Raising productivity – a policy all claim to like in general

If we work smarter we can be paid more. That is the simple message  behind the economists’ idea of raising productivity. Today there is plenty of scope to do just this. Robotics, the digital revolution, powerful computers all allow an individual at work to have more machine power at their elbow. More of the drudgery can be done by machine, leaving individuals to do the more interesting things that require talking to clients and customers, making decisions about product and output, and organising production.

The area of the economy that has been most disappointing in the last 20 years for productivity growth has been the public sector. Of course we want quality to rise, and do not wish to scrimp and save on teachers or doctors. That still leaves plenty of scope to run the NHS or the education system more effectively. Quality and efficiency often assist each other. High quality means less waste, getting things right first time, doing things well in a way which  maximises the use of resources.

The productivity problem lies behind why the government must ensure in its directly managed NHS that it gets good value for the extra money. Some of the money should be spent on systems and digital age equipment which makes it easier for trained staff to do their jobs and helps them control and audit the quality of what they do.

Those who see productivity programmes as excuses for cuts and less spending need to be reassured that proper productivity programmes create more worthwhile work, and go with the grain of all staff who want to raise performance.

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113 Comments

  1. R.O'Connor
    Posted July 28, 2018 at 6:26 am | Permalink

    ‘The area of the economy that has been most disappointing in the last 20 years for productivity growth has been the public sector.’

    Tell that to the nurses and doctors who are run ragged to the point of exhaustion due to the year on year spending cuts imposed on them.

    • libertarian
      Posted July 28, 2018 at 2:42 pm | Permalink

      R .O’Conner

      that would be the NHS who’s budget has gone up EVERY single year since it was founded . That would be an organisation that employs 250,000 admin people

      • Lifelogic
        Posted July 28, 2018 at 9:21 pm | Permalink

        And an organisation that has a monopoly and no need to respond to customers.

        It is however true that is does have some excellent and dedicated medical staff. But it is appallingly organised, structured and is hugely inefficient. It seems it kills over 10000 people PA just compared to an average European healthcare system in Cancer care alone. It outcome stats are very poor indeed and that is actually what matters.

    • margaret howard
      Posted July 28, 2018 at 3:49 pm | Permalink

      R.O’Conner

      Meanwhile our hard working MPs, lords and ladies enjoy a nice 6 week break to carry on plotting around a pool in a luxury villa in the South of France.

      Still, seeing the hash they make when they are ‘sitting’ (very apt description) maybe this will be a blessing.

      • Edward2
        Posted July 28, 2018 at 10:21 pm | Permalink

        More lefty fake news from you margaret.
        Name how many of the 635 MP’s and members of the House of Lords are spending six weeks around a luxury pool in the South of France.

    • mancunius
      Posted July 28, 2018 at 5:49 pm | Permalink

      @ R. O’Connor: The ‘doctors and nurses’ bear little responsibility for the managerial waste of resources.
      Complain instead to the Minister of Health, and to the hospital managers: it is they who give, use, waste and mis-allocate the healthcare budgets.
      You might also consider the inevitable results of allowing limitless immigration by low-income workers (or those who declare themselves to be such) who obtain tax credits and other in-work benefits, and accordingly pay little or no net taxation. And don’t tell me they don’t use the NHS (or that they all work for it). Neither of those canards has any substance.

    • Prigger
      Posted July 28, 2018 at 7:47 pm | Permalink

      PS Before anyone attributes right, left, centre to my politics as my perception, forget it. I’m a philosopher of a kind, at least I like to think……I am.
      I’m lucky so far, we usually get shot first in anyone’s revolution

  2. Fedupsoutherner
    Posted July 28, 2018 at 6:34 am | Permalink

    Efficient? The public sector and civil service are the biggest wasters of money I can think of. I have worked in both public and private. The difference is that in the private sector there is a limited amount if money. It has to be earned and accounted for whereas in the public sector its a bottomless pit. Staff are rarely fired. They may be utterly useless but kept on in another made up post. A friend of mine is off more than she works but still manages to keep her job in the NHS. When I worked for the water authority before it was privatised the expenses bill was truly unbelievable. Nobody cared. The useless were promoted just to get rid of them in the civil service and those that were good in a particular field ( typing) but with brains were kept in post. I left eventually realising I was going nowhere. There has to be a serious attempt to get rid of the dross and at the moment that would be best happening in the government itself right now.

    • getahead
      Posted July 28, 2018 at 4:46 pm | Permalink

      Strong stuff Southerner but well said.

  3. Nig l
    Posted July 28, 2018 at 6:40 am | Permalink

    Correct about poor productivity, wrong it won’t lead to less spending. Well it b well should do.

    As a well respected ex CEO of a PLC I wonder what your investors reaction would be if you told them that taking cost out of their business was not a priority.

    • libertarian
      Posted July 28, 2018 at 2:45 pm | Permalink

      Nig 1

      If the investors had a brain cell they would welcome it. The costs of investment, R&D and new capital equipment are what builds the future . Constant cost cutting eventually leads to a failure of the business. You can’t cut your way to success

      • NigelE
        Posted July 29, 2018 at 9:00 am | Permalink

        But you can also spend your way to failure – by allocating excess funds inappropriately.

        I think Nig 1 was talking about removing unnecessary or excessive costs.

  4. Peter Wood
    Posted July 28, 2018 at 6:40 am | Permalink

    Dr. Redwood,

    With apologies, off topic, but may I suggest a read of the Brexit Central article:
    https://brexitcentral.com/concerned-proposed-withdrawal-agreement/

    Can you confirm that the Withdrawal Agreement will not be legally binding on the UK unless it is approved under the Withdrawal Bill?

    It suggest we are simply wasting time trying for a trade deal before 30-03-19, therefore we MUST, immediately, set our plan to be fully prepared for WTO terms.

    Reply I say dont sign any Withdrawal Agreement 5hat costs us money after March

    • Peter Wood
      Posted July 28, 2018 at 6:49 am | Permalink

      Withdrawal Agreement Bill

      • Hope
        Posted July 28, 2018 at 5:24 pm | Permalink

        It is clear from what Raab said last week the Withdraw Agreement is a trap being used by the EU and May to trap our country into giving away N.Ireland or under the EU permanent control as a vassal state. I wrote last week this MUST be voted down. The EU are desperate to get the U.K. to sign it and it is not linked, legally, to any trade deal.

        May was eager to trap the U.K. into the Irish border sham over her refusal for technology with her July speech. As conservative Home wrote last week either she is very badly advised or she is being willfully misleading. How does this also reflect on Bradley and Brokenshaw the other former N.Ireland secretary? Also the DUP.

        Chequers capitualtion: May wants to give away vast sums, agreed to pay further vast sums to be part of EU agencies without a voice or veto, regulatory alignment i.e. Single market without a voice or veto, under ECJ also under ECHR without a voice. May’s plan is for the U.K. to be a vassal state of the EU legally signed up under an international treaty! The Withdraw Agreement will go a very long way to achieve this unless voted down.

        It is clear this is a disaster and a total betrayal of the referendum vote. May then lies, as did Raab in parliament, to say this keeps faith with the referndum result! Liars. May made it clear in the Lancaster speech and following comments not half in or half out no bits of EU applying or this will not be leaving the EU. May and her team of lying ministers want us to beleive them!

        • Stred
          Posted July 29, 2018 at 9:05 am | Permalink

          May will sign the agreement and trap you and other honest MPs into supporting this or total abandonment of Brexit. She must be got rid of over the summer, before she has the opportunity to complete her plot. Even breaking up the Welching Party would be preferable.

    • mancunius
      Posted July 28, 2018 at 6:40 pm | Permalink

      Reply to JR’s reply: Given the EU’s unhelpful attitude so far, I would rather follow Lord Pearson’s suggestion: cancel the informally agreed payment and our previous undertakings which were made under false premises, and instead:
      1.Guarantee fair treatment for all EU citizens at present in the UK (but with UK and not ECJ guarantees) demand the same fair treatment for our citizens in the EU in return,
      2 *Offer* the EU a FTA and a security agreement (as they will be vulnerably weak without our assistance): they need it, we don’t. If no speedy agreement from the EU, we go to WTO rules. We have the rest of time to deal with the EU after 29 March 2019. We can also point out that Barnier is costing the EU 27, not helping them.
      3. Only if the EU proves immediately cooperative on those points, promise them a contibution up to the end of 2020 – say £10-12bn, no more than that. (After 14 days we should reduce the offered sum, Sybilline fashion, by £1 or £2bn for every week they dally further.)
      At a conference, I recently canvassed a large number of non-political UK professionals of every ethnic background and age-group – they were all sternly in favour of a hard no-deal brexit, on WTO terms.

