Britain's postwar record on productivity can be split into two periods: pre and post Margaret Thatcher. Prior to Thatcher, output per hour in Britain was growing more slowly than France, Germany and the US, according to John Van Reenen, of the Centre for Economic Performance, and Tim Besley, of the London School of Economics. After Thatcher, UK productivity outpaced the others. There is no question that Thatcher opened up the UK, but she also presided over the rise of North Sea oil and ushered in big banking, both of which distorted the picture. North Sea production began in earnest in the late 1970s. The 1979 oil shock then drove prices through the roof. As a result, measured productivity of the sector, in terms of economic output per hour, was enormous. In 2008, according to the OBR, the North Sea was still 12 times more productive than the whole UK economy.
This article was published in The Times on April 20, 2016
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Related publications
Investing for Prosperity: Skills, Infrastructure and Innovation. Report of the LSE Growth Commission, Philippe Aghion, Tim Besley, John Browne, Francesco Caselli, Richard Lambert, Rachel Lomax, Chris Pissarides, Nick Stern and John Van Reenen, January 2013
Related links
John Van Reenen webpage
Growth Programme webpage
LSE Growth Commission Research Programme webpage
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