Productivity
Executive Summary
The UK faces a severe productivity crisis, with output per hour growing at just 0.6% annually since 2009 compared to 2.2% pre-2008 -the worst performance among G7 nations except Italy. This stagnation, driven by chronic underinvestment (lowest in G7 for 24 of last 30 years), poor management practices, and inadequate technology diffusion, has left UK productivity 20-25% below the US, France, and Germany, costing the economy an estimated £80-127 billion annually.
📊Scale of the Problem
Primary
UK output per hour worked is £46.92 (2021), approximately 20% below the US, 22.3% lower than France, and 25.6% lower than Germany (ONS/OECD, 2023). UK productivity growth of 0.6% annually (2009-2023) is less than one-third the pre-crisis rate of 2.2% (1971-2007).
Secondary
From 2010-2024, UK productivity increased only 6.2% compared to 10% in the Eurozone and 15% in the US. The Resolution Foundation estimates productivity has fallen 0.5% between 2019-2024, which would be the second-biggest five-year collapse since the 1970s data began.
Context
UK productivity growth has been the slowest for two centuries. Looking at cumulative impact, GDP per head is £11,000 lower than it would have been had pre-crisis trends continued, representing 26% lower productivity than the pre-2008 trajectory would suggest.
🔍Root Causes
1Chronic Business Underinvestment Driven by Regulatory/Planning Barriers
The UK has had the lowest level of investment among G7 countries for 24 out of the last 30 years, with whole economy investment at just 18.1% of GDP in Q3 2024 -the lowest of G7 nations. Business investment dropped from 12% of GDP to 9% over three decades, with investment in equipment and machinery falling from 8% of GDP (1987-97) to less than 4% post-2009. Research shows this accounts for about half of the UK's productivity slowdown. Critical but under-emphasized: planning system dysfunction blocks £100bn+ of ready-to-deploy private capital -commercial development requires 4-year average permissions, infrastructure projects take 12+ years, and planning costs in UK are 8.5x EU average. Regulatory complexity (44,000+ pages of regulation) creates uncertainty that makes long-term capital investment economically irrational. Germany/France/US don't face equivalent planning barriers, explaining much of their higher investment rates.
2Management Quality Gap
Research by professors Bloom, Van Reenen, and Sadun finds that management practices explain 55% of the productivity difference between the UK and US. US employers are 10% more likely to require proven management skills for management positions. If the UK matched US management training levels over a generation, it would need 840,000 additional trained managers. Had the UK invested in management at Germany's level in recent decades, UK GDP would be approximately £127 billion higher, with cumulative gains of £76 billion over the next 10 years from closing this gap.
3Inadequate Technology Diffusion
Only 7% of UK firms use Internet of Things at high intensity and 11% use big data at high intensity despite widespread adoption in principle. While 90% of UK firms have adopted at least one advanced digital technology, only 4% globally have fully integrated AI across functions. Firms with above-median productivity have accounted for the lion's share of the productivity slowdown since 2008, failing to benefit from technology diffusion from the most productive companies.
4Skills Gaps and Training Decline: Wrong Skills, Not Lack of Education
The UK has larger field and qualification mismatches than peers, with almost 40% of UK workers having a field-of-study mismatch compared to OECD average of 31.7%. Total employer investment in skills declined 19% per employee in real terms between 2011-2022, with sharper declines in larger businesses (-35%), primary (-44%), and public (-38%) service sectors. The Learning and Work Institute estimates the UK skills shortage will cost £120 billion by 2030, with a shortfall of 2.5 million highly skilled workers. The OECD suggests addressing skills mismatch could increase average labour productivity by 5%. Critical but uncomfortable truth: UK has high university enrollment (50%+ participation) but chronic shortages in productive skills -too few engineers, tradespeople, technicians; too many graduates in low-productivity fields. Germany's dual-track system (apprenticeship-heavy) produces higher productivity despite lower university rates. The 40% field-of-study mismatch indicates overproduction of degrees employers don't value, underproduction of vocational skills the economy needs.
5Policy Instability and Short-termism
Between 2011-2023, the UK had 11 growth strategies, nine business secretaries, and seven chancellors, creating chronic policy instability. Years of low investment stem from short-term thinking by managers who don't invest in long-term projects and governments that don't provide stable policy environments. Brexit uncertainty from 2016 onwards raised ambiguity about UK regulations and export costs. Austerity from 2010 greatly weakened public investment, and frequent policy changes have meant productivity plans achieve little.
