Britain `lagging in investment'

Britain's investment performance has been weaker than that of its main competitors and means the average British employee is working with less capital equipment than the average Taiwanese, according to a new report.

The Government's claim that British industry compares well with other industrial economies, made in its competitiveness White Paper in June, is strongly challenged in a joint report from the Machine Tool Technologies Association and Oxford Economic Forecasting. They present figures showing that the share of investment in GDP is lower in the UK than elsewhere, and that spending on research and development is lower too.

The report also shows that the accumulation of a dismal investment performance over the years means the amount of capital per worker in the UK - the plant and equipment each person has to work with - is less than half the German level, lower than in Taiwan and not much better than in Korea.

It concludes that the British problem is therefore not just a matter of a low investment share keeping trend growth low, the usual diagnosis. It is also that investment has not been high enough to raise the level of capital per worker to the international norm. "Our living standards continue to lag behind," it says. The White Paper's comparison of the share of business investment in GDP in the UK and other countries is criticised as misleading. These figures show Britain on a par with Germany and France and ahead of the US.

However, the new report points out that contracting out by the UK government has boosted that particular figure. In addition the exchange rates used to make the comparison flatter the UK at the expense of the other countries.

Comparing a broader measure of investment shares, such as total public and private investment in machinery and equipment, shows the UK lagging behind all its main competitors.

Malcolm Taylor, president of the MTTA, presented its conclusions to William Waldegrave, chief secretary to the Treasury, yesterday. Mr Taylor said: "Investment, especially investment in technology, is vital to our future prosperity."

After the discussion, Mr Waldegrave said: "In setting the right climate of low inflation and steady growth, the Government's economic policies are encouraging business to expand and invest with confidence."

Mr Taylor said the association had been concerned for some time about the UK's poor performance compared with other nations, and especially about the absence of any action to encourage innovation.

Investment as % of GDP 1980-95

US Japan Germany France Italy UK

Gross fixed capital

formation 18.1 29.5 20.4 20.4 20.5 17.0

Gross fixed capital

formation exc.

residential construction 14.0 23.9 14.5 14.8 14.7 13.5

Gross fixed capital

formation,machinery

& equipment 8.0 11.4 8.5 8.7 11.4 7.8

Source: OECD/OEF

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
News
peopleAt least it's for a worthwhile cause
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments