Britain is losing out because companies are failing to bridge the productivity gap with their overseas competitors, Gordon Brown, the chancellor, told delegates of the British Chambers of Commerce this week.
Brown, in a speech at the organisation’s annual conference, said one of the causes of the country’s economic decline over the last century was a lack of competition, dynamism and entrepreneurship. Although the UK has some of the greatest companies in the world, he said, it does not have enough to compete effectively on a global scale.
`Over the last 50 years, productivity growth in Britain has been just over 2.5 % a year, compared to between 3.5% and 4% among our main European competitors,’ he added.
John Entwistle, president of the British Chambers of Commerce, said British business is investing in higher productivity, but the gains could not offset the continuing damage to companies’ competitiveness inflicted by the high pound. He quoted EU figures which reveal business costs have risen by 37% between 1987 and 1998, largely as a result of the pound’s strength.