Productivity — House of Commons, 2015-06-17
Topic: Macroeconomics
Chinyelu Susan Onwurah (Labour, Centre-left): I would like to welcome you, Madam Deputy Speaker, to your position. I also welcome two new Members—the hon. Member for Hertsmere (Oliver Dowden) and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Harry Harpham). I was moved by their contributions and I am sure that the House will benefit from both their careers Low productivity is not in the interests of the UK, of employees or of business. One reason why the Chancellor missed every single one of his 2010 economic targets was that tax revenues did not meet Treasury forecasts. The jobs created by the last Government were low-paid, low-skilled, insecure jobs for commoditised labour. Although the toll of such insecurity on individuals is hard, the toll on the economy is also harsh. Less money is raised in tax, which means that we need more cuts. To improve productivity, we need to do one of two things: improve the outputs from people or from technology. During my 20 years in industry, including an MBA at Manchester Business School, successful managers often cited to me the bestseller and classic "In Search of Excellence", which sets out two fundamental principles that mark a great company. The first is valuing employees as partners and as "the primary source of productivity gains" The second is shared values of respect, quality and responsibility The Labour party is absolutely right to champion skills and encourage businesses to value and invest in their employees. What value does a zero-hour contract place on a worker? The Government consider labour to be a commodity, and commodities are not productive. We need to give people the skills and tools as well as a sense of agency and involvement to increase their productivity. As Mariana Mazzucato, a leading innovation economist, says, productivity does not come from paying workers less or attacking their rights That brings me to the second factor in productivity, which is technology. An article in the Harvard Business Review yesterday drew on analysis from the London Centre for Economic Policy Research to demonstrate that robots contribute 0.36% to total annual productivity growth rates whereas IT contributes 0.6%. Remember, our productivity growth rate is 0.4%, so we would welcome that increased contribution. As leading US technologists, economists and investors argued in the MIT Technology Review this month, the technology revolution "is delivering an unprecedented set of tools for bolstering growth and productivity, creating wealth, and improving the world." That does not mean dumping people in low wage, low skill and insecure zero-hour jobs When I asked the Prime Minister last week about productivity, his answer simply showed how little the Government understand about what drives productivity. He talked about planning and entrepreneurship, but for entrepreneurship to work we need a competitive environment that new companies can enter and compete in and we need high skills in the workforce. We will never achieve high rates of productivity unless we understand that people as well as technology are the key drivers.