    • acorn
      Posted July 28, 2018 at 6:54 pm | Permalink

      The UK submitted its cut and paste version of EU schedules to the WTO on the 24th. The EU has adopted a “backstop” tariff quota split (TRQ) agreed with the UK recently, in case of a “no-deal”.

      Eleven (?), including the USA, WTO members have objected so far on the grounds that the UK has submitted the schedules as “Rectifications”. Objecting WTO members say, oh no you don’t; these are “Negotiations”.

      The UK does not have the monopsony power of the worlds largest trading bloc, the EU. WTO members will be trying it on; wanting a bigger TRQ share of the UK market.

      BTW. The “Withdrawal Agreement” that is part of the Article 50 leaving process is an option. It can contain a political statement concerning a possible future relationship but no detail. The detail starts after we have left the EU; not before we have left.

      If we don’t make arrangements to settle our Bar bill when we leave; there will be no Art 50 Withdrawal Agreement and we will automatically have a “no-deal” on everything. The EU will implement all its “backstops” or Trade TRQs and Borders.

      Adopting zero tariffs on everything “Minford style” will wipe out a lot of UK domestic production, that can’t compete with lower import prices. Remember that when we import stuff, we are actually preventing unemployment in the countries we import from. Import tariffs are meant to balance out the unemployment in differing types of economies.

      Zero tariffs will wipe out Welsh sheep farming and Welsh steel production; perhaps Minford should move out of Cardiff University for his own safety.

  5. Eh?
    Posted July 28, 2018 at 6:51 am | Permalink

    “If we work smarter we can be paid more. That is the simple message….
    More of the drudgery can be done by machine, leaving individuals to do the more interesting things .”
    Not noticed it so far.

  6. Lifelogic
    Posted July 28, 2018 at 7:03 am | Permalink

    “The area of the economy that has been most disappointing in the last 20 years for productivity growth has been the public sector.”

    Indeed but most of the public sector are producing nothing of any value anyway so have zero productivity. Many more are just inconveniencing the private sector so have negative productivity.

    If you have a monopoly there is no push to become more productive. So we have the dire NHS, dire schools, an appallingly slow and over expensive legal system, an absurd tax & benefit system, a moronic rubbish collections system….. (£850K just for Sir Cliff Richards legal fees against the BBC the sort of money that could have funded 1000 cataract operations, given an efficient set up, rather than rationing them in the NHS as they do)

    What hits productivity is:-

    Expensive greencrap energy, low investment levels due to other places being more attractive for investment, absurdly complex employment laws, OTT and misdirected health and safely, absurdly high and complex taxes, over restrictive and slow planning, a dreadful, vague, slow and expensive legal system, the state largely wasting 45%+ of GDP, lack of competition in our rip off banking system, gender pay gap reporting drivel, diversity quotas, PC drivel (and the resulting active discrimination against talent), OTT building regulations, a total lack of vision from socialist idiots May and Hammond – possibly even leading to Corbyn/SNP & Venezuela …… in short the government is the problem and this appalling one in particular.

    • Ed Mahony
      Posted July 28, 2018 at 3:18 pm | Permalink

      And by focusing on Christian values, besides work ethic, people are also challenged to:

      1. Have more sense of self-reliance (and saving hugely – billions – on the social services).
      2. Look after their mental and physical health (reducing hugely – by billions and billions burden on NHS).
      3. Being more family-minded (broken family life can have a HUGE impact on physical and mental health, people not taking responsibility for themselves, and so on – billions saved if we focused more on family values, HUGE reduction in crime, and so on).
      4. With Privilege Comes Responsibility (this would help stop corruption in positions of power).
      5. Sense of Patriotism (this would have profound effect on the many, many who lack love for their country – and this ties all the other public-minded virtues together). Not forgetting how patriotism would give a huge boost to the arts, architecture, national buildings, education, looking after natural world, and so on.

      These values would challenge people at every level of society – lower class, middle class, upper / ruling class. With PROFOUND / HUGE positive effects on our country. Saving BILLIONS. Uniting our country. And people much, much, much happier.

      (And I haven’t even got onto the subject of the profound benefits of traditional Christianity on people bring: 1. Meaning and Purpose in life 2. Not being terrified of death. 3. And its spiritual side – and all the great joy, peace, sense of excitement, humour / cheerfulness that traditional Christianity brings).

      • Ed Mahony
        Posted July 28, 2018 at 3:24 pm | Permalink

        And I say traditional Christianity, because it is precisely the age-old heresies and modern heresies that have distorted TRUE Christianity and turned it into something dull / boring / inane / ugly / wimpy and so on (in many ways the opposite to true Christianity – the Christianity that gave us Mozart, and the Monarchy, Shakespeare, Parliament, Bach, Jane Austen, Samuel Johnson, Edmund Burke, Guilds, beautiful cathedrals, Leonardo da Vinci, Francis of Assisi, beautiful medieval churches, concept of Just War, the judiciary, STRONG FAMILY LIFE, with a Mum + a Dad, and so on).

    • Cheshire Girl
      Posted July 29, 2018 at 4:04 am | Permalink

      I do wish you wouldn’t keep calling the NHS dire! My Husband recently passed away, and I cant speak more highly of the wonderful staff, who cared for him so lovingly and efficiently. They also took the time to care for my Son and I – nothing was too much trouble through many lonely hours.
      Before that, my Husband had an emergency operation for Cancer, and the NHS staff worked tirelessly to save his life, but it was not to be. They were obviously short staffed for a lot of the time.

      It is at times like this, that one sees the best of the NHS, and this is no thanks to the Politicians, who are making soothing noises while doing precisely nothing about the problems. I thank the staff of the NHS for all they do, under difficult circumstances, often with very little appreciation of their efforts.

      • Stred
        Posted July 29, 2018 at 9:22 am | Permalink

        The short staffing waste and rationing is the dire part, not most of the staff. It’s what you get when it’s a monopoly state provider like Cuba. We have friends and family who have or about to die too, in some cases because of the deliberate delays in diagnosis.

  7. TV addict in rehab
    Posted July 28, 2018 at 7:04 am | Permalink

    Two days of elections in Pakistan on telly. Today we watch with earnest anticipation not the election but the preparation of elections in Zimbabwe. Very interesting.
    The majority of us should not have to pay a licence fee for TV. But receive compensation.

  8. Lifelogic
    Posted July 28, 2018 at 7:15 am | Permalink

    IT and recorded lectures & videos can actually can give massive savings and improvement in quality of education. One lecture/lesson can by watched by millions rather than say 20. Computer tests can ensure it has been understood properly for example almost free. Yet we have seen very little improvement from state schools and universities in productivity. Why would they bother they have a monopoly?

    The state has taken the money off people in taxation and they get whatever second rate rubbish they are given?

    • Dennis
      Posted July 28, 2018 at 4:34 pm | Permalink

      I have been wondering if Melvyn Bragg’s BBC ‘In Our Time’ is used in schools – very educational.

  9. DUNCAN
    Posted July 28, 2018 at 7:17 am | Permalink

    I see little point in trotting out the same old mantras about improving public sector productivity through increased investment in technologies designed to improve outcomes for the end-user.

    The public sector is politicised and has been for many decades. That politicisation means one thing, a complete lack of concern for productivity.

    John’s pandering to the public sector vested interest is now typical of the spineless Tory party. A party that’s rejected reform because reform involves conflict with the unions. The end result is inefficiencies galore and ever increasing costs for the taxpayer to finance bankrupt public sector organisations whose primary concern are :

    -Expanding their remit as a pretext to expand their budget year on year

    -Protecting their privileged political position and expanding their political influence through threats and propaganda

    -Ensuring all employees enjoy gold-plated privileges financed by the average private sector employee whose productivity must continually improve to finance the total lack of productivity of the state entities they are expected to finance

    Labour’s client state politics has now become the Tories prison and the taxpayer’s infinite burden

    There’s only way that the taxpayer can respond and that’s by adjusting his behaviour to counteract the ever increasing and arrogant demands placed upon him by a State that is now wholly unaccountable, petulant and beyond reform

    Under May, democracy and democratic accountability is slowly being strangled. The Civil Service and a political clique are now our masters.

    Moreover, under Corbyn democracy will be re-engineered to ensure absolute unaccountability

    No longer can we can’t look to the two main parties for necessary solutions.

    British democracy is at a dead end.

    It seems Mandelson was correct in his”………….assertion that we are entering a ‘post democratic age’.

    • Hope
      Posted July 28, 2018 at 5:38 pm | Permalink

      I prefer the quote about democratic representation is gone under EU rule. The police commissioners and Mayors were introduced as a facade to make the public think votes matters when it is of no consequence to how our country is governed or ruled.

