The Chancellor’s Mais Lecture today is serious in diagnosis and ambitious in intent, but intent alone will not cure Britain’s productivity malaise. The central argument is sound: the UK’s long-run weakness is not a shortage of talent or ideas, but a chronic failure to invest - in infrastructure, skills, technology, energy resilience and the productive capacity of its regions. On that point, the speech hits the target.
There is much here that could support stronger productivity over time. Planning reform matters. Better transport links matter. More reliable and cheaper energy matters. Stronger support for AI adoption, research, and skills could raise output per worker if it spreads beyond a handful of frontier firms. A greater focus on regional growth is also welcome, because an economy that relies too heavily on London is like trying to win the Premier League with one defender and no midfield.
Jason Mitchell, head of technology at accountants and advisers MHA says:
While we welcome the announcement by the Chancellor today on AI and Quantum computing, as well as plans to replicate a Silicon Valley base in the Oxford/Cambridge corridor, there are some fundamental problems that need to be fixed before the UK can really compete as a tech player on the world stage. And even then, we may always be second to the behemoth that is the United States.
Encouraging investment in AI is helpful, but it should not be the only lever the Government can pull to promote growth. In the last two decades under successive governments there has been modest progress towards encouraging entrepreneurs and risk taking in the UK, but recent policy decisions regarding the taxation of non-doms and high net worth individuals risk being a backward step. Capital and talent are increasingly mobile and will be attracted by an environment that appears more welcoming and user friendly.
As a firm, MHA have argued for a more progressive UK corporation tax regime. We have clearly seen with our nearest neighbours, Ireland, that a reduction in the rate of tax encourages more investment and raises the overall tax take significantly. We also need to encourage more potential investors, whether privately or via the London Stock Exchange, as the UK currently lacks the depth of capital willing to make long-term investments.
"Whether we establish a closer trading relationship with the EU, which would benefit many of our clients, the reality is that the US remains the dominant consumer tech market — so it is hardly surprising that the largest tech companies are based there."
But the real question is whether this becomes delivery or remains doctrine. Britain has heard big growth narratives before. Productivity will not rise simply because government identifies the right sectors or announces large funding envelopes. It rises when projects happen faster, businesses invest with confidence, workers gain better tools and skills, and capital is allocated efficiently across the economy.
That is where the challenge lies. A heavy regulatory burden, persistent trade frictions, and weak business confidence could all dilute the impact of the strategy. There is also a risk that an “active state” becomes a slower, more expensive state unless discipline, speed and accountability are built into delivery.
So, will this solve the productivity problem? Not yet. It is a credible framework, not a complete solution. It points Britain in a better direction, but sustainable growth will depend on relentless execution. The big test is brutal but simple: can the government turn speeches into investment, investment into productivity, and productivity into rising living standards? That is the measure that matters.