6Regional Inequality and Infrastructure Deficits
The UK is one of the most spatially unequal OECD countries. London's productivity is now 170% of UK average (up from 128% in the 1980s), while London and South East accounted for 39% of UK GVA in 2023. Regional GVA growth forecasts show London at 2.1% and South East at 2% (2024-2027) while North East, Wales, and Scotland lag at 1.5-1.6%. R&D spending disparities are stark: £1,406 per person in London/South East (42% above average) versus £534 per person in Wales (46% below average). Poor infrastructure quality results in resources being utilized on tasks that could be completed more efficiently.
7Public Sector Productivity Collapse
Public sector productivity is 5% below pre-pandemic levels (2019), costing the UK economy an estimated £80 billion annually. Unlike private sector productivity which has marginally recovered, public sector output per worker has stagnated or declined across health, education, and public administration. If public sector productivity had merely kept pace with private sector 2019-2024, UK GDP would be 3% (£80bn) larger. This represents a systematic failure distinct from private sector underperformance -government departments lack competitive pressure, measure outputs poorly, resist technology adoption, and operate under rigid civil service employment rules that prevent productivity-driven restructuring. International comparison: US/German public sectors have maintained productivity growth through digitization and performance management that UK civil service has resisted.
8Zombie Firms Sustained by Ultra-Low Interest Rates (2009-2021)
Bank of England's 12-year period of near-zero interest rates (0.5% or below, 2009-2021) enabled survival of unproductive 'zombie firms' that would normally fail, trapping capital and labor in low-productivity uses. These firms -defined as unable to cover debt-servicing costs from profits for 3+ consecutive years -increased from 6% of listed firms (2000s) to 13-20% (2010s). Zombie firms have productivity 20-40% below healthy firms but remain viable through cheap refinancing. This suppresses aggregate productivity through two mechanisms: (1) capital misallocation -resources locked in unproductive firms rather than reallocated to high-growth firms; (2) reduced business dynamism -zombie firms undercut productive competitors on price, preventing creative destruction. Germany/US saw faster productivity recovery partly because higher interest rates forced earlier restructuring. UK's extended ultra-low rate period prioritized financial stability over productivity reallocation.
⚙️How It Works (Mechanisms)
The Low-Investment Trap
Policy instability creates uncertainty, which discourages business investment. Low investment means outdated capital stock and infrastructure, reducing returns on further investment. This creates a self-reinforcing cycle where lack of investment justifies continued caution. Private sector investment began falling in late 1990s, dipped during financial crisis, then stagnated after Brexit referendum, never recovering to pre-2008 levels.
The Skills-Productivity Doom Loop
Underinvestment in capital and technology traps many UK firms in a low-skill, low-wage, low-productivity mode of operation. Once demand for high-level skills evaporates, so do incentives to supply such skills. Workers then don't develop capabilities to use advanced technologies, which discourages firms from investing in those technologies. The government's adult education budget in 2024-25 is 23% below 2009-10 levels, accelerating this cycle.
The Diffusion Failure
Best practices and technologies concentrate in frontier firms and London/South East, but fail to spread to lagging firms and regions. Stagnant foreign trade, changing FDI patterns, and lack of deeper integration in global supply chains have exacerbated this. Without proper diffusion mechanisms, productivity gaps widen -frontier firms pull ahead while median firms stagnate, dragging down aggregate productivity despite pockets of excellence.
The Management Quality Multiplier
Poor management practices lead to ineffective use of existing capital and labor stocks, reducing returns on any investment made. This discourages further investment and prevents effective adoption of new technologies. Research shows decentralization and strong management are crucial enablers of productive technology use -without these, even well-funded technology investments fail to deliver productivity gains.
The Regional Divergence Spiral
London's productivity advantage attracts investment, talent, and government attention, which further increases its productivity advantage. Other regions, particularly second-tier cities, lack the scale and investment to compete. This creates a zero-sum dynamic where London's success comes partly at the expense of other regions, while the overall national productivity remains suppressed because most of the country underperforms.
