Tax Burden and Economic Growth
Debate between Lord Wilson of Sedgefield and Lord Barber of Ainsdale(2 weeks, 5 days ago)
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Lord Wilson of Sedgefield (Lab)
I think it is fair to say that, as far as GDP per capita is concerned, the other figure that is not really looked at but is prevalent in all this is payroll employee-based productivity, which has grown by 2.2%—the fastest calendar year rate outside of the pandemic for more than a decade. Productivity growth is the main way to get a sustainable increase in long-term economic growth. As I said, we are not out of the woods yet, but there is a lot going on that is positive and optimistic; that is the line we need to toe.
Lord Barber of Ainsdale (Lab)
My Lords, our new Prime Minister has talked about growth in every postcode. He is surely right to set that objective so that communities are not left behind. How will the Government ensure that the revenues raised through taxation help to deliver growth in every part of our country?
Lord Wilson of Sedgefield (Lab)
My noble friend asks a very important question which is central to this Government’s plan for growth and devolution. Closing regional productivity gaps is a major economic opportunity, with productivity in northern cities around 20% lower in than similar-sized cities in the OECD. If we are able do that, we can boost UK GVA by £82 billion. We are devolving more power to local leaders and investing in transport and housing infrastructure. The aim is not simply to redistribute existing growth but to increase the productive potential of major cities around the country. We are going to rely on regional mayors, for example, to ensure that they have a say in how that growth takes place.