What the Spring Budget means for productivity
08 March 2017
When economists think about the interventions which government can undertake to boost productivity, there are a relatively small number of key issues which research suggests might make a difference: R&D/innovation; education and skills; and transport infrastructure.
Today’s Budget and the previous Autumn Statement aim to provide support in all three areas.
Support for vocational and technical education was particularly welcome. The new system of T-levels and an extra £500 million of investment start to address a historic weak point in the UK’s training and education system.
There are clear economic benefits to this investment - our Young Workers Index found that the UK could boost its GDP by around £45 billion by reducing the number of 20-24 year olds not in employment, education or training (NEET) to match Germany, the best performing EU country.
Earmarking some of the additional investment already announced in the Autumn Statement for research talent, including 1,000 new PHD places on STEM subjects and a £690 million competition for local authorities to tackle urban congestion, complete Hammond's three pronged attack on UK productivity levels - in addition to the measures already announced in last year's Autumn Statement.