A new industrial strategy has been revealed by the Government, aiming to tackle Britain’s “weakness” of productivity.
Business Secretary Greg Clark said workforce efficiency was “well below what can be achieved” and pledged to address the crisis threatening to “stop us achieving our potential”.
Britain ranks fifth out of G7 industrial nations, behind Canada and Japan, on productivity.
That weakness was at the heart of the sharp downgrades of Britain’s economic outlook by the Office for Budget Responsibility (OBR), revealed in last week’s Budget.
Mr Clark said the country should “seize” the benefits of a “new industrial revolution”.
He added: “This would be needed at any time, and Britain’s decision to leave the European Union makes it even more important.”
Image: Greg Clark pledged to tackle Britain’s productiviy ‘weakness’
Improvements in productivity – or doing more with less – would mean faster wage growth, a wider economic boost, and a healthier tax intake for the Treasury.
But these have failed to materialise as expected since the financial crisis.
The OBR’s preduction spells a weaker outlook of GDP growth, as well as public finances.
The announcement on Monday included news of a major pharmaceutical company opening a “world-leading” life-sciences hub in the UK.
MSD, known in the US and Canada as Merck and Co., are seeking a site in London that will support 950 high-skilled jobs – 150 of them new.
The Government will hope the news allays concerns about the pharmaceutical industry’s future post-Brexit.
Numerous bodies voiced concern when the new homes of two London-based EU authorities, including the European Medical Agency, were announced.
Their departure meant the loss of over 1,000 jobs, and tens of thousands of researchers and staff from companies visiting the institutions going elsewhere.
Image: The EMA’s new host city was announced last week
Merck has also previously attracted criticism for paying an academic publisher to print favourable articles about it, without indicating the content was sponsored.
The publisher later admitted the practice was “unacceptable” and that the journal – sent to tens of thousands of Australian doctors – lacked “the proper disclosures”.
Merck argued that the articles had been reprinted from peer-reviewed journals.
In 2004, it was also engulfed in a scandal about a painkiller – Vioxx – linked to heart attacks.
It paid $4.85bn (£3.6bn) to settle a majority of lawsuits brought against it, but avoided the up-to $30bn payout some analysts predicted.
Dr Roger Perlmutter, MSD’s research laboratories president, said of the new investment announcement: “Strong discovery capabilities and the pursuit of scientific excellence are foundational to MSD’s mission to save and improve lives around the world.
“A new UK location will enable us to build on our proud legacy of invention and be an important contributor to the vibrant and rapidly growing UK life sciences community, while providing access for more collaborations within the European life science ecosystem.”
Meanwhile, Labour blasted that productivity growth over the last decade had not been as sluggish since electricity was invented.
Commenting on the figures, Rebecca Long-Bailey, Labour’s shadow secretary for business, energy and industrial strategy, said: “The Conservatives’ failed economic agenda has stifled productivity and held Britain back.
“The shocking state of the economy is down to austerity, and a chronic lack of investment over the last seven years.
“The Conservatives have done untold damage to our economy and its capacity to lift productivity and living standards. The next Labour government will invest in the skills and infrastructure our country so badly needs.”