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Last Updated: Thursday, 13 October 2005, 10:58 GMT 11:58 UK
Brown's battle plan for Europe

By Evan Davis
BBC Economics editor

UK Chancellor Gordon Brown
Gordon Brown - economic saint or sinner?

It's not often Chancellor Gordon Brown pens a pamphlet and publishes it in his own name. In fact, it's not often the Treasury publishes anything in any individual's name.

So the fact the Treasury published a personally authored document by the chancellor on Thursday, should make us sit up and take notice.

The paper is about Europe.

The chancellor's central argument is that the old assumption that we progress from our national economies to an integrated European economy has been blasted out of the water by the global rise of China and India - forget the continent, it's the world that matters now.

Europe has to learn to adapt, to compete and be flexible, he says.

The chancellor has long had quite a lot to say about Europe's need to reform.

Growth lessons

Chris Patten always says that when you read Gordon Brown, you think the only decent thing to do is to send food parcels to the poor continentals. Sometimes when you hear the chancellor set out the problems of the continent it's easy to forget that most of Western Europe is about as rich as we are.

The chancellor's words today are perhaps less prone to prompt to food parcels than some others he's written. But he clearly thinks Britain has a fair bit to teach the others on getting growth, and on flexible markets and high employment.

Undoubtedly, some will say the chancellor timed his message badly - after all our economic growth is slowing down.

The chancellor can still crow about growth - at 1.7% we'll still beat Germany and France.
Evan Davies

On Wednesday, an objective and authoritative report on the UK economy from the Paris-based Organisation for Economic Cooperation and Development (OECD) said we might muster 1.7% growth this year.

The governor of the Bank of England has just told us to expect rougher times in the next few years.

The growth we've enjoyed in recent years looks as though it might have reflected less a strong economy and more one driven by consumer spending, fuelled by debt and high house prices.

The rest of Europe could do with a bit more consumer spending - but they may not envy the inevitable spending slowdown we're now facing.

But the chancellor can still crow about growth - at 1.7% we'll still beat Germany and France.

However, there is a more important critique of the chancellor's argument.

Competitive edge

And that is that only one thing really matters when it comes to China, India, and global competitiveness; only one thing determines how rich you are in the very long term - how productive you are or how much value each worker creates for each hour at work.

It's called productivity, and darn it, Britain does not score very well.

In the OECD report, Britain is ranked in the bottom half of the developed world on productivity and on workforce skills. Per hour, British workers produce 20% less than the Germans and a third less than the French.

If we are as rich as them, it's mainly because we work more people for longer hours.

For all their other economic weaknesses, the Europeans may have something to teach us on effectiveness at work.

The food parcels may go both ways across the channel.


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