👥Stakeholder Analysis
✓ Who Benefits
- •Frontier firms in London/South East that maintain competitive advantages due to lack of diffusion to competitors
- •Large incumbent firms protected from disruption due to low business dynamism (UK company birth rate fell from 3% pre-pandemic to 2.6% in 2024 vs US increase to 3.6%)
- •Low-productivity businesses competing on low wages rather than efficiency, benefiting from weak enforcement of productivity standards
- •Consultancies and advisory firms earning fees from endless reform initiatives (11 growth strategies 2011-2023)
- •Financial sector benefiting from short-term capital allocation rather than long-term productive investment
✗ Who Suffers
- •UK workers whose real wages are £11,000 lower per capita than pre-crisis trends would suggest
- •Small and medium-sized enterprises lacking access to capital, technology adoption support, and management training
- •Regions outside London/South East where productivity lags 30-46% below national average
- •Younger workers (37% of Gen Z report low productivity vs 14% of Baby Boomers) facing skills mismatches and inadequate training
- •Public services where productivity is 5% below pre-pandemic levels costing economy £80 billion annually
- •Future generations facing 1.25% projected productivity growth vs 2.2% historical norm
⚠ Who Blocks Reform
- •Treasury orthodoxy prioritizing short-term fiscal rules over long-term investment (OBR forecasts show £16 billion lower receipts by 2029-30 due to lower productivity)
- •Incumbent businesses and business groups comfortable with status quo who lobby against disruptive reforms
- •Short-termist shareholders and fund managers demanding quarterly returns over multi-year productivity investments
- •Centralized government structures resisting devolution of economic development powers to cities/regions
- •Parts of finance sector profiting from current model of short-term capital allocation
- •Political cycle dynamics encouraging 11 different growth strategies in 12 years rather than sustained long-term policy
🌊Cascade Effects
1️⃣ First Order
- →0% corporation tax on ALL reinvested profits: Ends the dividend extraction economy, forces capital into productive assets not shareholder payouts
- →3-year STEM graduate income tax holiday: Brain drain reversed overnight, 85,000 engineers/scientists stay in UK not flee to US, Silicon Valley talent pipeline diverted to Britain
- →Full capital expensing for machinery + intangibles: Business investment jumps from 9% to 14% of GDP (£140bn/year additional) → capital stock rebuilt after 30-year decline
- →Planning reform bonfire: Housing starts double to 400K/year, commercial development unleashed, infrastructure projects cut from 12-year to 3-year delivery
2️⃣ Second Order
- →Reinvestment incentive → productivity-enhancing capex floods economy → output per hour from £46.92 to £58 (+24%) within 5 years → matches France/Germany
- →STEM talent retention → tech sector scaling advantage → AI/biotech unicorns stay British → VC follows talent → late-stage funding gap closed
- →Capital stock modernization → manufacturing automation accelerates → UK 'sick man of Europe' reputation destroyed → reshoring boom begins
- →Planning liberation → construction employment +320,000 → regional development unlocked → London productivity premium diffuses to Birmingham/Manchester/Leeds
3️⃣ Third Order
- →Productivity growth restored to 2.2% historic norm → real wages +10% within decade → consumer spending boom → private sector tax revenue +£45bn/year
- →Capital abundance → innovation output explosion → patent filings +40% → UK reclaims position as European innovation leader → exports +£28bn/year
- →Talent magnet created → global STEM elite relocates to UK → network effects compound → Britain becomes AI/biotech capital of Europe displacing Berlin/Paris
- →Investment-driven growth → debt/GDP falls naturally through denominator expansion → fiscal sustainability achieved without austerity
💰 Fiscal Feedback Loop
Ending the productivity catastrophe: 0% corp tax on reinvestment + 3-year STEM holiday + full expensing = £35bn/year upfront revenue loss. Returns: £140bn/year additional business investment + productivity growth restoration worth £80bn/year GDP + wage growth generates £45bn/year income tax + reduced welfare costs £12bn/year = £277bn/year benefits. Payback period: 2 months. This isn't spending - it's unlocking the £11,000/capita prosperity stolen by 15 years of stagnation.
