Wages ‘could be £8,500 a year higher if UK was as productive as US’

  • Productivity in the UK would need to rise by nearly a third to match the US
  • Report finds that achieving the increase could add £8,500 to annual salaries 
  • Taxpayers Alliance urges slashing taxes and blames EU customs union for drag 

Average wages could be £8,500 a year higher if British workers were as productive as their US counterparts, it was claimed today.

The hourly output of the UK workforce would need to rise by nearly a third to match that of America.

But achieving that improvement would leave scope for weekly earnings to be increased by £164.

The claim came in a report by the Taxpayers’ Alliance – which called for a radical overhaul of the economy to reap the ‘huge gains’.  

The hourly output of the UK workforce would need to rise by nearly a third to match that of America. Pictured is the Nissan plant in Sunderland, which has been praised for its high productivity levels

Its proposals include loosening planning restrictions, slashing taxes, and more devolution.

For many years Britain has been about 30 per cent less productive than both Germany and America – with levels of growth in the measure remaining stubbornly low. 

Addressing the issue is seen by the government as crucial in driving wage increases and profits, as more goods or services can be generated by the same number of people.  

The Taxpayers’ Alliance called for capital gains tax to be scrapped, saying that would encourage smaller firms to agree to takeovers or merge and be more efficient.

They also suggested help to secure finance for so called ‘zombie firms’ – which can afford to service debt but not invest in growth.

The report said the EU customs union was giving advantages to European businesses ‘at the expense of consumers’ and more efficient companies.

Taxpayers’ Alliance chief executive John O’Connell said: ‘As Britain prepares to leave the EU, we need to ensure that our country is ready to meet the risks and take the opportunities that lie ahead.

‘Our nation’s productivity is lagging behind other G7 countries such as America, and we are simply not living up to our potential.

‘By scrapping burdensome regulations and lowering the tax burden on families and businesses, the UK could significantly increase productivity and give everyone a much-deserved pay rise.

‘Now is the time for the government to take bold action.’ 

The report said the EU customs union was giving advantages to European businesses 'at the expense of consumers' and more efficient companies

The report said the EU customs union was giving advantages to European businesses ‘at the expense of consumers’ and more efficient companies

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