If British productivity could be raised by 32%, to match that of the United States, then average weekly earnings in January this year would have been £164 higher, at £678 instead of £514.
A report by the TaxPayers’ Alliance (TPA) reveals that, on a yearly basis, this would mean an £8540 pay rise, from £26,707 to £35,247.
The TPA points out that the UK produces less economic output per hour worked than other G7 economies. While Italy and Canada produced about the same in 2016, and Japan produces 13% less, France and Germany manage 25% more and the US tops the G7 table with 32% more.
This means it is producing $63 per hour while the UK produces $48.
Available at https://bit.ly/2HHWiZX, “Productivity dirty dozen: 12 policy failures” highlights, as its title suggests, 12 areas of policy which offer, in the TPA’s opinion, substantial opportunities to enhance productivity.
These include: planning restrictions; stamp duty on homes; taxes on low incomes; international trade; transport congestion; and zombie firms.
On this last point, the report argues that firms which can only meet their loan repayments by way of persistently low interest rates are congesting markets and weakening the growth of more productive companies who find it harder to access capital.
With regard to international trade, the TPA argues for the removal of barriers to trade such as the EU's customs union and common agricultural and fisheries policies. It believes that restrictions on imports, including tariffs, standards and other administration should be eliminated where possible, together with payments to farmers and fishermen.