Britain’s green and pleasant land is being bought up by “townies” looking for a rural retreat, estate agents report today.
Nearly half the number of people buying farms in the countryside are not farmers, according to the latest rural land survey by the Royal Institution of Chartered Surveyors (RICS). Constable must be turning in his grave. Sadly, New Labour has not been any more successful than the Conservatives in raising Britain’s underlying economic performance, and, as so many times in the past, only the strength and duration of a consumer boom has hidden this uncomfortable truth from public view.Christopher Smallwood is the Economic Adviser to Barclays This column is a personal view.Stephen King is on holiday.. Compared with France and Germany, Britain lags behind mainly because it employs less capital per worker (and to a degree because, especially in relation to Germany, its labour force skills are inferior). This is also part of the explanation for the productivity gap with America – although their productivity has also been enhanced by a superior rate of innovation (total factor productivity) The figures are dramatic. The amount of capital per hour worked is 25 per cent lower in the UK than in America, 32 per cent less than in Germany and an extraordinary 60 per cent less than in France.

This shows that productivity (output per hour worked) in Germany and France is about 20 per cent higher than the UK level, and in America about 40 per cent higher.In terms of the general level of prosperity (output per head of population), Britain has largely drawn level with France and Germany. But this is because British people have been working longer hours while those on the Continent have been working less – longer hours have meant that output per person employed has been rising faster here than on the Continent.At the same time, the participation ratio, the proportion of the population going to work, has also been growing here. In short, we have kept up, despite relatively low levels of productivity, by more and more of us working harder and harder. It can’t go on – which is why Mr Brown has described raising productivity levels as Britain’s greatest challenge.Why does productivity in the UK lag behind? The second chart gives the answers. But what happened? The first chart shows that investment crashed during the Labour years – shrinking spectacularly last year and scarcely growing this.

With the balance of payments in heavy deficit, continued reliance on consumers (including, latterly, public sector consumers) to keep the economy going was total. It is not just that little progress has been made towards turning Britain into an investment society – under New Labour, we have gone backwards.All this is deeply disappointing because Mr Brown’s original diagnosis was perfectly correct. There is a big gap in economic efficiency between the UK and its main competitors, much of which is connected with lack of investment, and it needs to be addressed if Britain’s long-term economic performance is to improve. It may come as a shock to those who have taken at face value the claims of successive governments that they are living in the most successful and dynamic economy in Europe, but levels of efficiency are in fact substantially higher in France and Germany, as well as in America, than they are here.The current position is illustrated in the second chart, reproduced from a research paper commissioned by the Department of Trade and Industry from Professor Michael Porter of Harvard. Mr Brown returned to the theme after the last election, when he declared that, having restored stability, the central challenge now was to address the fundamental weakness of the economy and close the productivity gap with our principal competitors.Admirable sentiments. Back in 1997, the New Labour economic programme was all about investment.