George Osborne has taken a huge gamble on British workers becoming more productive over the next couple of years, according to CIPS economist John Glen.
Speaking at the CIPS Annual Conference in London, Glen said the chancellor’s announcement of the National Living Wage in the budget had “destroyed my whole world order in one foul stroke”.
“If [Jeremy] Corbyn had said that I would probably have accepted it, but for George Osborne to have said it, it really was an enormous philosophical step for him to take,” Glen told the audience.
“He has placed an enormous bet on British workers becoming more productive. The only way we can afford to pay that living wage is if that productivity variable starts to deliver. That is his enormous bet now for the next two or three years and he has to make sure it happens.”
He added: “He is essentially backed the British workforce in an enormous way, and it is now up to us to start focusing on productivity and it will come back to affect the people in this room in an enormous way very soon. You will find yourselves under increasing pressure to show how you can aid the process of increasing productivity in the economy in the short term.”
Glen, who is a senior lecturer in economics at Cranfield School of Management, also addressed concerns about the strength of the Chinese economy, and urged purchasers to be vigilant.
“The worry is [the slowdown in Chinese economic growth] may be an indicator in a malaise in emerging economies generally. Those economies have been important not only as a source of supply, but as an engine of growth in our global economy,” he said.
“There are dangers in terms of the financial robustness of these economies. You may have been reading articles on a daily basis about whether we are going to have another financial crisis that comes out of the Far East. It is definitely something that you have to watch.”