United Kingdom

 

Productivity has been exceptionally weak since 2007, and reviving it is essential to sustain growth and living standards. Fiscal decentralisation and greater infrastructure investment, better matching of skills to jobs and more rapid exit of non-viable businesses would raise innovation and productivity, and would make growth more inclusive.

  • Invest in vocational education to boost skills.
  • Enhance the National Infrastructure Plan for long-term infrastructure strategy.
  • Prioritise public infrastructure investment and better use private financing, and move towards user pricing.
  • Further relax regulatory constraints on housing supply.
  • Collect and share credit information on businesses through credit reference agencies or directly through the regulator.
  • Encourage the development of new credit providers, while ensuring proper supervision.

Productivity - United Kingdom

Source: OECD June 2016 Economic Outlook database; OECD, Income Distribution and Poverty database; and OECD Secretariat calculations from EU-SILC – preliminary results.

     

Key publications

Productivity Plan”, released by the government in July 2015, covers a wide range of areas, including the tax regime for businesses, skills, science and innovation, digital infrastructure, investment and trade. 

C. Patterson, A. ┼×ahin, G. Topa and G. Violante (2016), “Working Hard in the Wrong Place: A Mismatch-Based Explanation to the UK Productivity Puzzle”, Federal Reserve Bank of New York Staff Reports, No. 757, January.

R. Harris and  J. Moffat (2016), “Plant closure in Britain since the Great Recession”, Economics Letters, Vol. 140, March. 

E. Giovannetti and C. Piga, (2014), "Private and External Benefits from Investment in Intangible Assets", BIS Research Paper No. 203, December.

Institutions iconProductivity - enhancing institutions

Office for Budget Responsibility

The Office for Budget Responsibility was created in 2010 to provide independent and authoritative analysis of the UK’s public finances. It is one of a growing number of official independent fiscal watchdogs around the world. It has five main roles: 1) economic and fiscal forecasting; 2) evaluating performance against targets; 3) sustainability and balance sheet analysis; 4) evaluation of fiscal risks; 5) scrutinising tax and welfare policy costing.

National Infrastructure Commission

The UK National Infrastructure Commission was established in October 2015 as the non-ministerial government department responsible for providing expert advice and unbiased analysis to the government on pressing infrastructure challenges and long-term infrastructure needs facing the United Kingdom. Former Cabinet Minister and Transport Secretary, Andrew Adonis, has become the Commission’s first chairman.

 

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