Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what assessment they have made of the reasons for the 0.3 per cent improvement in UK productivity over the last decade; and why UK productivity is below that of other comparable countries.

The UK has a longstanding ‘productivity gap’ with its main competitors. This has been exacerbated in recent years by weak productivity growth, commonly referred to as the ‘productivity puzzle’.

The slowdown in UK productivity growth in the last decade can largely be attributed to changes in the finance and manufacturing sectors which saw an outsized fall in their productivity growth. Economic shocks and pressures arising from the Financial Crisis and the Euro Area crisis also had a dampening effect on productivity.

Productivity is the main driver of long-run economic growth. The UK’s ability to improve living standards is almost entirely dependent on its ability to raise productivity. In 2017 the Government published a document on the Industrial Strategy that set out a long-term plan to boost productivity by backing businesses to create good jobs and increase the earning power of people throughout the UK with investment in skills, industries and infrastructure. The Government recently published the Business Productivity Review in response to the Industrial Strategy’s core priority of addressing the UK’s productivity issue.

Furthermore, the Industrial Strategy Council – an independent, non-statutory advisory group comprised of leading men and women from business, academia and civil society – was created to provide impartial and unbiased evaluation of the Government’s progress in delivering the Industrial Strategy. The Council published its success metrics on its website in Autumn 2019.