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Productivity

Volume 597: debated on Tuesday 30 June 2015

Productivity growth ultimately comes from business and the hard-working people of Britain, but the Government can, of course, help. That is why my Department is working closely with the Treasury on a forthcoming productivity plan.

The Minister is right about the reliance on individual workers to drive up productivity and about what the investor community can do as well, but he will know that the Office for Budget Responsibility has said that if productivity per worker was 4% higher during this Parliament, that would have a significant effect on reducing the national debt, and correspondingly, that if it was not, the national debt could rise. Does he agree with this rather gloomy assessment and, if so, what does he think the figures for individual growth per worker will be by the end of this Parliament?

The hon. Gentleman will know that the UK has had a long-running productivity challenge, which was made all the worse by Labour’s great recession. An increase in productivity is the surest way to raise real wages and I can assure him that it will be a major focus of this Parliament. We will shortly publish a productivity plan which I hope will reassure him that the Government take this very seriously.

Does the Secretary of State agree that in challenging the productivity problem, we need to address our minds to skills and making sure that we have the appropriate pipeline of skills running through the education system to the businesses that desperately need them?

I congratulate my hon. Friend on becoming Chair of the Education Committee. He is right to talk about the link between better skills and increased productivity, and I hope that in his new role he can make a valuable contribution to that.

Given that we are five years into the long-term economic plan and regrettably our productivity is 17% lower than the average among G7 economies, with growth in the EU 5% over the same period, why does the Minister believe that productivity will rise during the lifetime of this Parliament, since it fell during the last Parliament?

I welcome the hon. Lady to her place. She is right to point out the challenges of productivity, which have been a long-term challenge for this country. I hope she recognises that over the past five years the previous Government did a huge amount to turn around the economic fortunes of this country. We are the fastest-growing country in the G7, and just today we saw the Office for National Statistics revise growth figures for last year. That means thousands of jobs throughout Britain, including Scotland, making us the jobs factory of Europe.

The Scottish Government, of course, are focused on growing our economy, using our four Is—innovation, internationalisation, investment and inclusion. Will the Minister support the Scottish National party call for a change to remove the sudden decrease in the investment allowance from £500,000 down to £25,000 from 1 January 2016 to help continue our success?

If the SNP wants to help business in Scotland, it should look at deregulating much more. In many of the areas that are devolved to Scotland, whereas the UK Government have been working hard to cut regulation, the Scottish Government have been working hard to boost regulation. Deregulation is one of the best ways to help productivity and growth in Scotland.