Increasing annual investment allowance

Key points

• UK productivity growth has stagnated since the 2008 financial crash.
• The government should increase the annual investment allowance to help improve the UK’s productivity.
• An increase to £5m could boost the British economy by about £27bn.
• Projected business investment could more than double setting the UK on a significantly higher 
  growth trajectory.

Brexit uncertainty is perhaps the most visible challenge facing policy makers and business leaders in the UK but it would be wrong to categorise it as the only one. A question that emerges time and again during discussions with our clients – across sectors and throughout the country – is how the UK should tackle its persistently low levels of productivity growth. All G7 economies saw a sharp fall in productivity immediately after the 2008 global financial crash. However recovery has proved particularly difficult for the UK in part because of the dominance of the services sector ...