There has been increasing media coverage about the UK’s growing ‘productivity gap’ in the last few weeks, but why is it important? The shaky and unsustainable return to growth experienced over the last year has not produced the improvement in living standards many were hoping for. The inherent structural weaknesses in the economy that were a major cause of the economic crash of 2008 remain very much the same today.
Productivity is one of the main ways of measuring the health of the economy and year after year from 2007, UK productivity levels have fallen behind other comparable economies such as France and Germany, with productivity growth now the weakest since the Second World War.
Government has the power to enact a range of economic policies that will have a real impact on the lives of ordinary people and their prospects for the future. A responsible attitude towards the economy is desperately needed and this briefing sets out what productivity is, why everyone is talking about it and what actions are needed from the next government.