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Productivity

vs USA

20% below

Growth Since 2008

Near zero

Capital/Worker

1/3 of peers

📋 Overview 🔬 Full Research Analysis→🕸️ View in Graph

38%Current

Potential: 70%

✗Key Problems

1.20% below US, 14% below France/Germany - GAP WIDENING
2.Near-ZERO growth since 2008 - lost decade+
3.1/3 less capital per worker - chronic underinvestment
4.£20,000/family POORER than if pre-2008 trend continued

✓Solutions

1.0% CORP TAX on reinvested profits: Incentivise investment (Estonia model)
2.EMPLOYMENT FLEXIBILITY: Simplified rules for small firms <50 employees (US model)
3.3-YEAR TAX INCENTIVE: STEM graduates staying in UK (Ireland talent retention)
4.REGULATORY REVIEW: Sunset clause on 20% of regulations annually (OECD best practice)

🔬

Analysis

Root Causes

20% below US, 14% below France/Germany - GAP WIDENING

Near-ZERO growth since 2008 - lost decade+

1/3 less capital per worker - chronic underinvestment

£20,000/family POORER than if pre-2008 trend continued

Reform Pathway

0% CORP TAX on reinvested profits: Incentivise investment (Estonia model)

EMPLOYMENT FLEXIBILITY: Simplified rules for small firms <50 employees (US model)

3-YEAR TAX INCENTIVE: STEM graduates staying in UK (Ireland talent retention)

REGULATORY REVIEW: Sunset clause on 20% of regulations annually (OECD best practice)

Cascade Effects

Reforms in Productivity will have downstream effects on 5 connected domains:

💷Wages→💰Fiscal→🏥Health→🏭Industry→🤖Tech/AI→

Read Full Research Analysis (Root Causes, Stakeholders, Evidence, Timeline)→

Policy Costings

Rigorous fiscal analysis of Productivity reforms

View All Costings →

⚠️

CONTESTED ESTIMATE

Significant methodological disputes. View caveats below.

📈Productivity

Regulation Sunset Clause

Upfront

+£2.0bn

Annual

+£2.0bn

Revenue

+£8.0bn

Net Annual Effect

+£10.0bn/year

Payback in 3 years

GDP +1.5%Productivity +0.35%very high uncertainty

UNCERTAINTY RANGE (Annual Net Effect)

Most Pessimistic

-£10.0bn

⟷

Most Optimistic

+£25.0bn

⚠️

MAJOR CAVEATS

•Benefit-cost ratios of UK regulations rarely evaluated post-implementation; assumed benefits often not realised
•Regulatory uncertainty is real risk - clear sunset process essential to avoid investment freeze
•International comparison: UK regulatory burden heavier than US, Singapore; lighter than EU
•Catastrophic failure risk real but rare; status quo also has costs (Grenfell was regulatory failure, not absence)
•Externalities cut both ways: regulation can create negative externalities (housing shortage, energy costs)
•Track record: UK regulatory state has grown continuously since 1990s while growth has stagnated

4 sources