Question

To ask Her Majesty’s Government, in the light of figures from the Office for National Statistics on the United Kingdom's productivity as compared to other G7 countries, what steps are being taken to increase productivity.

Closing the productivity gap represents a real opportunity for the UK to raise its living standards. In July the Chancellor published “Fixing the Foundations: Creating a more prosperous nation”. This report outlines a number of policies designed to improve UK productivity over the course of this parliament.

Key new measures in the government’s productivity plan include:

• A reformed planning system, with streamlined ‘zonal’ system for brownfield sites, and measures to ensure more land is made available for house building;

• Simplifying and streamlining further education qualifications and inviting local areas to participate in the reshaping and commissioning of local provision;

• A network of prestigious Institutes of Technology, focused on delivering the higher level skills employers demand;

• Measures to sharpen incentives for providing outstanding teaching to university students and to open the higher education market to more new entrants;

• A Digital Transformation Plan to support the adoption of digital technologies across the economy;

• A joint FCA/PRA New Bank Unit to promote competition in banking; and

• Building stronger trading links with emerging markets, and mobilising the whole of government behind exporting.

These policies build on the productivity improving measures announced in the Summer Budget, examples of which include:

• Cutting the UK’s Corporation Tax rate to 18%, the lowest in the G20;

• Setting the Annual Investment Allowance at its highest ever permanent level;

• Creating a Roads Fund through reforming Vehicle Excise Duty for new cars;

• Funding new apprenticeships through a levy on large employers, which will ensure that those who prioritise training get more out than they put in;

• Putting higher education funding on a more sustainable footing, with maintenance loans replacing grants;

• Building a Northern Powerhouse and ensuring the productive potential of all parts of the UK is realised; and

• Reforming Network Rail to ensure it can deliver a faster, more reliable and more efficient railway.

“Fixing the Foundations: Creating a more prosperous nation” can be found on the GOV.UK website, which is attached.