The issue has thwarted far more competent governments than this one. The erosion of Boris Johnson’s authority makes the chances of bold, long-term action even lower
Save time by listening to our audio articles as you multitaska vote of confidence in his leadership, the narrowest field of view focuses on the prime minister: how wounded he is, and how long he will survive. Zoom out a bit and you can see the immediate issues facing an enfeebled government, from a creaking health service to the rising cost of living.
In the coming months we will publish a series of articles on how to get Britain growing again. But first it is vital to understand how bad things are. That means focusing on one issue—productivity. There is no doubt that the cost of this lost decade was huge. Had Britain’s productivity growth rate not fallen after the global financial crisis,per person in 2019 would have been £6,700 higher than it turned out to be. But there is fierce debate over what exactly went wrong. Diane Coyle, a director of the Productivity Institute, a research consortium, likens the search for a source of Britain’s weak productivity growth to the conclusion of an Agatha Christie mystery.
But even if the frontier is slowing, there is no iron law that says Britain cannot move closer to it. Catching up with America’s level of labour productivity would mean that Britain’sper person would be £6,600 higher, for example. And even if it is hard to pin down the exact sources of the productivity slowdown in the 2010s, it is easier to identify areas where Britain has to do better in future. They fall into three big categories: investment, people and the spread of knowledge.
A related problem is that investment is stymied by the difficulty of getting anything built in Britain. According to a recentindex of land-use governance, which measures how fragmented planning decisions are, Britain’s system came second only to Latvia among 18 countries surveyed. In innovation clusters like Oxford and Cambridge, building is constrained by strict rules preserving historic architecture and the surrounding countryside.
Better training leads naturally on to a third category, the spread of knowledge. Productivity improves when high-skilled people work with other high-skilled people, when transport links are integrated, when ideas diffuse. Geography is one dimension of this problem: regional inequality is very high in Britain.
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