      May has introduced policies that would never get past the public in their current forms. Without a mandate or Queens speech she introduced gay marriage without society having a voice. The same for her Snooper charter, EAW, HMRC secret investigations and raid on your account, all without judicial process. She is underhand and completely untrustworthy. Hence her secret white paper, her meeting at night to capitualte to the EU and spring it upon the DUP at the last possible moment until caught out by the DUP in December. It is her underhand MO.

      Tory party failed England’s right for its own parliament. We are the only country in the U.K. not to have a democratic voice in the UK national parliament! We have no representation and any voice by our MPs is restricted and limited to intervention by the other nation states while ther is no reciprocosity in their parliaments.

      Cameron said on TV on the steps of Dowining Street that only a Tory party would deliver EVEL, one in a long list of lies.

      What,we,are currently witnessing over Brexit is a national disgrace and act against electoral democracy. This Govt is ignoring and thwarting the will and vote of the people. Those who support May are as bad as May.

  10. Stred
    Posted July 28, 2018 at 7:21 am | Permalink

    The UK will need to develop robots which will be able to pick potatoes and other vegetables and fruit, as cheap EU labour disappears and we are unable to find replacements in the UK from the younger generation. They seem to want jobs which are less strenuous and allow the continuous use of smartphones.

    • Simon Coleman
      Posted July 28, 2018 at 9:43 pm | Permalink

      I don’t see any evidence that the younger generation want cushy jobs – where are such jobs anyway? Farm work, though important work, doesn’t pay that well. Smartphones are just part of today’s culture – in and out of work.

  11. Edward2
    Posted July 28, 2018 at 7:22 am | Permalink

    Measuring productivity is an innacurate science.
    Yet it is the latest and most fashionable statistic, seen as something we must improve.
    Three examples
    How do you measure the productivity of a police officer?
    If he or she responds to 999 calls then an increase in the number of calls responded to will be seen as improved productivity.
    But just patrolling an area and then no crime happens as a result of preventive policing is seen as a productivity failure.
    Say I was contemplating running a car wash.
    I could employ 20 young people on minimum wage and invest in a few buckets sponges and a few jet wash machines.
    Or I could invest several hundred pounds in a fully automatic car washing machine and employ no one.
    The second scenario is great for productivity statistics.
    But what about the zero productivity of the 20 young people who now are doing nothing?
    Take a farmer with crops and fruits to plant and harvest.
    Do you employ readily available gangs of minimum wage labourers or do you invest big sums in automated machinery?
    One minute government is telling employers to employ more people to reduce unemployment because that is the most important thing, now it is saying the key performance indicator is productivity.

    • Edward2
      Posted July 28, 2018 at 7:24 am | Permalink

      Typo
      Several hundred THOUSAND pounds

  12. agricola
    Posted July 28, 2018 at 7:24 am | Permalink

    Lack of productivity in the private sector makes you vulnerable to the competition and you go bust. Lack of productivity in the public sector leads to demands for more money due to the inefficient spending of the money already allocated. Do not expect slick management from anything the government is involved in. Government only knows how to spend money, other peoples, always making sure that nothing is left at the end of the accounting period. Reason, anything left would be deducted from what they got for the next accounting period.
    There are two solutions. One, you make the civil service commercially astute, fat chance of that lot dirtying their hands in trade. Two, you privatise, but government does not have the stomach for that. In reality you muddle along with warped train rails, melted roads, blocked tunnels through lack of air conditioning, lack of water, clogged hospitals et al. Welcome to 18th century England, organised to keep the public sector fat in salaries, pensions and knighthoods.

  13. alan jutson
    Posted July 28, 2018 at 7:26 am | Permalink

    Whilst I agree with much of what you say John, the Government and large computer contracts is hardly a success story is it.
    Indeed it is a record of almost complete failure, with in almost every case either outright failure, huge additional overspend, or limited success/usage.

    Perhaps we should first examine why almost every Government contract is plagued with massive cost overruns, delay’s and underperformance, from ships, to aircraft, to trains, to a whole range of computer systems, which often seem unfit for purpose.

  14. Steve
    Posted July 28, 2018 at 7:28 am | Permalink

    Public sector, now that’s an interesting one.

    The problem here is that those in publicly funded office i.e. local authority for example, these days refuse to accept that they are there to ‘serve’ the tax paying public.

    Working for the local council is all about being politically aligned, political correctness, juicy pensions and so on. Not to mention lazy arsed attitude.

    Their aim is not to serve, but to get themselves the best retirement.

    I wouldn’t give these monkeys any productivity plan, just rout them from office.

    A better idea would be to take the pensions away, then over time they’d tend to be replaced with those of lesser self serving interests.

    • getahead
      Posted July 28, 2018 at 5:59 pm | Permalink

      Steve, it seems to me that most public sector pension funds are in deficit. Increasing deficit that is. It can’t last forever. Eventually the milch cow will die.

    • Simon Coleman
      Posted July 28, 2018 at 10:01 pm | Permalink

      This is just cynical, ignorant and stupid. It all comes from the war against the public sector started by Thatcher. Successive Tory governments tried to erode the whole idea of public service and a lot of damage has been done. The fact that pensions exist in the public sector doesn’t prove that 1) the staff are lazy, 2) that, overall, there are significantly higher financial rewards than in the private sector. Providing a service is still one of the major elements in creating job satisfaction. People still enjoy doing it. And being in a job which isn’t about making money keeps workers free from a particular form of stress which affects many in the private sector.

  15. Ian wragg
    Posted July 28, 2018 at 7:36 am | Permalink

    Why would anyone invest in robotics when you continue to import half a million immigrants yearly annually
    I see the USA is booming at 4.5% despite all the prediction of economists.
    Why is May continuing with the discredited Chequers paper when it’s been so roundly trashed.
    She is now agreeing to a level playing field with the EU in the withdrawal agreement. Shadowing all EU legislation so as not to be in competition.
    Roll on a Trump figure who will put Britain first.

    • Hope
      Posted July 28, 2018 at 5:45 pm | Permalink

      Ian, It is far worse than you suggest. The Withdraw Agreement is a trap for the U.K. and binds the U.K. from leaving the EU. It helps make the U.K. A vassal state to t EU. May was deceitful in her July speech about the Irish border. She does not want a solution because the U.K. Could leave the EU with a clean break, she does not want this. As written in conservative home and in Brexit central article referred to above, she was either very badly advised or willfully misleading. With two N. Ireland secretaries in cabinet hard to beleive badly advised.

    • Chris
      Posted July 28, 2018 at 9:30 pm | Permalink

      …and Tory MPs are letting her do it.

  16. Sakara Gold
    Posted July 28, 2018 at 7:38 am | Permalink

    There have been productivity increases in many areas of public service. That is why it takes 3 weeks to get an appointment at the GP surgery, or one has to wait months for an urgent operation on the NHS – the doctors are seeing more patients but their numbers remain the same or less. Teachers become more productive if classroom sizes increase..

    The area where the country needs real improvements in productivity is in the civil service – this is now gigantic in the UK. The UK workforce currently totals around 32.3 million, of which about 17% (5.4 million) work in the public sector, of which around 1.3% – 427,000 – are in the civil service.

    The number employed by the civil service is now 4% higher than its minimum in 2016, but is still 25% down on its most recent peak in 2005. The drop was caused as blue collar civil servants jobs were outsourced, however most of them are still “in post” having been TUPE’d over to private sector outsourcing companies and so are still being paid for by the state.

    Civil servants come up with some unbelivable white elephant ideas for “efficiencies” such as the compulsory introduction of “smart meters” which dont work, the installation of the wrong engines in our new destroyers, using obsolete nuclear reactors/gearboxes in our new hunter killer submarines, selling off major assets such as HMS Ocean shortly after expensive refits, the list is endless. If we want to save money and become more productive we should deal with this issue

    • Original Richard
      Posted July 28, 2018 at 7:39 pm | Permalink

      You’re right about the failings of the civil service, an organisation which has become politicised, and where it seems no-one ever gets the sack for wrongdoing or incompetence.

  17. The Prangwizard
    Posted July 28, 2018 at 7:40 am | Permalink

    As long as government and your party favours and encourages mass immigration there will be no improvement in ‘productivity’. The availability of relatively cheap and plentiful labour works directly against it. Short-sighted and weak management will pay for more cheap people rather than buy a new machine and work to reorganise throughput.

    I prefer the phrase ‘productive efficiency’. Increasing production by the same old methods having taken on extra labour is a delusion about a country’s or a business’s efficiency and that is what the piece is I think meant to be about.

    • Timaction
      Posted July 28, 2018 at 4:35 pm | Permalink

      Mostly importing minimum wage workers who then cost the English tax payer £3000 each in health, housing, education and in and out of work tax credits/family allowances. No wonder the Corporate’s and large enterprises want us to subsidise their workers wages! The Tory’s have had 8 years to get immigration down, especially those from outside the EU who make up the lions share of immigration. As Osbrown said, they don’t really care about immigration as it doesn’t effect their health waiting times or quality of life, culture, overcrowding, school places etc etc!
      Where’s that action on May’s white paper betrayal?

