This paper provides a historical and analytical overview of the United Kingdom’s productivity performance and the policies aimed at boosting it from the 1950s to the present day. While most advanced economies have experienced a productivity slowdown since the 2008 financial crisis, the UK’s performance has been exceptionally poor, making it a critical case study. The paper examines four primary policy areas: trade policy, labour market reform, education and industrial strategy. While European economic integration has been a significant driver of productivity growth, Brexit has recently reversed it. The expansion of higher education yielded significant benefits, though the UK continues to suffer from a lack of technical and vocational training. Industrial intervention has been notably unsuccessful in the UK, with the government backing expensive programmes that either did not sell or even reach the production stage. The Anglo-French supersonic jet Concorde and British-designed nuclear reactors are key examples. In a forward look, the paper discussed challenges such as an ageing population and climate change, ultimately arguing that radical, bottom-up devolution is needed to successfully embed pro-productivity policies.
Author: Tom Kelsey