The scorecard for the UK economy

Click to follow
The Independent Online

So what is it really like to do business in the UK? Employers' groups say business taxes have risen £70bn since 1997, yet foreign takeovers of UK companies are at record levels.

The Government says the UK has a competitive economy, yet independent surveys claim competitiveness fell last year to seventh, 13th, or ninth - depending which survey you read.

Away from the Punch and Judy show of government-business relations, it sometimes benefits to take a step back.

The Organisation for Economic Co-operation and Development (OECD), a group of 30 developed countries, has pulled together hundreds of statistics on topics including growth, R&D, migration and public finances.

The results confirm some prejudices but shatter several myths. Statistics, it seems, are sometimes neither damned nor lies, to mangle Benjamin Disraeli's famous aphorism.

First on the list of myths to be shattered is the saloon bar favourite - that Britain is being "flooded" by immigrants. In fact, the UK has taken in one migrant per 1,000 natives a year since 1991. Germany has taken in almost four while Greece has absorbed six. Nor is our population growing at runaway levels - about 0.25 per cent a year over the past 13 years compared with about 2 per cent in India and South Africa.

The brain drain - the loss of highly educated Brits to other countries - is true. We have lost 15 per cent of graduates to other OECD states, behind only Ireland, New Zealand and the Slovak Republic.

When it comes to wealth - GDP per head - it comes as no surprise that the US tops the list at $40,000 (£23,000). The UK is close to the OECD average of $30,000. But when it comes to the changes between 1992 and 2004, Ireland tops the list with growth of 50 per cent, Japan has slumped 11 per cent, while the UK has grown a respectable 10 per cent. An analysis of regional distribution appears to affirm a North-South divide as the UK has the second largest variation between the richest area - inner London - and the poorest - the Isle of Anglesey.

Gordon Brown, the Chancellor, told MPs in last month's Budget that the UK had a higher employment rate than the US or the eurozone, and the figures prove him right. The UK has an 80.7 per cent rate, above those of the US and France, Germany and Italy.

Long-term unemployment - those out of work for a year - also provides good news for the Government as less than a fifth of the UK's jobless total in 2004 fell into that category, better than the EU average but worse than the US's hire-and-fire labour market.

The OECD topples another myth - that the UK has a long-hours culture. While that might be the case in the City, for example, the actual hours worked per year per person has fallen since 1994.

When it comes to the volume of exports, the UK is a major player with exports of $43.7bn in 2004, putting it seventh in the world. But the more interesting story is the dominance of China with sales of $180.4bn, ahead of the US and contrasting with the negligible exports from India, which has yet to convert its use of software into production.

The UK moved heavily into hi-tech industries in the 1990s via companies such as Marconi, and their share of total manufactured exports surged from below 30 per cent in 1997 to 40 per cent in 2001. Since then it has slipped to 34.7 per cent, still leaving it the fifth largest in the world, ahead of Japan.

But few subjects attract such claim and counterclaim as public finances. The UK's tax take will rise from a trough of 33 per cent of GDP in 1994 to 38.7 per cent in 2008. But this still leaves it far short of the 50 per cent seen in Sweden. Crucially, the UK is ahead of Germany but still below the average for both the OECD.

The furore over the 2002 rise in National Insurance contributions had not fed through to a sharp rise in the tax burden on employees, the chart shows. The UK figure, as a percentage of labour costs, ticked up to 31 per cent, still way below Germany's 50.7 per cent and France's 47.4 per cent.

Finally, the OECD Factbook 2006 throws a fascinating light on the murky world of development aid. The 2004 Asian tsunami triggered hefty pledges of aid. Yet it seems much was promised but less delivered. The US stands out as the main offender, pledging $800m but delivering less than $300m. The UK has so far disbursed 90 per cent of the $150m-odd it pledged. Denmark, which pledged a relatively small amount, can claim the title of the most honest broker - delivering all but a tiny fraction of its pledge.