Economic recovery in doubt as figures show UK workforce produces 20% less than other major economies

‘Bad news’ for British productivity leads to questions over George Osborne’s claims we are in ‘early stages of recovery’

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The Independent Online

The productivity of the British workforce is lagging behind the rest of the world by the worst margin in almost two decades, according to official figures.

Despite George Osborne’s claims that the UK economy is in the “early stages of recovery”, figures released today show that the Office for National Statistics’ (ONS) key measure of productivity – output per worker – puts Britain nearly 20 per cent below the average for the rest of the world’s major industrialised economies.

The ONS found that the UK’s output actually dropped in 2012 when that of the rest of the G7 countries rose, and that shift has created the widest gap since 1994.

The figures, which are a “first estimate” of how Britain compared with France, Germany, Japan, Canada, Italy and the US last year, also showed that the amount workers here contribute to the economy has even dropped 2 per cent since 2007 – before the economic crisis hit.

John Philpott, the former chief economic adviser at the Chartered Institute of Personnel and Development, said the weak productivity figures prove the UK is not experiencing a “genuine recovery”.

“The bad news is that the UK is falling fast down the international productivity ranking,” he said.

“The relative improvement in the UK's productivity performance from the mid-1990s to the late 2000s has clearly gone into reverse in an economy reliant on falling real wages, rather than increased output, as the main driver of employment growth.

“While the real wage squeeze is preferable to even higher unemployment, these latest international productivity figures show the UK economy can't be deemed to be experiencing a genuine recovery until we see firm evidence of both stronger output growth and rising real incomes.”

Today’s figures put in doubt Chancellor George Osborne’s claims the country is in the “early stages of recovery” and “turning a corner”.

Speaking at the Institute of Directors' annual convention he said: “The British economy is looking better. The economy is growing in all sectors. British businesses have now created 1.4 million new jobs.

“And almost five years to the day after the near collapse of the British banking system we have started to sell off our shares in the banks and to get taxpayers' money back.

“Britain is turning a corner but we have a long way to go.

“At home, our economy is still in the early stages of recovery. Unemployment and our deficit are both still too high.”