  18. Richard1
    Posted July 28, 2018 at 7:41 am | Permalink

    I am having difficulty understanding why a no deal Brexit will lead to food and other shortages. Are we expecting a wartime-style trade embargo by the EU? If not presumably EU food and pharmaceutical producers will continue to wish to supply the U.K. market as they do others around the world. We don’t need on our side to hold up imports -on the contrary we should be moving to unilateral free trade as explained by Patrick Minford, and cutting all tariffs to zero. Perhaps Continuity Remain could explain to us what might happen?

    • Dave Andrews
      Posted July 28, 2018 at 2:57 pm | Permalink

      Haven’t you heard? Come next March, if we don’t have a deal with the EU, their hundreds of billions of pounds worth of exports to the UK will immediately stop. So no spares for your BMW or Audi and Renault and Fiat will be unobtainable.

    • Denis Cooper
      Posted July 28, 2018 at 3:18 pm | Permalink

      We’ll see if any of the supermarkets answer my question, see my comment further down the thread, and explain why they expect Theresa May to unnecessarily cause food shortages by ordering intensified border inspections of their food imports from the EU, when there have been no such inspections for a quarter of a century since the advent of the EU Single Market and after we leave the EU their EU suppliers will still be in the EU Single Market and still subject to EU Single Market rules.

  19. Brit
    Posted July 28, 2018 at 7:52 am | Permalink

    Local Authorities spring to mind. Despite the general electorate even Labour voters knowing
    LAs have a major all-consuming productivity and money waste problem, nothing changes.

    The government just divides huge boxes of money marked Spend Me into bite-sized ones marked Spend Me…and sends it to them awarding OBEs and knighthoods to them for knocking down functional buildings and rebuilding them OR in my region chopping down trees and planting new ones to “protect the environment”. The mini-box was titled “For Trees…Spend Me”

  20. David Cockburn
    Posted July 28, 2018 at 7:57 am | Permalink

    Maybe one reason public sector productivity is so poor is that there’s a reluctance to make big long term capital investments, preferring to spend money from year to year. They seem to see it as an employment project rather than a way of getting things done using as few employees as possible. Can someone who has worked in the public sector tell me if this is the way it really is?

  21. Andy
    Posted July 28, 2018 at 8:16 am | Permalink

    Let’s look at Parliament.

    Pretty much everyone in the country has a mobile phone and / or email. Yet some MPs – Jacob Rees-Mogg for example – insist only on responding to queries by post. What a waste of paper and stamps.

    And why are MPs – like ?? – still allowed to employ family members. Outrageous.

    MPs could vote electronically – and even remotely. Instead they have to traipse through Parliament, wasting time and giving some less honourable members the opportunity to cheat by – for example – pretending to pair with MPs on maternity leave but then scrapping that agreement.

    Parliament could also be more productive if MPs like Sir Christopher Chope were not allowed to waste time disrupting private member’s bills on a pointless point of principle.

    No other public service is as wasteful as Parliament. What about constituency surgeries via Skype? Or vacating the expensive Palace of Westminster and getting you all to work from Portakabins in Rochdale.

    Demands for more productive public services carry more weight when MPs, literally, get their own shockingly inefficient house in order.

    • Edward2
      Posted July 28, 2018 at 2:46 pm | Permalink

      Many self employed people and many small business owners employ spouses or other family members to help in their day to day running of their business.
      Why not MP’s?

      • Dennis
        Posted July 28, 2018 at 4:49 pm | Permalink

        Edward2 – because the salaries are paid for by the taxpayer and not the MP’s
        own salary.

        • Edward2
          Posted July 29, 2018 at 6:42 am | Permalink

          I don’t see why that makes a difference.
          MP’s often need to employ staff to help them.
          What difference does it make if a non family member gets paid by the taxpayer?
          Presumably you would object to friends of an MP doing the job as well.

      • hefner
        Posted July 28, 2018 at 5:56 pm | Permalink

        Mr Trump has both his daughter and son-in-law as advisors, so where is the problem?

      • getahead
        Posted July 28, 2018 at 6:24 pm | Permalink

        MPs are not a business. Let them do their own typing.

        • Edward2
          Posted July 29, 2018 at 9:09 am | Permalink

          A typical MP needs staff to help run a busy office.
          Correspondence from constituents can be hundreds of items a week.
          You try dealing with on your own and see how you get on.

        • Prigger
          Posted July 29, 2018 at 9:48 am | Permalink

          “MPs are not a business. Let them do their own typing.”

          Because they may not have time to furnish you with a blog so you can criticise them openly one to one for all the world to see…ALL MPs have a blog like this of course as you know

          BTW. No doubt their typists as you call these machine workers who sometimes get trigger finger and associated psychosomatic ailments just as painful as ordinary ailments because of repetitious work actually work very hard

    • mancunius
      Posted July 28, 2018 at 7:03 pm | Permalink

      As usual, a swathe of non sequitur emoting:

      “some MPs – Jacob Rees-Mogg for example – insist only on responding to queries by post.” JRM has of course a parliamentary email address, as you must know. He is content to receive your letter by email and make himself responsible for the security of his own email system. For data protection reasons he (like your bank, GP or hospital doctor) will not reply to you by email as he cannot know or guarantee the security of your own computer, and he cannot confirm that your personal and address details are correct except by postal communication.

      “MPs could vote electronically – and even remotely”
      i.e. vote according to personal prejudice or in blind obedience to the whip, without listening to or participating in the debate.

      “waste time disrupting private member’s bills on a pointless point of principle.”
      The important and arguably valid principle is that no government should be allowed to sneak through bills it wilfully decides to sponsor, under the disguise of PMBs. I wish there were more MPs who understood that legislation is not in itself a public good. (Apart from the fact that the proposed bill would as drafted be virtually impossible to police and legally unenforceable. But hey, who cares when virtue-signalling is the only game in town.)

      The MPs of both political parties are committing electoral fraud by ratting wholesale on their manifesto promises. And all you can find to criticise is that some may be employing members of their family in their offices. Pathetic.

    • Richard1
      Posted July 28, 2018 at 7:23 pm | Permalink

      Hats off to sir c chope for stopping a new law, under which people could have been imprisoned, without any parliamentary scrutiny or debate – almost as if it had been handed down from the EU!

      I think we want MPs showing up and participating to vote, as if they were members of a board. Don’t want them sitting a table home watiching TV, playing with their kids and sending in votes by email.

  22. Sir Joe Soap
    Posted July 28, 2018 at 8:18 am | Permalink

    Yes, but we can’t keep saying this year after year and nothing happens. The whole ethos of the NHS is wrong. It appears not to worry too much about the fate of patients and worries greatly about its staff and self-preservation.
    In that it is akin to Mrs May and her so-called Brexit plan. it’s all about self-preservation and trying to meet a set of rules that the customer has already turned down.

    In each area, the only way forward is to tear up the rules and start again.
    The day the NHS starts to use Amazon-like systems of e-mail to ensure patients are kept informed is the day it starts to become efficient.
    The day May tears up her Brexit “plan”, resigns and lets a competent team take over is the day we can start again as a nation.

  23. Denis Cooper
    Posted July 28, 2018 at 8:21 am | Permalink

    Well, I’m not an economist but even if I was an economist I’m not sure that I would really understand these things much better than I do now. No doubt I would be more familiar with the detailed jargon and with the various theoretical models but that would not mean that my real, useful, understanding would be significantly better than it is now.

    The UK Treasury is stuffed full of some of the best economists in the world, allegedly, and yet they forecast an immediate recession if we even had the temerity to vote to leave the EU, with a loss of GDP of up to 6% over the following two years:

    https://www.bbc.co.uk/news/uk-politics-eu-referendum-36355564

    and yet here we are those two years later and there was no recession and GDP is up not down, and up about 10% higher than they predicted.

    Yet this Remain-dominated Theresa May government has allowed credence to be given to new editions of the same unreliable doomladen forecasts and has not even done anything to track down and punish those who leaked those confidential studies.

    As I say I don’t really understand these things but I do note that according to the data collected in the table here:

    https://www.measuringworth.com/datasets/ukgdpir/result.php

    literally over my lifetime the UK economy has expanded by a factor of 5.7 in real terms, and adjusted for population growth that becomes a factor of 4.3 on a per capita basis, which work out as averages of 2.55% and 2.14% per year compound growth.

