During the Summer Budget on 8 July, George Osborne outlined many plans, which included hunting tax dodgers, fixing the Annual Investment Allowance, cutting corporation tax and also touched upon improving productivity in the UK.
Following on from that, Sajid Javid made a speech in Birmingham on 10 July to discuss “fixing the foundations” of the economic challenge that is British productivity.
He noted that Birmingham created more jobs than the whole of France in 2014, a result of the Conservatives’ long-term economic plan, and claimed that boosting productivity is the best way to stay on track.
Calling it one of the few areas where Britain has been lagging, Javid said it takes a British worker five days to produce what German counterparts can achieve in four days.
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“Productivity isn’t just some obscure measure, of interest only to economists. It matters to each and every one of us. If we could match USA for productivity, it would boost our GDP by 31 per cent – that’s equivalent to £21,000 a year for every household in the UK. And higher productivity means higher incomes. When productivity rises, standards of living rise too,” he explained.
Describing transport as the area closest to his heart, Javid commented that the internet has changed the workplace, supporting the ability to work remotely. That said, he went on to highlight that reliable transport is still paramount – underlined with the chaos of the tube strikes – calling links a “vital part of any serious, growing economy”.
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He slammed previous governments for failing to invest and develop “the arteries of British business”.
“Congestion on our roads is getting so bad that by 2040 we could lose more than 100 million working days to traffic jams. 100 million days! If we don’t fix this problem British business will, quite literally, get stuck in the slow lane of Europe,” said Javid.
“So over the next five years we’re going to invest £100bn in infrastructure. We’re going to create a new roads fund to ensure continued high and stable investment in the strategic road network for generations to come.
“We’re going to get the rail investment programme back onto a sustainable footing, and change the way we provide public money so that Network Rail focusses firmly on the needs of train operators and passengers.”
He added the south east airport debate will have a decision by the end of the year.
However, Javid’s productivity push is at odds with remarks he made that international students should study in the UK and leave, which could mean British business lose out on talent that was fostered locally.
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