PARLIAMENTARY DEBATE
Productivity - 22 May 2018 (Commons/Commons Chamber)

The Budget showed our determination to improve productivity, increasing the national productivity investment fund by £8 billion to £31 billion. With substantial investment in the regions of the UK, such as the £1.7 billion transforming cities fund, we want to help all parts of the country achieve their potential.

I am sure the House will be united in rejoicing that the UK’s productivity last year grew by 0.7% and in the last quarter increased at its quickest pace in six years. Does my hon. Friend agree that raising our productivity is the only way to deliver higher-paid and better jobs for the future?

I entirely agree with my hon. Friend. Raising productivity is the only sustainable way to grow the economy, boost wages and improve living standards, which is why we have given it such a clear and determined focus. With respect to Aberdeenshire, the North sea oil and gas industry is one of those sectors that have seen the greatest productivity increases in recent years. We will continue to support that with a highly competitive tax rate.

Given that average UK productivity is 30% below German levels, does the Minister agree it is now time to rebalance our economy and support further devolution for areas such as Cheshire and Warrington?

It was of course this Government who one year ago created the Mayors across the UK, including in Greater Manchester, and several of them, including Andy Street, have had a great impact on their local economies. I have had conversations with the leader of the Cheshire and Warrington local enterprise partnership and the Minister responsible at the Ministry of Housing, Communities and Local Government to take such matters forward.

My right hon. Friend is absolutely right. It is only with sound management of the public finances that we can continue to invest in the skills required to grow productivity, and that is exactly what we are doing with increasing investment in apprenticeships, through the apprenticeship levy, and with the T-levels, which will be largest change to our secondary education system since the introduction of A-levels and which we will be seeing in the coming years.

We have had numerous conversations with local partners in north Wales, and with the Welsh Government. I urge the hon. Gentleman to take the message to the Welsh Government, but they also need to engage with the UK Government to secure that important deal, which, as he says, will link the economy of north Wales with the north-west and the northern powerhouse to drive productivity.

Does the Minister agree that cutting corporation tax to 19% has encouraged business investment, boosting productivity as well as encouraging the creation of 3 million new jobs?

My hon. Friend is absolutely right. When we reduce the tax to 17%, we will see those productivity gains increase—and, contrary to what the Opposition have claimed, revenues have increased.

Eurostat figures show regional inequality in the United Kingdom, measured by output per hour, to be the worst in Europe, and the Government have failed to close the gap since 2010. When will the Chancellor commit himself to making the investment that is needed to end regional imbalances that have seen the north of England set to receive just one fifth of the transport investment per capita in London?

The Infrastructure and Projects Authority, which has conducted the most rigorous analysis of Government spending on infrastructure, has made clear that the north of England will receive more funds from the present Government than any other region in the United Kingdom, including London and the south-east.