    Now I know that hardly any of that economic growth and improvement in productivity can be attributed to our participation in the EEC/EC/EU/USE project, not least because that has been indirectly conceded in the EU’s own reports including in a 2012 report by the EU’s chief negotiator Michel Barnier:

    http://johnredwoodsdiary.com/2018/06/18/health-spending-tax-and-that-brexit-dividend/#comment-941411

    And I suspect that not much of it has come from liberalisation of world trade in general, given the very small gains now being predicted for even large scale trade deals:

    http://johnredwoodsdiary.com/2018/07/18/trade-is-mainly-about-companies-and-individuals-not-governments/#comment-948420

    So I have to assume that the increase in national prosperity over my lifetime should be attributed mainly to our native intelligence and our willingness to innovate, rather than to the openness of our economy to international trade as some prefer to emphasise for their own disreputable political reasons, and the limit to those natural growth effects seems to average out at a somewhat above the 2% a year level.

  24. Adam
    Posted July 28, 2018 at 8:23 am | Permalink

    People congestion reduces productivity. Too many do little of any use.

    • mancunius
      Posted July 28, 2018 at 7:06 pm | Permalink

      Quite, Adam. And so convenient to large companies who want to pay low wages, high dividends, and not reinvest – and so helpful to the bonuses of their directors…;-)

  25. Pragmatist
    Posted July 28, 2018 at 8:23 am | Permalink

    “… proper productivity programmes create more worthwhile work,.” Well they shouldn’t!!!

    When I give my lawnmower, spade and hedge trimmer to my five and six year olds I don’t intend my wife having another mouth for me to feed just so everything will come up roses.

  26. Sir Joe Soap
    Posted July 28, 2018 at 8:25 am | Permalink

    On the topic of Brexit, at least we are sorting the wheat from the chaff in the Tory party now, or infact the chaff are self-selecting. Sarah Wollaston, that staunch Conservative, has now openly admitted she wants taxes to rise from where they are now.

    The tide is going out now, and MPs like this who were pretending to be Leavers and tax-cutters under the blue sea cover of that nice Mr Cameron are now shown to be dressed in red. There needs to be a true blue UKIP PPCs appointed in their constituencies forthwith.

    • Timaction
      Posted July 28, 2018 at 4:42 pm | Permalink

      Indeed. That’s why many of us realised a few years ago that essentially the legacy parties are interchangeable. Soubery could easily be in the Lib Dums, as could Ken Clarke and Ms Woolaston, Grieve etc. Former Tory Minister Nicky Morgan, more a socialist than Conservative as is weak and wobbly Maybot. Etc

  27. Alison
    Posted July 28, 2018 at 8:28 am | Permalink

    Good morning. Before a comment on productivity, may I go off topic (fury again). It is damning. Here is a quote from the BBC new website, about Mrs May’s meeting with Mr. Kurz in Austria – please note the pronouns that Mrs May uses:
    “Mrs May hailed the strength of the UK’s relationship with Austria, adding: “We are delivering on a vote of the British people, they chose to leave the EU and we will deliver that.” ” We … THEY chose to leave .. we will deliver that.

    Re productivity, I think the level of basic skills of pupils as they leave education is a factor in productivity (three Rs, basic thinking ). Also it seems to me that there is a proportion of employees who just do not care about the jobs they hold, and therefore they do not care about the quality of the work they perform. So work has to be re-done, as our host says, or problems arise down the chain,. And I think there is a responsibility on the part of employers to try to engage employees in the endeavour, in the production, in the service being provided.

    etc ed

  28. Mark B
    Posted July 28, 2018 at 8:38 am | Permalink

    Good morning

    Our kind host speaks as someone who, rather uncharacteristically for Secretaries of State, actually gave money back to the Treasury. I do not know about anyone else but, it would make a good article to read as to how he achieved this feat.

    We have been banging on about the paperless office and more leisure time for decades. From my experience efficiency is passed on to the consumer and the shareholders. I work as hard, if not harder, then before.

    In order to achieve better productivity there has to be some sort of incentive. In a monopolized industry, whether it be in the public or private sector there is little incentive to achieve this, and so, no gain.

    The public sector is heavily unionised. Anything that may reduce personnel and therefore money to unions is resisted. Competition is especially resisted in areas where their writ runs strong such as the NHS via Labour.

    The one area where the populace would benefit enormously, and this has been shown up recently by some posters here, is that of choice when it comes to political parties. Currently the electorate has little choice, not with the number of parties but, policies. When the EU has control over so many areas of policy domestic political parties scramble around to find things to make them look relevant. e.g. sugar tax etc. We are also hostage to both marginal and the HoL. Marginal are all that matter in GE’s and the HoL stuffed full with political self interest will never reflect the democratic will.

    To remedy the aforementioned there needs to be change. Political parties need to compete in more constituencies and the HoL needs to be abolished and replaced with an elected chamber, preferably with PR.

    • Original Richard
      Posted July 28, 2018 at 7:52 pm | Permalink

      I have no problem with the HoL being appointed but at each GE the whole HoL should be dissolved and the Lords for the next Parliament should be (re-)appointed by each political party with the numbers allowed for each party to be in proportion to the votes cast for that party at the GE and include those parties who did not manage to win a seat in the HoC.

      • Mark B
        Posted July 29, 2018 at 6:40 pm | Permalink

        Your suggestion although sound does not tackle the self interest and political cronyism in the HoL. You would also be handing power to the political class and not the people.

  29. Denis Cooper
    Posted July 28, 2018 at 9:03 am | Permalink

    Off-topic, this weekend I will do something the government should have done long ago during the past two years, rather than allowing and encouraging more scare stories to be spread in the hope that we can be frightened into changing our minds about leaving the EU. Namely, I will email the main supermarket chains and ask them to confirm that they intend to maintain their existing or equivalent standards for the food they sell after we have left the EU, and in particular that they will not seek to import any food from the EU which does not meet all EU standards, even if that would be permissible under EU law which I very much doubt. In which case, logically there will be no more need for the UK authorities to intercept and check their food imports than there is now, and nobody need worry about those mythical endless queues of trucks with their loads spoiling – at least, not on our side. And that is what the supermarket bosses should have been saying to the government, rather than interfering in our democratic process by trying to overturn the referendum and keep us in the EU.

  30. Wessexboy
    Posted July 28, 2018 at 9:32 am | Permalink

    I have recently retired, having spent the last ten years or so of my working life within the NHS. I witnessed during that period the transition from typed pro-forma Care Plans with the patients name written in and various deletions or tick-boxes to edit, to computer generated alternatives. In theory these should have been quicker and more easily done. However, the combined level of computer skills and written English made a mockery of this notion. Nurses spend ever more time at computers, and less with the patient. This also leads to ‘just checking Facebook, oh and personal emails’ etc.
    Most of the very best nurses I observed sought and gained promotion to jobs which took them further from patient care. Many nurses need to be overseen and helped by those familiar with this problem. Unfortunately technology alone can have negative side effects.
    Alongside that is the procurement issue. Who knows what will work and how to get it at a sensible price.

  31. Denis Cooper
    Posted July 28, 2018 at 9:38 am | Permalink

    JR, what is this nonsense?

    Is there no way that Tory MPs with an ounce of common sense can put a stop to this idiocy?

    https://www.thesun.co.uk/news/6883535/irish-hard-border-inescapable-no-deal-brexit-scenario/

    “Britain set to warn EU that an Irish hard border is ‘inescapable’ in a No-Deal Brexit scenario”

    “Brexit officials are planning to make the stark warning to their EU counterparts to jolt negotiations”

    Why? Who is going to create that “hard border”, and for what reasons?

    Do these “Brexit officials” think that everybody else in the world is stupid?

    • alan jutson
      Posted July 28, 2018 at 4:06 pm | Permalink

      Dennis

      It is Mrs May’s supporters, getting very desperate, Simple as that.

      Why else would Raab say to the EU, you will push us into a no deal if you keep pushing, indicating he doesn’t want a no deal/WTO deal either, he would rather sign something, almost anything, rather than walk away.

      What a Clown !

      What he should be saying, if he really wanted that Chequers deal done is, its this or WTO, what would you prefer.

      Just out of interest, I see that David Davis today is now suggesting that he has had an alternative plan all along which may have been a solution to the deadlock, but Mrs May would not listen, apparently it is being suggested its all been prepared already.

      Apparently based on Canada Plus, plus, plus, with all points already agreed by the EU with other non EU Countries, so why not us !

      Are you aware John, or was this deliberately kept under wraps.

      Reply I have always said there are just 2 options – No deal or comprehensive free trade deal like the Canada one. I have always told govt to table a FTA, based on Canada deal. I have also said no need to pay for it!

      • Denis Cooper
        Posted July 28, 2018 at 5:20 pm | Permalink

        Well, given the extreme attitude of Michel Barnier I think it would be wise to plan for no deal at all about anything, as I try to explain in this week’s offering to our local paper, but make damn sure that the rest of the world understands who is to blame for the problems that would cause.

