Productivity means pay rises
The Government’s new strategy, published today, is an unashamedly ambitious plan to lead the world
BRITISH workers will get pay rises if they learn new skills and work more productively, a Cabinet minister says.
Greg Clark, the Business, Energy and Industrial Strategy Secretary, blames sluggish pay increases on poor productivity among workers.
Writing in The Daily Telegraph, he says: “Our employment levels are the highest in our history and our industries are world leading. Yet since the financial crisis, our productivity performance has been slow, holding back our earning power.”
Mr Clark says that a new Government industrial strategy, launched today, will positively embrace technological change, and support businesses and its workers.
The Government will also unveil a major investment into the economy by MSD, a life sciences company, with the opening of a new state-of-the-art UK hub to research future treatments.
We are at one of the most important, exciting and challenging times in the history of global enterprise. Powered by new technologies, across the world the way we live our lives as workers, citizens and consumers is being transformed. Britain is extraordinarily well-placed to benefit from this new industrial revolution.
We are an open, enterprising economy, built on invention, innovation and competition, and our universities and research institutions are among the best in the world. We have a deserved reputation as a place to do business, with high standards, respected institutions, and reliable rule of law. We are a crossing point for the world thanks to our geographic position, the English language, our strong historic ties to other nations, our openness to ideas and our vibrant culture. Our employment levels are the highest in our history and our industries are world-leading, from financial services to advanced manufacturing, from life sciences to the creative industries – our innovations, goods and services are in demand the world over.
Yet the fact remains that since the financial crisis, Britain’s productivity performance has been slow, holding back our earning power as a country and as people. Productivity matters: ultimately, it means better-paid jobs for people and more money for our public services.
Our new Industrial Strategy aims to fix this. It is a partnership between government, businesses and local leaders working together for a more productive economy. In our White Paper published today, we set out a vision based on five foundations: our business environment, our people, our ideas, our infrastructure, and our places.
Improving our business environment means making the UK one of the best places in the world to start and grow a business. Investing in people means giving more of us the skills to seize the opportunities of today’s and tomorrow’s labour market. For ideas, we want to be among the top performers in research and development; for places, to make sure everyone can find good work near where they live; for infrastructure, to upgrade the connections we rely on, be they physical or digital.
R&D in particular is a major driver of productivity. Yet today, the UK invests less than competitors such as Germany and the USA. That is why last week the Prime Minister announced a record boost to R&D spending, starting with an extra £2.3billion in 2021-22. Our ambition is a combined public and private investment of
2.4 per cent of GDP by 2027, bringing us up to the OECD average, and an increase to 3 per cent over the longer term. Along with the other policies outlined today, this is a major advance towards a more productive economy.
Business is a crucial partner in all of this. Our Industrial Strategy is not something that is done to business but something done with, and indeed by, business. Rather than government finding all the answers, it is about firms coming together around a vision for the future of their sector and working with us to make it happen.
As well as setting a path to improved productivity, we also need to lift our eyes to the long term, putting the UK at the forefront of coming global trends. In consultation with leading scientists and technologists, we have identified four trends in which Britain can lead the global technological revolution: artificial intelligence and big data; clean growth; the future of mobility; and meeting the needs of an ageing society – a challenge faced by many nations across the world.
Today’s White Paper is an important milestone. Ultimately, though, its success will not depend on the words we put on paper but on cold, hard results in the years to come. We are therefore setting up an independent Industrial Strategy Council to be an outside voice which holds us to account, monitors our progress and makes recommendations.
This is an unashamedly ambitious vision for the future of our country, but we make no apology for that. Britain needs to be a leader, not a follower – a country which is ahead of the world, not behind the times. So let’s rally around this Industrial Strategy and build a more productive economy which is fit for the future.