According to the Office for National Statistics (ONS) the productivity of British workers have fallen behind their counterparts in France, Germany, the United States and Canada last year. The country produced 20 per cent less per hour than other members of the G7 group of advanced economies - the worst result since records began in 1991.
Mark Carney, governor of the Bank of England, has described productivity as “the ultimate determinant of people’s incomes and with it the capacity of our economy to support health, wealth and happiness.” Germany produced 33 per cent more per hour last year, France and the US 32 per cent more, Italy 10 per cent more and Canada 4 per cent more. Only Japan produced less.
“These figures show UK productivity continues to lag behind other developed economies,” Joe Grice, chief economist at the ONS, said. “Since the economic downturn, productivity growth has slowed in most developed economies, but by more in the UK than the average.”
Britain’s productivity gap, the shortfall against where it would be if pre-crisis trends had continued, is 18 per cent compared with 7 per cent for the rest of the G7.
Unions have warned that jobs and rising wages would be in danger if the situation did not improve soon. Frances O’Grady, general secretary of the TUC, said: “Without a steep change in productivity growth, the UK economy will struggle to deliver secure jobs and higher living standards.”
In July, the chancellor announced a “productivity plan”, involving planning reforms, devolution, low taxes and apprenticeships.
Economists pointed out that the flipside of UK’s low productivity had been the strength of jobs. GDP grew at the fastest pace in the G7 last year but surging employment meant that productivity barely improved. Unemployment in Britain is 5.5 per cent, about half the level in France and Italy, although the rate in Germany and the US is lower.
