Since the global financial crisis, UK productivity has been virtually stagnant. In a stagnant economy, economic policy becomes zero-sum: the situation of some can only be improved by worsening that of others. This is a recipe for conflict. It is essential to generate sustainable economic growth, instead.

The decline in productivity growth is not unique to the UK. Every member of the G7 leading high-income countries had sharply lower growth of output per hour between 2010 and 2019 than between 1990 and 2000. But the UK’s deterioration was the biggest, down from an annual rate of 2.6 per cent to a mere 0.4 per cent. The only G7 economy with lower productivity growth in the latter period was Italy.

Proximate explanations are easy to find: the UK’s average annual gross fixed investment was the lowest in the G7 between 2010 and 2018, at just over 16 per cent of gross domestic product; and the only G7 country with lower average investment in research and development was, again, Italy. Since new technology is embodied in new machinery, such low investment almost guarantees low productivity growth.