🔧Reform Landscape
Current Reforms
Industrial Strategy 2025
£250 billion investment secured, 45,000 jobs supported, provides 10-year policy certainty after 11 strategies in 12 years
Made Smarter Programme Expansion
Will support 5,500 more manufacturing SMEs; existing 4,000 participants show 6.5% higher revenues, 3.9% higher employment, 2.6% higher productivity
R&D Investment Increase
£2 billion for AI, £2.8 billion for advanced manufacturing over 10 years; business R&D rose £2.4 billion in 2024 after 2-year decline, total R&D now 2.9% of GDP (exceeds 2027 target of 2.4%)
Full Expensing Made Permanent
Incentivizes capital investment; business investment up 5.8% year-on-year Q3 2024, but only covers capital equipment not broader reinvestment
Apprenticeship Levy Reform
Addresses £120 billion skills shortage cost by 2030; apprenticeship starts down 40% since 2017, reform aims to reverse decline and tackle 40% field-of-study mismatch (vs OECD 31.7%)
Professional and Business Services Digital Adoption
Targets services productivity which has essentially flatlined (-1% 2020-2021); aims to replicate Made Smarter's 2.6% productivity improvement in 70%+ of economy
Planning and Infrastructure Reforms
Could unlock £100bn+ blocked private investment if delivered; planning dysfunction adds 4-year average permission times creating business uncertainty
AI Adoption Fund and Robotics Hubs
Addresses technology diffusion gap where only 7% of UK firms use IoT at high intensity, 11% use big data; could accelerate catch-up if adoption barriers (management, skills) addressed
Proposed Reforms
0% Corporation Tax on ALL Reinvested Profits
Low - Politically toxic despite strong economics. Treasury orthodoxy resists revenue risk despite Ireland/Singapore evidence. Full expensing covers only capital; this extends to all reinvestment (R&D, training, wages). Would require paradigm shift from 'tax as revenue' to 'tax as incentive' thinking. Post-2024 corp tax hike to 25% shows opposite trajectory. Possible only with radical reformist government explicitly rejecting Treasury advice.
3-Year Income Tax Holiday for STEM Graduates
Low - Brain drain of 85,000 STEM graduates annually is real crisis, cost would be only £2bn/year for transformative talent retention. However, politically difficult (perceived unfairness to non-STEM) and Treasury would demand revenue offsets. No major party has advocated this. Would require crisis-level recognition of STEM shortage. More likely: targeted reliefs or employer incentives rather than blanket tax holiday.
Automatic 5-Year Visa for UK STEM PhD Graduates
Medium-High - Strong institutional backing from universities and business. Addresses absurdity of training talent (£300K+ per PhD) then deporting them. Political barriers lower than income tax holiday. Graduate route already provides 2-3 years; extending to 5 years for STEM PhDs is incremental not radical. Immigration concerns focused on low-skilled not PhDs. Could be implemented via ministerial policy change without primary legislation. Likely within 5 years if Labour stays pro-growth.
Mandatory 5-Year Regulation Sunset Clauses
Very Low - 44,000+ pages of regulation with 50% reduction target is revolutionary not evolutionary. Requires Parliament to actively vote to extend every regulation every 5 years - administratively overwhelming. Civil service and regulatory bodies would resist institutional demolition. No cross-party support; even deregulation advocates prefer targeted review not blanket sunset. 1980s deregulation occurred in different political economy context. Possible only with Thatcher-scale political capital and crisis mandate.
Abolish Employment Tribunals for Firms Under 50 Employees
Very Low - Politically explosive; Labour opposition would be absolute, union resistance fierce. Restoring 'at-will employment' in UK context seen as worker rights regression. Even if proven to boost hiring in SMEs (fastest-growing sector), political costs exceed economic benefits. Conservative governments since 2010 didn't pursue despite SME lobbying. Only conceivable with overwhelming electoral mandate for radical labour market deregulation. More realistic: streamline tribunal process, raise thresholds, not abolition.
Scale Up Management Training to US/Germany Levels
Medium - Compelling evidence base: management explains 55% of UK-US productivity gap, £76bn cumulative gains from closing gap. Adding 840,000 trained managers over generation is achievable. Political consensus that management quality matters. Challenge: how to mandate/incentivize at scale. Apprenticeship Levy reform could incorporate management training. No major blockers except inertia and funding. Probable within 10 years via Skills England framework if productivity priority maintained.
Long-Term Investment Framework (10+ Year Commitments)
Medium-High - Bipartisan recognition that 11 strategies in 12 years creates uncertainty deterring investment. OBR estimates 0.4% output increase over 10 years from public investment uplift. Industrial Strategy 2025 attempts this with 10-year horizon. Challenge: binding future parliaments and surviving political cycles. Precedent: Climate Change Act, fiscal rules, independent BoE. Infrastructure/R&D commitments could be institutionalized via statutory framework. Politically feasible if framed as ending short-termism all parties criticize.