        “Dear Sir

        I expected the EU chief negotiator Michel Barnier to reject the UK government’s daft proposal that we should carry on collecting customs duties for the EU even after we had left.

        At present we and the other EU member states collect those EU Common External Tariff duties on behalf of the EU, and we are allowed to keep 20% to cover collection costs; but in a sad effort to cling to what she no doubt sees as a happier past our Prime Minister proposed that we should carry on doing the EU that unusual favour, albeit in the latest version only for any goods which were just passing through our territory on their way to some part of the EU.

        However the most interesting part is the reason that M Barnier gave. He could have just said that the scheme was too complex, and might not be workable, and anyway he saw no point in it; but instead he effectively said that he could not trust us to continue to do it properly once we had left the EU and so we were no longer “subject to the EU’s governance structures”.

        That is to say, once we were no longer under the thumb of the EU Commission, backed up by the EU’s Court of Justice; and on that basis it may reasonably be asked if the EU will ever trust us to faithfully perform any deal about anything, or they will always insist that even outside the EU we must accept continued supervision by the EU institutions.”

      • mancunius
        Posted July 28, 2018 at 6:01 pm | Permalink

        The Chequers deal should never be even considered for a moment as any option at all. The EU is too crafty to reject it – they will simply use it as the thin end of a wedge – towards a Customs Union and Single Market status for the UK, which I believe is how it was planned by Merkel and May.

        We can only hope the HoC rejects the Chequers/White Paper plan (let alone any EU variant of it) in any shape or form. But having followed the recent debates in detail, I despair of most of our MPs – most have a craven cultural cringe towards Brussels.

      • alan jutson
        Posted July 28, 2018 at 7:32 pm | Permalink

        Reply-Reply

        Thank you for your response.

        Which begs the Question, why on earth is Mrs May proposing the silly arrangement she has put forward, instead of a more sensible one, that most could agree to.

        Does she have a wish of self destruction for both herself, and the UK !!!

      • Richard1
        Posted July 28, 2018 at 9:05 pm | Permalink

        It is reported that on March 7 mr Tusk offered such a canada+ deal to Mrs May but for some reason it wasn’t taken up. Is that right & if so can it be resurrected?

        • alan jutson
          Posted July 29, 2018 at 10:27 am | Permalink

          Richard

          I simply think another agenda is in progress with Mrs May, and lengthy Brexit negotiations is a good smokescreen, to hide as far as possible her yet to be outlined real wishes, which is probably not to leave at all.

          Given Mrs May is giving so much ground to the EU with more to come, we will be controlled members in everything but name given her stance.

          The way David Davis (who has commercial experience) has been sidelined, and overruled time after time by Mrs May and her so called personal advisor, Oily Robbins, should give us a clue.

  32. Posted July 28, 2018 at 9:44 am | Permalink

    In the US twenty-seven million get the Earned Income Tax Credit, because they hold low-wage or come-and-go jobs. Another several million get unemployment insurance—in a good year. Forty million or so get food stamps—it was over seventy million in the 2008 crisis. How many millions take Social Security early or have applied for disability because they couldn’t find work? The public payroll pays a lot of people for not working. Much of this “burden”—not all, but a lot—would shrink

    It will cost less to introduce the Job Guarentee and never mind the cost of social issues that unemployment causes. Crimes, Jails, family break up and mental health problems.

    Between 1935 and 1943, the WPA literally built the infrastructure of modern America, including 572,000 miles of rural roads, 67,000 miles of urban streets, 122,000 bridges, 1,000 tunnels, 1,050 fifty airfields, and 4,000 airport buildings. It also constructed 500 water treatment plants, 1,800 pumping stations, 19,700 miles of water mains, 1,500 sewage treatment plants, 24,000 miles of sewers and storm drains, 36,900 schools, 2,552 hospitals, 2,700 firehouses, and nearly 20,000 county, state, and local government buildings with unskilled workers. They built modern day America.

    That’s how productive unskilled workers can be.

    • Edward2
      Posted July 28, 2018 at 6:44 pm | Permalink

      How productive are an army of unskilled labourers versus a fleet of JCB’s?

  33. acorn
    Posted July 28, 2018 at 9:44 am | Permalink

    Over the last three decades, Labour’s share of Gross National Income (GNI), has been steadily dropping. The share going to Capital increasing.

    Capital’s greater share could have been used to invest; mechanise; digitise, and increase output per worker and hopefully the number of better skilled, better paid workers generally. This has not happened.

    Investment as a share of GNI has dropped considerably, especially since the 2008 credit implosion courtesy of the western Banksters. Corporations have been stashing “Cash Reserves”; mostly off-shore, to avoid Corporation Tax if they take it back home.

    Taxes; Savings and Imports, are the ways to take the government’s money out of the domestic economy and reduce domestic, public and private sector, spending power. Off shore cash reserves are savings avoiding Corporation Tax. Which is why I said yesterday that Corporation Tax is the wrong tax in the wrong place.

    • hefner
      Posted July 28, 2018 at 3:26 pm | Permalink

      According to a MSCI report, Datastream, as of 31 December 2017, the proportion of earnings distributed as shareholder dividends in 2017 (the payout ratio) is 31% for Japanese companies, 45% for US ones, 49 and 50 German and NL companies, … but 82% for UK companies. So is it surprising that UK companies do not modernise as much as their competitors? and could that be related (at least partly) to the UK rather low (compared to competition) private sector productivity?
      About public sector productivity, I was expecting more from JR telling us how exactly to improve the productivity of the police, justice, military, education and health sectors.

      • Hope
        Posted July 28, 2018 at 5:59 pm | Permalink

        How would you measure such productivity in these services?

        • hefner
          Posted July 29, 2018 at 7:47 am | Permalink

          That’s my point, Hope. If JR keeps harping on public sector’s low productivity, he should provide some ideas on how to increase it, and if possible something more thought-out than more computers in offices.
          BTW, what is the productivity of a Member of Parliament?

          • Timaction
            Posted July 29, 2018 at 10:35 am | Permalink

            Indeed. In most cases not value for money!

        • acorn
          Posted July 29, 2018 at 10:29 am | Permalink

          Its called Quality Adjusted Price Model. It attempts to combine the quality improvement of a good or service, with its market price over time. ONS does a version called QALI for labour input.

          Sadly, this government thinks the Social economy, works the same way as the widget making Market economy. Like it still thinks the currency in on the Gold Standard.

          Have a read of https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/bulletins/labourproductivity/januarytomarch2018

          Particularly Fig 1: Output per hour and output per worker. This chart is identical to the GDP chart. AUSTERITY does that to a fragile economy.

          At the very moment when the country needed a massive injection of government spending, Osborne did the exact opposite and Hammond has continued so. There is no point in investing for productivity or increased output, if you haven’t got customers with bigger pay packets to spend.

          The only way Hammond can get to a balanced budget is to keep shrinking the real terms economy.

  34. Posted July 28, 2018 at 9:45 am | Permalink

    You mention working smarter as a way to improve productivity. But working smarter is the result of a process with management at the centre. Productivity is the result of four management “skills” (1) selecting the right markets for the use of existing/legacy human and physical capital; (2) selecting promising product/market combinations for investment in human/physical capital; (3) acquiring competitive finance for (2) and (3)and implementing those investment decisions competently; and (4) managing the result of (1) through (4) efficiently on an ongoing basis.

    The role of government is to minimize friction (rules, security, essential gvt services) , to stimulate and provide efficient and up to date infrastructure, to counter trade barriers raised in overseas markets and to maximize domestic industry protection within international rules. The latter must be balanced against the risk that uncompetitive indstries survive that would persih in a hypothetical free trade world. Those industries act as a drag on national productivity. Of course what applies to industry in terms of management skills, also applies to government, except that gvts do not have the same financial constraints (and rewards), have difficulty in determining the exact scope and scale of government providsion required for industry to achieve high productivity (this is at the core of the “industrial policy debate) and may be handicapped by irrational politics.
    Very few countries do this well. The only mature example in Singapore (a country run like a corporation). Very poor government/business combinations exist in some anglo-salon countries and a possibly optimal balance between politics and business each avoiding predation exists in the Nordic countries (excl Iceland) and The Netherlands. Germany comes close.

  35. Posted July 28, 2018 at 9:49 am | Permalink

    The Job Guarantee wage is only paid to people working in Job Guarantee jobs. The more people on the scheme the more government spending. When they move to private sector jobs that payment stops — which automatically reduces government spending.

    It is an ‘auto-stabiliser’. Spending goes up when the economy is down, and spending goes down when the economy is up.

    So because it is carefully targeted at only the people that need it, and it automatically self-adjusts based upon need, there is no requirement to correct any over spend via taxation on the other side.

