Closing Regional Gap Could Mean £150bn Boost

Closing the productivity gap between London and the South East and the rest of the country could boost the UK economy by over £150bn, the Chancellor says.

Philip Hammond claimed if the gap was cut by half it could increase the country's Gross Domestic Product (GDP) by 9%.

Business and Energy Secretary Greg Clark said the Government should do more to support cities outside of London to contribute more to the economy.

They made the comments at Theresa May's Industry Committee which met for the first time as it looks to gear the nation up for leaving the European Union.

The Prime Minister chaired the meeting of the new Cabinet Committee on Economy and Industrial Strategy, which focused on building up Britain's industrial strategy and promoting growth across the country.

Mrs May stressed the Government should focus on delivering "an economy that works for all".

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There was a focus on the UK's poor productivity, which relative to other leading western economies is seeing its biggest gap since modern records began in the early 1990s.

Output per hour worked here was 18% below the average compared to G7 nations in 2014, according to the Office for National Statistics.

It comes as China raised doubts over more than £100bn of investment in the UK in the next 10 years after Mrs May ordered a review of the Hinkley Point nuclear plant deal amid security fears over Chinese involvement.

The Chinese state news agency, Xinhua, on Monday questioned the Government's "suspicious approach" saying it "not only draws queries from the international community about its openness towards foreign investment but also adds uncertainties to the 'Golden Era' of China-UK ties".

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The new committee, one of three Mrs May has set up, is made up of secretaries of state from 11 different Government departments.

These include Mr Hammond, Mr Clark, International Trade Secretary Liam Fox and Work and Pensions Secretary Damian Green.

Mrs May said: "As I said on my first day as Prime Minister, I will govern for the whole United Kingdom, and we will look to build an economy that works for everyone, not just the privileged few.

"That is why we need a proper industrial strategy that focuses on improving productivity, rewarding hard-working people with higher wages and creating more opportunities for young people so that, whatever their background, they go as far as their talents will take them.

We also need a plan to drive growth up and down the country - from rural areas to our great cities.

"If we are to take advantages of the opportunities presented by Brexit, we need to have our whole economy firing.

"That's why this committee's work is of the highest priority and we will be getting down to work immediately."