Engineers Attack Government Effort to Close Productivity Gap

By Harrison, Michael | The Independent (London, England), April 16, 2003 | Go to article overview
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Engineers Attack Government Effort to Close Productivity Gap


Harrison, Michael, The Independent (London, England)


GOVERNMENT ATTEMPTS to close the productivity gap between the UK and its European rivals are heavily criticised today in a report from manufacturing industry leaders.

The Engineering Employers' Federation claims that Britain has fallen "dangerously behind" France and Germany because ministers have concentrated on raising productivity by removing barriers to competition rather than encouraging investment in skills, innovation and manufacturing.

The EEF study also voices concern that the number of inward investment projects is rising in France but falling in the UK - a further signal that the environment for manufacturing is becoming more favourable on the Continent.

Gordon Brown has made an improvement in UK industrial productivity one of the Government's top priorities. However, in last week's Budget announcement, the Chancellor said the gap with France was still 16 per cent while it was 20 to 30 per cent with America. US firms also invest 50 per cent more in research and development than their UK counterparts.

The study, Bridging the Continental Divide, argues that the policy of concentrating on increased competition in UK markets is misguided because the UK is already well ahead of its European rivals in this respect.

This means that the continuing productivity gap can only be explained away by other factors, such as the disparity in skills training and investment in innovation.

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