Reported today on City AM For the full article visit:
History will show that productivity, not Brexit, was the economic issue of our age. And the new government has made a high-speed start. The focus on "levelling up" the UK economy - and a resultant focus on regional productivity - is completely right. The story of this country's regional productivity is sometimes characterised solely as a gap between London and the rest of the country. But this doesn't even tell half the story. It's true that London excels, with output per hour a third higher than average. However, intra-regional variations are massive too. Neighbouring areas like Durham and Darlington have markedly different levels of productivity from each other. We also have places like Lancashire, where productivity has gone from behind the pack to punching above its weight.So what is the government doing? The new chancellor Rishi Sunak arrives in time to put a final lick of paint on a public infrastructure budget, expected on 11 March. Enabling greater numbers of people and goods to traverse our roads and rail more quickly will reap economic dividends. But if this is the levelling-up strategy, it has three critical shortcomings. The first is that infrastructure is necessary but not sufficient to local economic development. Poor infrastructure can be a brake on growth, but the essential challenge of UK productivity is unlocking the ambition and capability of UK firms. With the exception of selected transport and construction businesses, new rail and road investment does not make sufficient inroads on this problem.The second challenge is that the positive impacts can take decades to realise. UK productivity has now flatlined for 12 years - our worst performance since the 1820s. We're now way past being part of a global slump - we are far behind the recovery of our
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