However, workers here are more likely to be educated to degree level than those in France, Germany and Singapore.
A skills audit carried out by government departments shows that most multi-national companies think British workers only have an adequate level of skill in mathematics, reading and writing.
They rated those in France, Germany, Japan, Singapore and the United States as better equipped in literacy, while all countries except the US rated higher in numeracy.
The document promises a new emphasis on basic skills as well as a consultation on vouchers for 16-19 education and a further White Paper on selection in schools. It is the third in a series of initiatives to increase Britain's performance in comparison with its main competitors.
It shows also that Britons are less likely than people in other countries to have the equivalent of 5 GCSEs at grades A to C. They are less likely to have two A-levels than their counterparts in Germany, but are ahead of those in Singapore and the US and equal with France.
At degree level, the US is ahead of its competitors with 22 per cent of adults having completed a university course. In Britain, 19 per cent have done so while France achieved a level of 16 per cent, Germany 15 per cent and Singapore 12 per cent.
The paper also shows that the best-qualified British employees now earn proportionately more than they did in 1979, while the least-qualified earn less. People with degrees earned 150 per cent of the median male wage in 1993, compared with 148 per cent 15 years earlier. Those without qualifications earned 91 per cent of the median in 1979, but this had dropped to 81 per cent by 1993.
Speaking at the launch of the White Paper, Gillian Shephard, the Secretary of State for Education and Employment, said the audit did not reflect the improvements which had been made. In 1995, more than two-thirds of young people achieved 5 or more GCSEs, compared with just over a half in 1990, she said. The number passing at A-level had risen from 30 per cent to 44 per cent in the same period and the number of 18-year-olds in education and training had risen from 45 per cent to 60 per cent.
She admitted that there were areas where Britain needed to improve its performance, however, and promised initiatives to increase both A-level passes and levels of literacy and numeracy.
"Education and training is crucial to our competitiveness. We have a major programme of reforms in place to tackle well over a century's neglect of this country's skills needs," she said.
David Blunkett, Labour'sspokesman for education, accused the Government of failing to equip the nation with the skills it needed.
"The Tories must own up and accept their responsibility for their failure, and stop trying to blame Gladstone and Churchill," he said.
How the British lag behind
Survey of multi-nationals
(20 equals adequate, 40 equals good).
Literacy: UK 22, USA 23, France 24, Germany 28, Singapore 30, Japan 35.
Numeracy: UK 21, USA 21, France 25, Singapore 30, Germany 31, Japan 40.
Survey of 40 multi-nationals:
Percentage of adults with five high-grade GCSEs or equivalent: UK 45, USA 50, Singapore 51, France 65, Germany 70.
Percentage of adults with two A-levels or equivalent: Singapore 23, USA 29, UK 30, France 30, Germany 62.Reuse content