Going backwards
Productivity is not everything but in the long term it is almost everything, which is a terrifying truth for the UK economy. Because our productivity is terrible and we seem to be getting worse not better and in comparison with out economic competitors we are falling ever further behind.
As the ONS announced yesterday in the first three months of this year, “output per hour worked, our headline measure of labour productivity, was 0.6% below the same quarter a year ago.”
This would matter little if it was a one off but productivity in the UK collapsed from 2% a year before the credit crunch to around 0.2% since. Far worse than our competitors for well over a decade.
It explains where all the money has gone, low productivity means low pay and lower tax revenues. The government should have heard the alarm bells more than ten years ago and invested in training, education, infrastructure, universities, attracting foreign firms and the best foreign workers.
It has done none of these things, in many cases it has done the opposite and we are paying the price.
The British economy is overheating with minimal growth, the government’s revenues are lower, borrowing higher, services worse.
The next government will inherit an economy that is crashing and burning and it will have very little money to put things right. But improving productivity is a must.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media