To wonder why productivity in the U.K. is so low...

[coconuttella]

Germany are 30% more productive... Surely this is the key problem that need some addressing with our economy.... which in turn would support our schools and health service etc. What are we doing wrong, and how do we address it?

I'd agree with that - I now work in Europe and colleagues often ask me to check their English. It's always very minor and often quite tricky points. The quality of their English is generally excellent.
Back in the UK I was pretty shocked at the quality of written English - barely literate graduates sometimes! U no wot I men theirs nothing I can't spell type stuff. Really bad. This was in a scientific employer too :( almost everyone had a degree.
I also heard someone proudly say they never read books at work once and people around her agreed. It's one of the most profoundly depressing things I've ever heard in the workplace.

Industry is important. It creates many types of jobs. Theorists, engineers, skilled manual workers, unskilled manual workers, finance, logistics - everything. I grew up in. Yorkshire steel town and the devastation wreaked by thatcher is beyond words.

I'd invest in early intervention, overhaul education so that truly no child was left behind, whether academic or not. Big emphasis on a more holistic curriculum (strong literacy/numeracy along with sciences, humanities, languages and practical skills,) Boost industry, manufacturing, R and D, science based industries. I'd invest a lot in linking up basic research to commercialisation.

We need to start making stuff. It doesn't all have to be cars and ships, it can be wind turbines, monoclonal antibodies, drugs, etc etc.

My DH works in Germany - they have beer at lunchtime and great staff canteens. I think their economy is based more on manufacturing whereas we pursued a service economy more. They seem to have more training and respect for trades etc with stronger unions.

I wonder also if it is linked to the "Mittelstand" in Germany - there are far more medium sized businesses (rather than big companies) there. It had a large effect in the credit crunch, in that the middle sized companies were much more sheltered from the drop in bank funding, because they hadn't over stretched in the first place. More emphasis on keeping the business going than growing exponentially and then bursting and disappearing.

Likewise, if you work for a middle sized business, you are much closer to its workings and can see how your productivity links directly to how the business is doing. If you work for e.g. Tesco, is that link so obvious? And (I think this is the most important, tbh) you can identify with the business and take much more pride in your job, because you know exactly how your job is helping keep the whole business going.

Just a theory!

Industry is important. It creates many types of jobs. Theorists, engineers, skilled manual workers, unskilled manual workers, finance, logistics - everything. I grew up in. Yorkshire steel town and the devastation wreaked by thatcher is beyond words.

Yes!

And industry builds social cohesion.

makeourfuture so why are these EU grants encouraging our manufacturing out of Britain? Why aren't the industries I listed up post being given EU grants to stay in the UK?

The countries which have been given our industries have shocking unemployment rates and the EU is trying to plug this by distributing the work away from the UK. It's not right.

You can't blame Thatcher for everything especially when the EU are usurping jobs right in front of our eyes. There's no denying it.

all about the Mittelstand

We don't make the most of our universities either. We have world class basic research (god knows how with the slashed funding) but we don't link that up and commercialise it. There needs to be a strong push to link up university/research centres with tech incubator hubs. Far too many things are invented in the uk then commercialised elsewhere.

this explains about the EU grant

So the EU were going to give them a grant if Twinings were going to use it for regeneration, but when it became clear Twinings wanted to move to Poland to access a lower wage economy, then the EU didn't give them the funding. So the EU cannot be blamed for that move, right?

grumpy classic mumsnetter who pick up on the ONE mistake I may have made but ignores the rest of.my valid point. Good one.

Oddly enough we have figured out how to make BAE Systems successful.

You can't blame Thatcher for everything

I can.

I can piss it.

PuckeredAhole you said:

The EU have manipulated where companies set up shop. For example, Twinings tea which has always been manufactured in the UK was purposefully moved to the mainland to create jobs there. That's why OUR productivity is low.

I responded by showing that the EU did not do this, it was Twinings that made the decision, and you have accepted this. So great, we have shown that your first post was wrong. TBH, why should I spend time disproving each and everything you say - could you not just fact check first? I have stuff to be getting on with you see .

Puckered you actually paraphrased a pro-Leave diatribe about EU grants and loans being used to tempt UK companies to move to Europe which has been pretty well debunked - Twinings, Metal Box, Kraft (Cadburys), M&S, Dyson, JLR etc did move production but without EU funding. The only one that had any kind of truth in it was that Ford used an EU loan to revamp its Turkish factory (which was already building the majority of transits) around the same time as the Southampton factory closed. To put this in context, this loan was one third of the size of loan that Ford received from the EU to develop green vehicles in the UK.

Why aren't the industries I listed up post being given EU grants to stay in the UK?

The UK automotive industry has received £3.5 billion in EU R&D funding.

