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'Yawning' productivity gap between UK and other countries

Published 18/02/2016

The UK lags behind other developed nations in terms of productivity
The UK lags behind other developed nations in terms of productivity

New figures have revealed a "yawning" productivity gap between the UK and other countries.

Output per hour in the UK in 2014 was 18% below the average for the rest of the major G7 advanced economies - the widest productivity gap since comparable estimates began in 1991, said the Office for National Statistics.

In financial services, the UK was 5% more productive than Germany but 6% less productive than France and 22% less productive than the USA between 2010 and 2014.

In manufacturing, the UK was 24% less productive than Germany, 18% less productive than France and 45% less productive than the USA.

UK output per hour in 2014 was 5% lower than Spain and considerably lower than productivity in Ireland, Belgium and the Netherlands, said the ONS.

TUC general secretary Frances O'Grady said: "For all the good news on rising employment, the UK is still not creating enough quality jobs.

"The yawning productivity gap between us and other countries shows how much room there is for us to do better.

"The loss of middle-income jobs, in vital industries like steel, is holding the economy back and dragging down pay."

Acas chairman Sir Brendan Barber said: "It is clear from these figures that we need to find new ways to tackle the UK's productivity crisis.

"The workplace is where the factors of production come together to deliver goods and services. We believe that a well-managed, efficient and innovative workplace can bring the improvements in productivity that we all want to see.

"To help solve the UK's productivity gap, we have just launched an accessible productivity tool kit to help businesses assess their strategies for boosting workplace performance."

Seema Malhotra, shadow chief secretary to the Treasury, said: "Britain's shocking lag on productivity on his watch exposes the failure of George Osborne's short-term policies. It is the key to long-term prosperity, which George Osborne is now threatening with today's figures showing that the productivity gap has now widened to the worst level since records began.

"Instead of allowing vital industries like steel to go to the wall, and hitting sectors of the future like renewables with cuts in support, we need a Government prepared to invest in skills, infrastructure and research."

Unite assistant general secretary Tony Burke said: "The Government's failure to adopt an active industrial strategy is holding back the UK's productivity in manufacturing and leading to the loss of vital skills in key industries such as steel.

"A low-waged, low-skilled economy built on precarious and insecure work will see the UK's productivity gap continue to grow and fail to deliver sustainable economic growth.

"Government ministers need to ask themselves why France, with its 35-hour working week, and Germany, where trade unions are embraced as partners in productivity, are both streets ahead of the UK."

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