with 90% of what the noble Baroness said. The only part I disagreed with was when she criticised the Government. I agree: digital adoption and AI adoption will be central to solving the productivity problem. SMEs are vital to that. It is why digital adoption was a key part of our small business strategy. I hope we can work together on this important issue.

[Lord Howell of Guildford (Con)]

My Lords, the period from 1970 to 1990 was a time of rapidly increasing productivity, of rapidly increasing Japanese investment in particular, and of great reduction in trade union restrictive practices, which the Japanese would not put up with. What lessons does he draw from that for today?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his insight from that period. He is absolutely right. It was a time of high productivity; it is a shame that the second Conservative Government after that did not maintain it. We now have to deal with the inheritance from that Government. He is right to say that private sector investment is a key driver of productivity, so the lesson I draw from that period is that we have to encourage greater levels of private sector investment. Under the previous Government, private sector investment fell to the lowest in the whole G7. We have so far welcomed £120 billion in private investment and a further £150 billion during the US state visit last month alone.