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Dept of Trade and Industry

Answer

Mr. Stephen O'Brien: To ask the Secretary of State for Trade and Industry what measurable progress her Department has made towards meeting its Public Service Agreement target (a) to raise the rate of UK productivity growth over the economic cycle, (b) to improve UK competitiveness and (c) to narrow the productivity gap with the US, France and Germany. [198509] Ms Hewitt: HM Treasury estimates set out in Budget 2004 show that the trend rate of underlying productivity growth has increased from 2.22 per cent. per annum between 1986 Q2 and 1997H1 to 2.65 per cent. per annum between 1997H1 and 2001 Q3. Trend productivity growth is projected to be 2.35 per cent. per annum between 2001 Q4 and 2006 Q4. Data from the Office of National Statistics (ONS) published in autumn 2004 shows that, on the output per hour worked measure, the UK has narrowed the gap with Germany since 2000 but a sizeable productivity gap with the US, France and Germany remains. On the output per worker measure, the UK's productivity gap with the US, France and Germany is broadly unchanged, though the UK is as productive as Germany on this measure. Comparisons are relative to a 2000 base year when all four countries were at a similar point in their economic cycles. However, it takes time to raise competitiveness and increase productivity. Consequently, in assessing progress towards raising productivity, it is reasonable to look for changes in the drivers of productivity. The Government have identified "five drivers" of productivity--investment, innovation, skills, enterprise and competition-- and has monitored performance on a range of productivity and competitiveness indicators underlying these drivers since 1999. Some progress has been made on all five of these "high-level" drivers. In particular, there have been improvements in the competition regime, evidence of rising skills levels across the workforce and improvements in the UK's world- class science base. The Government are continuing to invest in these areas through the Skills Strategy, the Innovation Report and DTI's Five Year Programme.

Secondary information

Type

Written question

Reference

198509; 426 c1935-6W;426 c1941W

Session

2003-04

Subjects

Standards Productivity Trade competitiveness

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk