Anglo-Saxon model offers better jobs and incomes deal

Jun 22 2005 by Brian Amble Print This Article

Far from condemning employees to a life of low wages and long hours, the UK's 'Anglo-Saxon' economic model creates more jobs and delivers better working conditions than its ailing European counterparts.

A report by the Chartered Institute of Personnel and Development (CIPD) – published ahead of Tony Blair's speech to the European Parliament on the official programme for the UK's presidency of the European Union - demonstrates that Britain now operates what might be called an 'Anglo-social model' which has brought with it improvements in workers' rights, higher incomes for low-paid workers, and greater work incentives.

And while countries such as France and Germany struggle with rising unemployment and stagnant economies, Britain's liberal employment market has been good for workers as well as achieving a return to near-full employment.

John Philpott, the CIPD's chief economist, said the facts show that the UK's particular policy combination of managed flexibility, minimum workplace standards and work-related welfare benefits serves both the economic and social interests of the country.

"UK workers on average enjoy higher salaries than their counterparts in major economies like France, and the redistribution of income in the form of tax credits means that the UK also now has a relatively low proportion of working poor by EU standards," the report said.

"Meanwhile, constant talk of the UK's 'long-hours culture' overlooks the fact that the UK approach also enables a relatively high proportion of people to work short hours and helps many women, in particular, to achieve a better work-life balance.

"Likewise, the high level of employment protection offered to continental workers with permanent job contracts results in an equally high rate of involuntary, and often insecure, temporary employment," Philpott said.

"The proportion of employees on fixed contracts averages 14 per cent across the EU – double the UK rate," he added.

The European Commission acknowledged the effect of rigid labour markets in a recent recent report that admitted that Europe is missing out on the creation of 1.5 million new jobs because micro-businesses are being held back by excessive employment regulation and red tape

It found that more than a third do not hire staff because they cannot afford the non-wage labour costs - especially employer's social security contributions.

Other research earlier this month from the Federation of European Employers (FedEE) found that Britain's average work-week is only slightly higher than the overall EU25 average once the effects of short-term absence are taken into account.

Once adjusted, the FedEE suggested that the Dutch have longest fulltime working hours in western Europe at 45.5 hours, while at 44.8 hours a week, average working hours for full-time employees in the UK are similar to those in Austria and Ireland.

The difference can be explained by the fact that employees are absent from work for only 15.5 per cent of the time in the UK, whilst this figure rises to 23 per cent of the time in the Netherlands.

The CIPD figures are broadly similar. UK full-time workers do 44 hours a week compared with an EU average of 40, yet the UK also has a far higher proportion of part-time workers and the average working week for UK part-time workers (19 hours) is lower than the average for the EU (20).

Meanwhile, the CIPD says that the UK lies third in the average pay league behind Luxembourg and Germany – and well ahead of countries like France, Italy and Scandinavian.

Other telling statistics include the fact that the UK employment rate among those of working age is almost 75 per cent, compared to the EU average of 63 per cent, while some 70 per cent of British women of working age are in work, as compared with fewer than 60 per cent in the EU as a whole.

Youth unemployment stands at 11 per cent in the UK, which compares with an average rate of 16 per cent in the EU15 – and more than 20 per cent in France.

Yet only 6 per cent of the UK working population is classed as 'working poor' compared with 10 per cent in Italy and 8 per cent in France and Spain.

"Labour productivity is the only measure on which the UK model appears to falls short," Philppott added. "Yet even this could be accounted for by the relative inability of countries like France and Germany to create jobs for people with low skills.

"True economic success means combining sustained full employment with high and growing productivity. The EU's revamped Lisbon Agenda for structural reform recognises this. but the UK is currently the only major EU economy that looks up to the challenge.

"The peoples of the enlarged EU would appear to have little to lose and much to gain from adopting the UK model."