By Jonathan Davies

The Chancellor George Osborne has called for a major push to improve the UK's productivity.

Mr Osborne told delegates at the CBI dinner that he will not "take if foot off the pedal" in the wake of the Conservatives victory at the general election.

But the Chancellor stressed that the UK can only find an "extra gear" if areas like transport, skills and broadband are invested in.

In what was his first major speech since regaining his place in the Treasury, Mr Osborne said his "productivity plan" in the run-up to July's emergency Budget is vital to improving living standards.

He suggested that productivity will be one of the government's key targets over the next five years.

Improved productivity could mean the UK becoming the "most prosperous country in the world", Mr Osborne claimed.

The Chancellor said: "Frankly, nobody knows the whole answer. But what I do know is that I'd much rather have the productivity challenge than the challenge of mass unemployment.

"And what I also know is this: we have a once in a generation opportunity, right now, to find an extra gear for the British economy, and ensure higher living standards for the next generation to come.

"Confidence in the British economy is at its highest level in 12 years. If we don't, together, fix our country's long term weaknesses now - when will we?"

He added: "It would be very easy at the beginning of a second term to take our foot off the pedal. That's not what we are going to do."

Frances O'Grady, the general secretary of the TUC, said: "It's no good putting your foot on the pedal if you keep cutting the fuel in the tank. The extreme cuts the chancellor is planning will put growth at risk during a recovery that is already precarious."