Persistent Productivity Failure in the UK: Is the EU Really to Blame?

Crafts, Nicholas

doi:10.1177/002795011924700111

Cited by 6 publications

(4 citation statements)

References 48 publications

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“…However, if productivity gains are concentrated in already high-performing businesses and are not reinvested to create employment and wage growth, economy-wide gains could be limited and short-lived. The recovery in business investment might also be weaker than expected if weak pre-pandemic trends continue due to the effects of Brexit (Crafts, 2019), deteriorated balance sheets or persistent demand deficiencies, which could exert downward pressure on productivity growth.…”

Section: Long-term Productivity Shifts Resulting From the Pandemic Remain Largely Uncertainmentioning

confidence: 99%

1 UK economic outlook: Brisk but not better growth

Küçük¹,

Lenoel²,

Macqueen³

2021

NIER

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for helpful comments and Patricia Sanchez Juanino for preparing the charts and the database underlying the forecast. The forecast was completed on 26 April 2021, more recent data are incorporated in the text. Unless otherwise specified, the source of all data reported in tables and figures is the NiGEM database and NIESR forecast baseline. All questions and comments related to the forecast and its underlying assumptions should be addressed to Cyrille Lenoël

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Section: Long-term Productivity Shifts Resulting From the Pandemic Remain Largely Uncertainmentioning

confidence: 99%

1 UK economic outlook: Brisk but not better growth

Küçük¹,

Lenoel²,

Macqueen³

2021

NIER

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“…If this is the case, then it would be especially important in a UK context to nurture competition. Stronger product-market competition was a major reason why EU membership raised productivity and, more generally, competition clearly matters for UK productivity performance (Crafts, 2019).…”

Section: A More Dynamic Economy?mentioning

confidence: 99%

Brexit and control of subsidies

Crafts

2022

Oxford Review of Economic Policy

Self Cite

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The paper reviews the implications of the EU–UK Trade and Cooperation Agreement (TCA) for the control of subsidies. Controls will be less strict than under the EU state aid regime but tighter than with no deal and WTO rules. A subsidy control authority will be established by the UK which will oversee the application of broad principles set out in the TCA. A well-designed authority would help to prevent a repeat of the UK experience in the 1970s and 1980s, when subsidies were detrimental to economic performance. Regrettably, however, the government has decided to adopt a politicized approach to subsidy policy.

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“…We would expect labour productivity growth to fall below 1 per cent in the year after exit. In an article published in this Review , Crafts (2019) concludes that Brexit is unlikely to improve the UK's productivity in the long run, “since it is neither necessary nor sufficient for the introduction of better […] industrial policies”. We expect that lower levels of investment, lower net migration and lower productivity as a result of less intense trade would lead to a lower productive capacity compared to a soft Brexit outcome.…”

Section: Supply Conditionsmentioning

confidence: 99%