The chancellor’s Budget speech on Wednesday was peppered with references to Britain’s fine economic health compared with France, reports The Financial Times.
The UK “grew faster than any other major advanced economy in the world last year [. . .] and seven times faster than France”, said George Osborne, adding that, between 2010 and 2013, more jobs were created in Yorkshire than on the other side of the English Channel.
Mr Osborne’s jibes can be justified on some measures. Unemployment in France was 10.2 per cent last year — almost twice the UK rate. Gross domestic product in the UK grew by 2.6 per cent in 2014. In France it was a meagre 0.4 per cent.
However, on a measure that is crucial for both competitiveness and living standards, Mr Osborne should be envious of what is happening in France. Labour productivity — the amount of output per worker or hour worked — is substantially higher there and, since the financial crisis, has grown faster than in the UK.
Data show that in 2013, output per worker in France was 13 per cent higher than in the UK. But because Britons work longer hours than the French, on a comparison of GDP per hour, the difference jumps to a whopping 27 per cent.
Over the past two decades, French workers have, on average, been 20 per cent more productive than their UK colleagues. But the gap in output per hour worked has grown wider since the crisis. While labour productivity in the UK in 2013 was exactly where it was in 2008, in France it rose by about 3 per cent.
The trouble for the chancellor is that the gap between the countries is not the result of French exceptionalism. Output per hour worked in France was roughly on a par with Germany and just below the US. In the league of the world’s seven most advanced nations, Britain is behind every one except Japan.
The Office for Budget Responsibility, the fiscal watchdog, is confident that, having halted in 2008, productivity growth will return to its pre-crisis trend. But in their twice-yearly economic and fiscal outlook, the OBR’s economists give warning that this recovery will be slow, and may not occur at all.