    The result of that is straightforward. The current low tax rates can stay.

    Not only is it a brilliant automatic stabiliser it is a fantastic price anchor also.

    A crucial point is that the JG does not rely on the government spending at market prices and then exploiting multipliers to achieve full employment which characterises traditional Keynesian pump-priming.

    It forces Capital to compete for Labour the first time in nearly 50 years. Which has the neat side effect of Capital being forced into increased productivity.

    Full employment, brilliant automatic stabiliser and a fantastic price anchor with increased aggregate demand for business and increased productivity.

    What’s not to like ?

  36. bigneil
    Posted July 28, 2018 at 9:53 am | Permalink

    ” More of the drudgery can be done by machine, leaving individuals to do the more interesting things “. Wrong Wrong Wrong. As a working class numpty I can tell you the only thing that happens when something is automated – shop floor staff are got rid of and the rest have to look after the previous workmates workload as well as their own.
    At my workplace I caused a bit of an upset when one of the foremen found out I had a hernia. 30 minutes later I was surrounded by ” concerned ” managers/personnel/ H&S etc who were clearly trying to blame me. They were even more shocked when I told them I had had it for years . I then told them how many of my workmates across the 4 shifts also had hernias ( 25% ). The managers knew of NONE of them.The managerial staff were bleating on about having a ” duty of care ” and in truth were only panicking in case they were blamed and they lost THEIR jobs. I pointed out that NONE of us had hernias when we started there. Absolute panic in officeland.
    Guess what? – NOTHING changed to lighten the workload. In general people who have only ever worked behind a desk have NO concern for the welfare of the manual workers, We are seen as an easily replaceable underclass.

    My hernia is still there, growing slowly. Don’t want the op at my age.

  37. Dave Andrews
    Posted July 28, 2018 at 9:56 am | Permalink

    The NHS is a good example to take, as it is massive. Progress here dwarfs any improvement elsewhere.
    Improve the NHS by making it more competitive against a strengthened private scheme, based on company health insurance. Tax benefits for companies that take them out. Employees elect to opt out of the NHS system, in return for a plan that ensures they get seen quickly, more of a customer rather than a patient.
    Employer’s have an interest in the health of their employees, and insurance companies want to reduce their liability, so early intervention is more likely.
    Public and private health schemes will vie with each other to improve standards and productivity.
    If there is a political problem with the notion of privatising the NHS, call it a cooperative system to improve employees’ working conditions. That might placate the socialists.

    • Mark B
      Posted July 28, 2018 at 5:21 pm | Permalink

      Exactly!

      Make the NHS compete for my money.

  38. Ghost of JB
    Posted July 28, 2018 at 10:01 am | Permalink

    A relative of mine had heart bypass surgery at an NHS hospital, and I was shocked, when reading through the post-operative advice for patients, that each of the eight cardiac surgeons had a different piece of advice for when it would be safe to restart driving.

    How can it be that, within one NHS trust, there are eight single best practices? Efficiency in the NHS is a foreign concept and could deliver massive savings for a minister prepared to address the many fiefdoms, jealously built and maintained empires and lax administration that bedevil our healthcare system and which ensure waste on an unimaginable scale.

  39. Past Month
    Posted July 28, 2018 at 10:13 am | Permalink

    Mrs May is said to be going on her hols from her meeting in Austria to Italy . Good move! They’ll less expect the likes of her going in from the north by land.

  40. forthurst
    Posted July 28, 2018 at 10:31 am | Permalink

    words left out re immigration ed

    The Tories have decided to look again at their neoliberal policies with regard to foreign takeovers of British businesses; what if they go completely insane and decide to attack the Chinese but who have bought a British business whose products are essential for mechanised belligerence against them? The Tories don’t care one hoot that large swathes of British industry have been acquired by foreign companies, even with loans from taxpayer owned banks, having announced publicly that they intend to retain British production and investment and then who do the opposite. Even when some production is maintained in the UK, the profits, initiative, patents, trademarks are lost for ever, preventing replacement companies being formed.

    When Tory remoaners encouraged major foreign companies to threaten us with withdrawal if we left the Single Market, those business operations had all been British but had been flogged off. If anyone needs an object lesson in the folly of allowing foreign takeovers, they need look no further than that.

  41. Narrow Shoulders
    Posted July 28, 2018 at 10:37 am | Permalink

    Productivity requires investment either in training, supervision or technology.

    When it is cheaper to just import more workers (whose living costs will be subsidised by the taxpayer) there is little incentive for business to invest. Especially as trained staff are more mobile and so need to be paid better.

    So either we prevent imported workers or we make companies pay their full living costs so it becomes cheaper to invest.

  42. David D
    Posted July 28, 2018 at 10:49 am | Permalink

    So what we see is that the sector of the economy most closely controlled by the political and bureaucratic classes is by far the most unproductive. Sectors least controlled -electronics, internet etc are, by a huge margin, the best preforming. Demonstrating that freedom, lack of regulation and the least possible taxation (preferably none at all) are the key factors in wealth generation and development. I’m not sure how any thinking person can believe that government is beneficial to human life in any way at all but unfortunately millions do. A tribute to state schools and media brainwashing I suppose.

  43. Lifelogic
    Posted July 28, 2018 at 11:29 am | Permalink

    Not all that easy to be competitive in the UK however smart you work, with countries that tax at perhaps half the rate yet have far better public services, cheaper property, lower employment costs, fewer daft regulations, easy hire and fire, far cheaper energy and rather more sensible government though. Nor is it easy to attract the investment needed to the UK given all these factors and the UK uncompetitive banks. Plus they do not have a visionless robot T May and Tax to death P Hammond warming up for a Corbyn SNP/Venezuela government.

  44. mancunius
    Posted July 28, 2018 at 12:02 pm | Permalink

    “Those who see productivity programmes as excuses for cuts and less spending need to be reassured ”

    Challenged, surely, not reassured. Most fearmongering about ‘cuts’ is a political campaign backd by trade unions, to maintain high numbers of union-subsidising personnel, and to fight any and all automation and enforced up-skilling that would raise productivity levels.

    It is a worldwide problem in state-controlled services that employees fear change: partly because they have become used to the comforts of routine, the protected habits of work, and just getting through the day or the shift without much thought. And partly because nobody has offered them a positive alternative: public-service managers preach glibly about ‘change’ as if it were an end in itself, a blind, inexorable and pitiless force, and a convenient pretext for redundancies. Nobody has come up with a blueprint for what the inevitably redundant workers are going to do to maintain their mortgages and family incomes.

    The answer may well be more (and affordable) renting, more geographical flexibility, lower taxes. But the status quo is so profitable for banks and the political elite, that no one ever properly addresses the UK population’s assumptions of entitlement to a house and a job on the same spot, both for life.

    Also, because the state is also the backstop for retraining, it is crassly done. Somebody told me recently that that after becoming unemployed in 2001, he was retrained in the skills of cleaning and repairing *mechanical typewriters*…

  45. Tom Rogers
    Posted July 28, 2018 at 2:35 pm | Permalink

    Investment can be inimical to profit. Businesses therefore need to be incentivised to invest. Perhaps a start would be at the macroeconomic level: stop mass immigration and the whole direction of ‘people-led growth’, which just encourages bubble-like fiscal and economic policy and crazy social policies. Instead switch to growth based on productive industries. This needn’t be primarily manufacturing, we may be better at the softer industries and inventing things, rather than making things, but making things needs to be part of it. We could even in time have a national currency based on productivity.

    Another dichotomy is between free trade and cheap labour. At the moment, we are relying on the latter. Unilateral free trade (but with subsidies and other accommodations) would help re-orient out economy commercially towards productivity and away from credit-based economic activity that relies on having more and more people in the country. If businesses know they can buy supplies in without tariff barriers and with minimal non-tariff impediments, then this will further drive profits aligned to productivity and disincentivise the importation of cheap labour.

  46. Doctor Who
    Posted July 28, 2018 at 4:35 pm | Permalink

    Or……. manual work, not exercise, should be a component part of everyone’s life. My own opinion.

  47. mancunius
    Posted July 28, 2018 at 6:12 pm | Permalink

    A current example of reckless public service disregard for the ‘consumer’: the local council has sent all its noise environmental team on holiday at the same time, so builders can breach the law on noisy building hours, and make as much noise as they like 24/7 unchecked until they return. Even if local Councillors had any interest in the problem, or ability to address it, they too cannot be contacted as they themselves are also on holiday.

    Utter shambles.

