Productivity was the key theme of the Autumn Statement. The chancellor was unrelenting in his speech on the need to improve the country’s poor productivity performance, remarking that the UK is “even less productive than France”. Recent work by the Centre for Cities looking at the productivity of the UK cities compared to European counterparts illustrates the size of the challenge – with only UK six cities more productive than the European urban average, compared to 19 in Germany and 15 in France.
Philip Hammond’s responses to the productivity problem outlined in the Autumn Statement included increasing R&D expenditure, initiatives to improve poor management in firms, providing more patient capital for growth firms, and rolling out super-fast 5G broadband. In addition, he also introduced a ‘new’ £23bn Productivity Investment Fund, which I assume will do what its name suggests.
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