HM Treasury has laid a command paper before Parliament titled “Fixing the foundations: creating a more prosperous nation CM 9098”, setting out a 15-point plan with concrete policy measures for productivity growth in the UK over the next decade.
The UK is set to be the fastest growing G7 economy in both 2014 and 2015. However, while rising employment has been a major source of recent growth in the UK, productivity is as essential an ingredient over the longer term. There has been a slowdown in productivity growth in the UK since the onset of the financial crisis, and there is a large and long-standing productivity gap between the UK and some other leading advanced economies. The Government are committed to boosting productivity growth and narrowing this gap in order to enhance living standards and quality of life in the UK.
Building on measures announced in last week’s Budget that will boost productivity, this plan is built on two pillars: encouraging long-term investment in economic capital, and promoting a dynamic economy. It includes measures to reform the planning system and further education; sharpen incentives to provide excellent teaching in universities and open up higher education to new providers; build stronger trading links with emerging markets; cut red tape; support the adoption of digital technologies; and promote competition and consumer choice.
The measures in this plan address both the slowdown of productivity growth in the UK since the financial crisis and the longer-term productivity gap with other countries. The document is available on the www.gov.uk website.