  48. Iain Gill
    Posted July 28, 2018 at 6:40 pm | Permalink

    Example of why NHS is so wasteful…
    Adult with new case of severe bleeding from back passage.
    As a rule of thumb, it is 30 % chance of cancer, and 70 % chance of being bad haemorrhoids, but needs checking as early treatment is needed if it is cancer.
    NHS approach:
    1 Must see GP to get referred. 3 weeks wait to see GP not uncommon. GP will amongst other things subject you to finger up bum which is completely unnecessary as you need a sigmoidoscopy (camera up the bum) anyways, indeed the GP will acknowledge that but tell you the CCG will refuse their referral if they have not done it. Wasted day off work, productive time in the economy lost by both the patient and the GP. Patient will be given no choice of which hospital or consultant they get referred to.
    2 Referral will be subject to the “2 week rule” i.e. all referrals which are needed to rule out cancer must be seen within 2 weeks.
    3 At the end of the 2 weeks the patient will be told the day before to come in. The consultant (or junior doc/surgeon you have no guarantee of actually seeing a consultant) will repeat what the GP has already done. Another unnecessary finger up bum, indeed its such a waste of everyone’s time because you need an urgent sigmoidoscopy that its more or less assault. The consultant will put you on a waiting list for a sigmoidoscopy. Another wasted day off work, and waste of consultant time.
    4 Some time later, about 3 or 4 weeks say (making a mockery of the “2 week rule”) you will get called in for a sigmoidoscopy. Day off work.
    a) You will be forced to sign the consent form before they actually tell you the name of the medic who will do the procedure. It could be a junior, it could be a senior consultant, you have no say, and no opportunity to opt out or check them by name on the register beforehand. Only nurses will talk to you like you are stupid, and no time at all talking to the person doing the procedure. Very unlikely you will have the procedure carried out by the same person you saw at 3 above, so no continuity of care or real responsibility on one named consultant.
    b) You will be forced to sign a disclaimer giving up all rights to claim against the NHS if your property is lost of damaged while you are in their care. If you refuse you will be shown the door. Especially bad as you will be continually moved around treatment and recovery rooms while you are there, and no safe place to leave your stuff is available in practise.
    c) You will be passed around about a dozen nurses trying to shuffle you along their production line, and from place to place.
    Procedure will be carried out. They won’t tell you there and then the details of the outcome, they will send you home to be called in again.
    5 You will get called in again by the NHS to talk to another random consultant (or junior doc/surgeon you have no guarantee) unlikely to be the one you saw in 3 or 4 above. You will be given diagnosis. If they can see its cancer you will be put on a waiting list for an op. If they have only found haemorrhoids the NHS will stop there (about 25 % of cancers will not be spotted using this approach), which compares badly to other countries which would continue with other tests like ultrasounds. If its haemorrhoids, no matter how bad, how much blood you are losing, how hard it is to deal with hygienically, the NHS will lie and say you need no further treatment (because the govt has stopped all haemorrhoid operations), flying in the face of previous NHS approach but a few weeks ago and the entire rest of the developed world. Another day off work.
    So, for a simple haemorrhoid diagnosis you have had a minimum of 3 days off work, and multiple fingers up your bum which were completely unnecessary, and the NHS has wasted a lot of money.
    Compare and contrast to rest of world and private:
    1 Patient self refers to consultant they choose.
    2 Consultant sees patient within a few days and does sigmoidoscopy there and then on first appointment. Will often follow up with other tests like ultrasound there and then. Patient is kept in one small set of rooms throughout, so much less chance of belongings going missing. No attempt to deflect blame if belongings go missing. Consultant sits down with the patient before and after and explains risks, and outcome of procedure. Patient goes home having lost only one day off work. Been seem by only one consultant and nurse. If only haemorrhoids can be found the pros and cons of operation will be explained honestly, with no attempt to hide the fact that perfectly simple procedures are available to deal with this.
    You can see from the above the NHS has unnecessarily taken many more productive days out of the economy. Has actually wasted more time of medics and nurses. And is leaving people with severe haemorrhoids untreated which is a significant problem because apart from anything else if cancer does subsequently develop it will be masked as the patient will already be experiencing severe blood loss. Many people being taken out of the productive economy as you simply cannot hold down a job when you are getting your clothes etc covered in blood every time you use the loo.
    So yes, in simple cases like this the NHS has no concept of productivity, they inconvenience patients as much as they can to try and keep them for showing up for care, and wastes enormous amounts of time and energy on appointments which are simply unnecessary.
    And of course if you have cancer the NHS will take a minimum of 8 weeks to find out, compares very badly to the rest of the world that would have come to that conclusion within a few days.
    NHS is wasting lots and lots of money like this, please don’t throw money at them without reforming them and handing buying power to patients.
    Please send this as a case study to the relevant minister…

    • Iain Gill
      Posted August 1, 2018 at 6:36 pm | Permalink

      I got it wrong for a simple haemorrhoid diagnosis you have had a minimum of 4 days off work not 3.

  49. Nigel Seymour
    Posted July 28, 2018 at 6:51 pm | Permalink

    Declining PM

  50. Mike Wilson
    Posted July 28, 2018 at 7:16 pm | Permalink

    Nothing to do directly with productivity as such – a lot of people these day go on about how appalling it is that we have a consumer society driven by ever increasing levels of consumer debt and so on.

    My question is, what would we do with the (say) 10 million people who would find themselves out of work. If we don’t all consume tat (including such things as fast food and clothes we like but don’t need etc.) – what will half the population do for work.

    Which begs the question – why do we all have to work? 40 hours a week for most of our lives? If we consumed less tat, maybe we could share what work there is and all work 20 hours a week. But would we have enough money for a home and food.

    These are the questions government and politicians should be thinking about – and coming up with a long term plan. The current plan seems to rely on ever increasing house prices, ever increasing consumer debt and the ever increasing consumption of tat and pollution of our planet. And still we have a massive production and consumption of plastic.

    I saw a car towing a trailer today with two pallets of building blocks on the back. I marvelled at the strenght of the thin strips of plastic that bind each row of blocks. I used to work in the building industry. Those strips of plastic are indestructible. And they’ll spend the rest of eternity in a land fill or, somehow, end up in the sea. It’s very dispiriting how unambitious government and politicians are.

    So, linking this to productivity – we are to become more productive at producing and consuming tat!

  51. Original Richard
    Posted July 28, 2018 at 8:02 pm | Permalink

    Why would our corporate employers want to spend time and money improving productivity when they can easily employ vast numbers of cheap imported foreign labour subsidised by the UK taxpayer ?

  52. Jack
    Posted July 28, 2018 at 8:09 pm | Permalink

    They’re saying that on Thursday the BoE will hike the bank rate to 0.75%.

    How can they not understand yet that lower interest rates reduce inflation, and higher rates increase inflation? The term structure of rates directly feeds into the term structure of prices, as stated by Warren Mosler:

    The spot and forward price for a non-perishable commodity imply all storage costs, including interest expense. Therefore, with a permanent zero-rate policy, and assuming no other storage costs, the spot price of a commodity and its price for delivery any time in the future is the same. However, if rates were, say, 10%, the price of those commodities for delivery in the future would be 10% (annualized) higher. That is, a 10% rate implies a 10% continuous increase in prices, which is the textbook definition of inflation! It is the term structure of risk free rates itself that mirrors a term structure of prices which feeds into both the costs of production as well as the ability to pre-sell at higher prices, thereby establishing, by definition, inflation.

    • Jack
      Posted July 28, 2018 at 8:14 pm | Permalink

      Higher interest rates also act as a stimulus to the economy, the interest income channel should not be underestimated.

      However, it’s sub-optimal. It’s essentially a basic income policy for people who already have a lot of money.

      Set the bank rate at 0% forever, this will result in a stable currency and low inflation. Use massive payroll tax cuts to get our annual GDP growth up to 15%, rather than higher rates.

  53. Jack
    Posted July 28, 2018 at 8:26 pm | Permalink

    Productivity is output per hour, and when austerity crushes output, don’t be surprised if output per hour gets crushed too.

    Capitalism runs on sales, higher taxes and less govt spending mean less sales, and therefore less to do. Cut payroll taxes and increase the government deficit enough to get GDP growth running at 15% per annum, and the “productivity puzzle” will evaporate overnight.

  54. rick hamilton
    Posted July 28, 2018 at 9:22 pm | Permalink

    Overall productivity is a function of the characteristic that economists ignore and cannot measure – the work ethic.

    Compare and contrast that of the UK and say Singapore, Korea, Japan and Taiwan, all highly productive nations where diligence and attention to detail matter and ‘the customer is king’.

  55. F Dixon
    Posted July 29, 2018 at 10:05 am | Permalink

    Too often increased productivity is linked to new innovative computer/IT systems, but in reality what happens is staff spent ever more of their time in-putting data and trying to extract meaningful reports rather than doing their actual jobs (this is not their fault). In addition the reports produced from all that data input usually give the same information week after week and so become quickly ignored rather than be analysed for usefulness or process improvement.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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