Economy: Productivity Measurement

Lord Tyrie Excerpts

Thursday 28th March 2019 Lords Chamber

[Lord Young of Cookham]

The noble Lord is quite right to say that productivity in education and health has gone up. Over the past few years, productivity growth in the public sector, which had been 0.2% for the past 19 years, grew to 1.4% in 2016. We have had six successive years of improving productivity in the public sector, and health and education lead the field. The noble Lord is quite right in his other point about intangible assets. We are putting a lot of work into measuring intangible assets. This has a key impact on productivity, for example, in the information and communications sector and in the science sector. Along with investment in software and R&D, intellectual capital training is also an important intangible. It is one of the most important ones, followed by organisational capital.

[Lord Tyrie (Non-Afl)]

My Lords, I declare a statistically very significant interest as chairman of the Competition and Markets Authority. If productivity and competition levels in the British economy are in decline—and there is a good deal of evidence to support that—it probably follows that competition policy is not robust enough at the moment and needs a shot in the arm, so does the Minister support the proposals designed to achieve that which I sent to Ministers last month?

[Lord Young of Cookham]

The noble Lord, whom I have known for 35 years, brings to your Lordships’ House his ability to propose and then drive through major economic reform. The proposals he refers to are indeed detailed, trenchant and robust, and they will inform the competition policy that the Government are working on. Not only can it benefit consumers by promoting better-quality goods and services at lower prices but it can help the economy by promoting innovation and productivity. The Government welcome his report and will be consulting on the competition review shortly, including his proposals.