Productivity — House of Commons, 2015-06-17
Topic: Macroeconomics
Julian Carlton Knight (Conservative, Centre-right): Thank you, Madam Deputy Speaker. I am particularly delighted that I may not be taking an intervention on this, my second speech to this place. I congratulate my hon. Friend the Member for Hertsmere (Oliver Dowden) and the hon. Member for Sheffield, Brightside and Hillsborough (Harry Harpham) on their very fine maiden speeches Productivity is an excellent subject to debate, because raising this nation’s productivity has been the economic elephant in the room for a generation or more. Why is it that we beat many of our larger continental rivals on measures of economic performance and, crucially, employment, and enjoy the benefits of a flexible and vibrant labour market, yet our productivity per worker is lower than that of both France and Germany It is good to hear the Opposition mentioning business, although seemingly only in soundbite form. I think we often lose sight of the simple fact that every penny we earn as a country—every job and every sum spent by the public sector on schools and hospitals—comes from business ultimately. It seems, however, that the language used by the shadow Chancellor in particular and in the more left-leaning press has the air of productivity being the latest economic criticism cab off the rank, this week’s crisis of choice. The Opposition have talked of numerous supposed crises in recent years: we were apparently cutting too far, too fast; then we had the double-dip recession that now, it seems, never took place; then the domestic energy crisis; and finally we had the cost-of-living crisis, whereas, as we know, real incomes are now moving ahead, while inflation is at a generational low. All the time, the UK economy has been beating expectations. It is good that the Labour party has now settled on productivity, because it is a far longer-term challenge that we must meet, but it has chosen the wrong path to meet this challenge, if the policies of the past few years are anything to go by. More big state; taxing entrepreneurs and wealth creators—this is not a passport to productivity. It is quite the opposite. In addition, Government borrowing matters hugely to productivity. If we have runaway borrowing, eventually we will have higher interest rates for businesses and individuals, while the debt interest repayments will mount up for the Government and in turn damage public investment The Government’s first job is to get their finances in order and create certainty for business to invest and individuals to strike out on their own. Where the Government can play a key role is through the education system. Young people need many different options when they leave education, and in my constituency the biggest employer, Jaguar Land Rover, is very involved in local schools, offering apprenticeships. Universities should be among a suite of options for young people, so I am delighted that the Government are moving ahead with their apprenticeship agenda Another area where the UK can draw a lesson from Jaguar Land Rover is in exporting to the right countries. It was a travesty that when the coalition Government came to power in 2010 we traded more with Ireland than with the BRIC nations, and I applaud the Prime Minister’s efforts in this area. The truth is that we must look to trade with everyone, as this will bring in the necessary outside investment, skills and different perspectives We have allowed people to live in a state of dependency. For far too many, welfare has become a handout rather than a hand-up. Welfare reforms are a crucial means to get people economically active and contributing rather than receiving from the state. This raises productivity. And please, let us never again hear, "It’s the wrong type of job"—a regular refrain from Opposition Members. A job is a job, and from humble starts superb careers can be built. There is a cultural snobbery factor when it comes to work, which this country needs to address. All sides need not only to talk the language of business, but genuinely to understand that it is a transformative bringer of social good—more so than the state.