But, thanks to Brexit, EU funding will become a thing of the past.

The UK's low productivity (it's not only low compared to Germany - it's low compared to France, the US, the Scandinavian countries too) is a bit of a riddle and I think no one actually knows the reason for it for certain - we can only advance theories. Obviously people will advance theories the fit in with their political views.

Personally I think it's because we've spent many decades spending a quarter of our budget on the welfare state - i.e. paying people to be unproductive - rather than investing in education, childcare for working people, and infrastructure.

Not sure why we are comparing ourselves to Germany. The Euro has enabled Germany to borrow at very low interest rates and increase its exports to other Euro countries without any currency appreciation that would normally come with it. So Germany is sucking wealth from other countries in the Euro and there is nothing they can do to stop it because the Euro has been designed that way. Massive inequality.

Germany likes to run surpluses, for some strange reason the UK likes to run deficits. So Germany can afford to invest to boost productivity whilst the UK just ends up paying more in debt interest.

Cheap unskilled labor from the EU means companies don't need to invest in skills or equipment. Productivity goes down.

Also the UK did develop a benefits culture where it became normal to expect the state to provide for you rather than working harder. How many times have we heard that people couldn't afford to work more/at all because they would lose benefits. So productivity goes down.

We need a culture change and it will be hard for a generation but its necessary. The alternative is to let our children and grandchildren face the crises that they will inherit.

Pretty much standard anti EU stuff here, but this is sort of the kicker:

We need a culture change and it will be hard for a generation but its necessary.

Even if this "pain" existed (it doesn't), we need to heap it on the next generation?

*No.

One word: Thatcher.

On these boards we often hear that ideology doesn't matter. It does.

Thatcher's move to monetarism was specifically designed to make finance the foundation of the British economy. But more than that it was an ideological philosophy which relegated industry to the second (or third) tier.*

Yes, but a couple of small problems with that as a final answer:

1. Economically speaking the country was about six weeks from us having to kill and can the poor for food when Thatcher started out - in the short term her approach saved the UK economy - nobody can credibly dispute this even if they take a dim view of everything about her.

1. We've had a lot of governments/politicians since then, some of which made it abundantly clear they understood the pitfalls of monetarism initially, and then failed to invest in industry in an effective way, perpetuating the problem and squandering money/borrowing on everything but this aspect our economy so crucially lacks.

1. the strong currency, heavy regulation, trade issues and other factors have made British industry quite difficult to build up

On a positive note, Brexit will compel investment in real industry and make it more viable. Who knows, one day the underclass that was the working class will eventually have jobs and be valued... even if the road will be long and hard.

There's supposed to be a "maybe" in that last sentence, although I like it without, injects some optimism.

nobody can credibly dispute this even if they take a dim view of everything about her.

Yes we can, every easily - but it won't gain any credibility from the Thatcher apologists. She wasn't a saviour or an economic genius, she was an opportunist populist. Unemployment was at an historic high when she took over using the slogan "Labour isn't working". In no time she'd managed to more than double it, in spite of repeatedly gaming the figures. If she hadn't engineered the Falklands in 1982, she'd probably have been a one-termer.

She was not our saviour - she sold us down the river for her own short term political gain and we are still paying the price.

I am sick of this bollocks revisionist history that rewrites her in glowing terms - she was an opportunist who never gave a shit about the UK.

Productivity requires investment. Britain just doesn't invest as most firms can just increases the hours for a few people to make up the shortfall.
The only way to increase productivity is to remove the availability of cheap labour to encourage investment and thinking. That's probably not required though as while the Government claims record employment we don't know how much of that is full time work and how much of it is part time work where there is the capacity for productivity issues to be fixed by just giving their minimum wage workers a few more hours.
TL/DR
Why be productive when you work 16hr pw, enjoy sitting in the garden and have the state pay the balance with tax credits.

Increased use of admin type computers also has a part to play. Back in the days you had a typing pool and bosses bringing in the business with the intermediate levels doing the work that needed to be done - and each layer specialising in JUST that.

Now everybody is typing up their own specs, emailing clients, doing the job, typing up reports on it, arranging meetings etc etc etc. Work seemed much more productive when I just got on with "the job" - the ACTUAL job in hand rather than wasting so much time on peripheral stuff that someone with different training to mine is better specialised to do.

Mumsnet!!

The other reason that Brits don't invest is because we don't really have a culture of individual retail investment, so the ordinary man in the street doesn't understand - and therefore doesn't see the purpose from a business perspective - productivity gains through investment.

It may be something to do with the UK spending something like £25 on housing for every £1 in productive investment.

And then you have in the huge public sector here in the UK. Whilst many on the front line work very hard, there is a huge cabal of very highly paid fuckers who never actually do anything useful.

One word: MUMSNET