Productivity gap

We are told “the UK Government must prioritise an industrial strategy to help UK firms as new technology gains traction, the Confederation of British Industry is today urging”.

I wonder why the CBI would appeal to a UK government currently be set by more important issues such as Brexit and sexual harassment, and with a record of low improvements in productivity.

The UK performance since 2006 is miniscule to say the least. OECD statistics covering GDP produced per capita per hour shows a clear stagnation. 2006 showed $46.50 per hour increasing to a paltry $47.50 per hour or an increase of one dollar or around two per cent.

Compare that with a country across the North Sea, Denmark, where the 2006 figure was $59.30 rising to $63.50 in 2016. That is an increase of seven per cent on a higher figure and leaves this country with a 33.7 per cent advantage in terms of value output per hour compared with the UK.

Scotland has about the same productivity level as England and Wales, so these figures are compatible for Scotland despite the fact that billions have been spent on business development through Scottish Enterprise and Highlands and Islands Enterprise.

It would seem as if the money spent by the Scottish Government has little to show for the effort, at least in terms of productivity increases.

Perhaps the time has come for business to look elsewhere for improvements to the private economy, dominated as it is by companies that are members of CBI and similar organisations including Chambers of Commerce.

What about these looking at themselves and increasing their effort to lift productivity in their members, rather than looking to government with a poor track record in introducing new technology?

With the productivity gap so wide compared with top performing OECD countries, one would think this is an easy game. Just go out and copy what they are doing rather than thinking “not invented here”. Productivity improve- ments also have a role to play in the current Scottish debate over tax increases. tax increases happen automatically when the output per person per hour goes up. The individual worker with a higher income simply pays more tax without any increase in tax rates.

As the worker’s income goes up, it will even be possible to increase the rates and leave enough to pay the bills.

JOHN PETER Monks Road, Airdrie

Lanarkshire