NHS and benefits reform praised as key to raising UK productivity
REFORMS to the UK’s welfare state are boosting productivity, growth and wages, according to a report out today from the Organisation of Economic Cooperation and Development (OECD).
Britain is lagging behind other rich countries, with productivity as much as 25 per cent below the average across the G7 in 2012, the Office for National Statistics said yesterday, in a separate release.
More recent figures have shown some improvement, as the economy has recovered sharply through 2013 and businesses are increasingly keen to invest.
Progress has been made by the government, the OECD said, noting that healthcare reforms, childcare changes, the higher school leaving age and a streamlined benefits system should help.
The OECD added that more needs to be done.
It recommends planning reforms and more competition in the public sector.
In addition, more welfare reforms to increase incentives to work, as well as improved infrastructure would help, it said.
Improving productivity is important because wages are only expected to increase steadily once output per worker and per hour starts growing.