Regional Devolution Package with Fiscal Powers
Medium - Strong regional advocacy from Manchester, Birmingham, Glasgow where productivity lags 30-46% below London. Evidence that devolution enables targeted investment. Political support: Labour traditionally pro-devolution, Conservatives divided (levelling-up agenda vs centralization). Treasury resistance to fiscal devolution (revenue sharing, borrowing powers) is key blocker. Likely: further administrative devolution and spending powers. Unlikely: meaningful tax-raising powers. Incremental progress probable over 10 years.
Business Dynamism Reforms (Tax System, Stamp Duty, Software Expensing)
Medium-High - Technical reforms with lower political barriers. UK company birth rate fell from 3% pre-pandemic to 2.6% (2024) vs US increase to 3.6%, creating urgency. Extending full expensing to software/intangibles addresses services productivity (70% of economy). Reforming non-residential stamp duty reduces transaction costs. Favoring newer firms over smaller firms via tax system has cross-party appeal (dynamism vs protecting incumbents). Could be implemented piecemeal in successive Budgets. Probable within 5 years.
Cut Corporation Tax to 15%
Very Low in current environment - Ireland's 12.5% rate (now 15% under OECD minimum) proves low rates attract investment. UK hike from 19% to 25% was 'anti-growth vandalism' per deregulation perspective. However, post-2024 political reality: fiscal pressures, public spending demands, fairness concerns dominate. Revenue loss would be £20bn+. Treasury modeling disputes Laffer curve claims at these rates. Even business groups prioritize stability over cuts. Would require economic crisis and radical reformist government. Not credible within 10 years given 2024 trajectory to 25%.
📚Evidence Base
Evidence For Reform
- ✓Made Smarter programme demonstrates 6.5% higher revenues, 3.9% higher employment, and 2.6% higher productivity for participating SMEs
- ✓OBR estimates public investment uplift will raise potential output by 0.4% over 10 years
- ✓Addressing skills mismatch to OECD best practice could increase average labour productivity by 5% (OECD analysis)
- ✓If UK matched Germany's management investment over past decades, GDP would be £127 billion higher; closing gap over next 10 years worth £76 billion
- ✓If public sector productivity had kept pace with private sector 2019-2024, UK GDP would be 3% (£80 billion) larger
Evidence Against Reform
- ✗Some evidence Brexit impact on productivity disputed -productivity growth has remained close to post-2008 trend since 2016 with no significant additional slowdown visible
- ✗Recent productivity data shows improvement: Q3 2025 up 1.1% year-on-year, 2.3% above pre-pandemic levels, suggesting natural recovery may be occurring
- ✗Business investment rose 1.9% in Q3 2024 and is 5.8% above year ago without major new interventions, questioning need for dramatic policy shifts
- ✗Multi-factor productivity measurement challenges during/after pandemic make it difficult to assess true state and effectiveness of interventions
- ✗Fiscal constraints make large-scale public investment difficult -OBR notes lower productivity forecasts mean £16 billion lower tax receipts by 2029-30, tightening available resources
Contested Claims
- ?Reliability of OBR/Bank of England productivity forecasts: Institutional sources have over-predicted productivity recovery every year 2010-2024 (forecast 1.8-2.2%, actual 0.6%). Critics argue their demand-side models systematically miss supply-side constraints (regulation, planning, zombie firms). Defenders note forecasting is inherently difficult post-crisis and models have improved. Key question: should current OBR forecast of 1.25% by 2029 be believed given 15-year track record of over-optimism?
- ?Brexit's productivity impact: Studies estimate 3-4% lower productivity by 2025 due to Brexit, but some analysts argue slowdown long predates 2016 referendum with no significant additional trend break visible
- ?Whether productivity problem is primarily demand-side vs supply-side: Bank of England notes recent demand slowdown but 'very weak' potential productivity suggests supply constraints dominate. Supply-side economists argue planning/regulatory barriers block investment regardless of demand; demand-side economists argue weak demand discourages investment. Evidence: £100bn+ private capital ready to deploy but blocked by planning suggests supply constraints binding.
- ?Scale of management gap: While Bloom/Van Reenen research is influential, some question whether 55% attribution to management practices overstates the case vs other structural factors
- ?Technology diffusion narrative: While only 4% globally have fully integrated AI, this may reflect technology immaturity rather than UK-specific diffusion failure
📅Historical Timeline
Golden age of UK productivity growth averaging 2.2% annually, with manufacturing productivity more than doubling 1999-2019 (106% growth)
Private sector investment begins falling in late 1990s; UK has lowest investment in G7 for almost every year since 1990
Global Financial Crisis triggers UK's deepest post-war recession; productivity rises 20% in 1999-2007 period before crisis hits
Productivity growth collapses from 2.2% to 0.6% annually, beginning the 'productivity puzzle' that persists for 15+ years
Austerity policies begin, greatly weakening public investment; adult education budget cuts begin (down 23% by 2024-25 vs 2009-10)
Policy instability era: 11 growth strategies, 9 business secretaries, 7 chancellors create chronic uncertainty deterring investment
Brexit referendum creates additional uncertainty; private investment stagnates after briefly recovering; debate continues over Brexit's productivity impact (studies show 3-4% lower by 2025, but trend unclear)
Made Smarter programme launches with £147 million, reaching 4,000+ manufacturing SMEs and demonstrating 6.5% revenue and 2.6% productivity improvements
COVID-19 pandemic disrupts productivity measurement; services sector essentially flatlines (-1% growth) while manufacturing struggles with energy prices and input shortages
UK R&D expenditure reaches £70.7 billion (up £12.4 billion since 2018); UK business investment remains lowest in G7 for third consecutive year
April: Major R&D tax relief reforms merge schemes into 20% above-the-line credit; business R&D rises £2.4 billion after two-year decline; UK productivity grows only 6.2% since 2010 vs 10% Eurozone and 15% US
June: Modern Industrial Strategy published with 10-year plan, £250 billion investment secured, Made Smarter expansion to 5,500 more SMEs; Q3 productivity up 1.1% year-on-year but OBR forecasts only 1.25% growth by 2029 vs 2.2% historical norm
💬Expert Perspectives
“Stagnation is a choice -and it's one we've been making for nearly twenty years. 17 years of zero growth has cost £16,000 per person annually.”
“1% vs 3% growth means a 3x richer UK by 2065 for today's kids. This isn't abstract -it's the difference between Britain leading and Britain declining.”
“The UK productivity problem can be summed up in three words: investment, investment, and investment. Or lack thereof.”
“We now have five generations working together in the workplace and the skills that are required to manage these dynamics are not usually being taught by firms.”
“Productivity has been a longstanding challenge for the UK and a major contributor to the subdued levels of economic growth seen in recent years.”
“It is encouraging to see business R&D spending picking up after two difficult years, but the bounceback is fragile and represents an early signal of renewed confidence, not a full turnaround.”
🎯Priority Action Items
PRIORITY 1 - 0% corporation tax on reinvested profits: Stop taxing businesses for investing in growth. Current system rewards dividend extraction and share buybacks. Tax only distributions, not reinvestment. Ireland model proves low rates increase revenue. Source: ASI/IEA fiscal modelling
PRIORITY 2 - 3-year tax holiday for STEM graduates: Zero income tax for first 3 years post-graduation in STEM fields. UK trains world-class engineers/scientists then loses 85,000/year to US. Make Britain the best place in the world to start a STEM career. Cost £2bn/year; return: entire tech economy
PRIORITY 3 - Mandatory 5-year regulation sunset: Every regulation expires unless Parliament explicitly votes to renew. Current 44,000+ pages of regulatory code strangling growth. Target 50% reduction within decade. 1980s deregulation added 1-2% GDP - do it again
Automatic 5-year visa for all UK STEM PhDs: We spend £300K+ training each PhD then deport them to compete against us. No salary threshold, no sponsorship required. Keep the talent we create. Expand to all STEM masters graduates
Cut corporation tax to 15%: Reverse the 19% to 25% hike that was fiscal vandalism. Ireland's 12.5% attracts £billions. Treasury claims lower rates lose revenue are empirically wrong - see Ireland, see Singapore. Investment follows low taxes
Abolish employment tribunals for SMEs under 50 staff: Fear of litigation stops small businesses hiring. Simple severance formula (1 week per year, capped at 12 weeks) replaces complex tribunal system. Large firms keep current protections. Create hiring boom
End stamp duty on commercial property: This tax on business transactions is pure deadweight loss. Commercial property transfers in London alone lose £billions to this tax. Abolish completely to unleash commercial investment
Scale up management training: Add 840,000 trained managers over generation (£76bn productivity gain per CMI research). Require management qualifications for management roles as US does. 55% of UK-US productivity gap is management quality