It’s one of the UK’s most pressing economic conundrums: the lacklustre productivity performance that has left Britain languishing behind European rivals such as France, Germany and the Netherlands.
This week, a senior executive at the publisher of The Guardian newspaper will be handed the task of solving that productivity puzzle.
Sky News has learnt that Tony Danker, the Guardian Media Group’s strategy chief, will be named as the first chief executive of the Productivity Leadership Group (PLG), a new business-led organisation backed by companies such as BAE Systems, GlaxoSmithKline and the John Lewis Partnership.
The appointment of Mr Danker, a former McKinsey consultant and one-time Treasury special adviser, is expected to be announced as early as Wednesday, according to insiders.
Mr Danker’s task will be sizeable, but the ultimate prize is enormous: estimates suggest that raising the productivity of underperforming businesses could generate an additional £130bn of economic value every year.
The PLG’s launch was heralded by Philip Hammond, the Chancellor, in December’s Autumn Statement, in which he promised to deliver a “high-wage, high-skill economy that will deliver higher living standards”.
Mr Hammond’s blueprint includes a £23bn Productivity Investment Fund focused on infrastructure and innovation.
The Government has also agreed to provide more than £10m in seed funding to get the PLG off the ground, with a formal launch understood to be scheduled for next month.
The UK’s stubbornly low productivity – which stands as much as 35 percentage points behind Germany and 30 points behind the US, according to official data – has long-mystified economists, but has acquired greater urgency amid the looming challenges posed by the UK’s exit from the European Union.
Business leaders involved in the formation of the PLG have talked of a desire to create a ‘productivity movement’ which places the issue on the agenda of every UK-based company.
Among the private sector bosses backing the initiative are Sir Charlie Mayfield, the John Lewis Partnership chairman and chair of the PLG; Sir Mike Rake, chairman of BT Group and Worldpay; Carolyn Fairbairn, director-general of the CBI; and Doug Gurr, a senior Amazon executive.
Sources said the PLG had already attracted widespread support from businesses, which will be asked to fund its ongoing work after the Government’s initial grant has expired.
Speaking at a business conference organised by The Times on Tuesday, Sir Charlie said: “It (Britain’s productivity problem) has lasted since the financial crisis and it looks pretty persistent.
“They key to understanding it is that there is no one thing (causing it).
“If Brexit is the big political challenge, productivity is the big business challenge.”
Source: SKY News