Another 'yellow card' for Brown, how long before this charlatan gets sent off ?................
"....countries rarely carry out significant reforms to their economies without being prompted by a recession or crash.
"It isn't often that countries are wise enough to adapt pro-actively and often you have to wait until there is real pain to make some big, important changes," he said.
"You have to reach a crisis situation to bring in very strong reforms."
'Yellow cards' put Brown on back foot (Filed: 08/02/2006)
OECD warns Chancellor he must do better, and fast, writes Edmund Conway
The Chancellor must overhaul the way the Government funds research and mend Britain's crumbling transport infrastructure and health service if he is to pull the country out of its productivity ditch, the Organisation for Economic Co-operation and Development said.
The Paris-based think tank said Britain must act fast, following recent news that annual productivity growth - a key measure of economic performance - dropped to the lowest level in 15 years, at just 0.4pc. It said it was handing the UK five "yellow cards" as a warning.
Despite previous warnings, not enough progress had been made in these areas: the benefits system, education, transport, health and planning regulations.
The news will come as a blow for Mr Brown, who intends to fight the next election on his economic record. He has recently promised to improve the UK's productivity record for the public and private sectors, but with little evidence of success.
The OECD revealed that expenditure on research and development was lower than in any other major developed country in 2003, the most recent comparable year.
Furthermore, it discovered that between 1991 and 2000, the intensity of R&D activity in the UK fell at a faster rate than the 18 other biggest economies in the Western world.
This was a sign not just of underfunding, it said, but was also a symptom of poor skills standards and too much new red tape.
It said the Chancellor's much-vaunted R&D Tax Credits left many smaller companies in the cold. It added that Britain's poor education system was also holding the country back.
Jean-Philippe Cotis, the OECD's chief economist, said even taking into account Britain's shrinking manufacturing sector, its innovation showing was "far from outstanding".
One problem is that education and skills levels are far worse for those over the age of 40 than in most Western nations, he claimed.
"People in their 20s are much better educated, but that takes time to show up in productivity statistics," he said. "One other important worry is that there are strong rates of drop-outs from secondary education.
"We have calculated that if you increase R&D by 0.1pc, you increase GDP [economic growth] by 1.2pc."
The skills warning may hurt the Chancellor, but it will not come as a shock. The Leitch Report he commissioned last year discovered that a third of UK working-age adults do not have a basic school-leaving qualification, and 5m adults have no qualifications at all.
Mr Cotis said that although the Government has recently launched a series of initiatives aimed at improving the skills gap, it was too early to tell whether this will have a lasting effect.
The economic impact of Britain's ageing transport system is also profound, Mr Cotis said. Little progress has been made despite warnings late last year.
"The philosophy is fine but the gap with other countries is huge," he added. "There is so much to be done."
Also pledges to overhaul planning restrictions "are more intention than effective action".
Shadow chancellor George Osborne said the findings were yet more evidence of why UK Plc was failing to maintain its momentum in recent years.
"Gordon Brown said that productivity was the fundamental yardstick of Britain's economic performance, and now we can see on his own yardstick that we are failing," he said. "The worrying sign is that on key issues ... we are falling behind our competitors in a fiercely competitive global economy.
"We will have to pay the price for this soon as our economy fails to keep up with changes across the world."
A Treasury spokesman said: "The UK has an excellent research base, second only to the US in volume and influence of scientific publications."
The OECD's criticisms were part of a wider study investigating what the world's biggest countries need to do to improve their economic performance.
Taking the US as a benchmark, the study handed out recommendations to all major economies on reform.
Mr Cotis warned that countries rarely carry out significant reforms to their economies without being prompted by a recession or crash.
"It isn't often that countries are wise enough to adapt pro-actively and often you have to wait until there is real pain to make some big, important changes," he said.
"You have to reach a crisis situation to bring in very strong reforms."
But Mr Cotis praised the Bank of England for the way it has brought inflation under control and kept interest rates low.
Despite the rising tax burden, he also said the tax climate is not a major impediment to productivity growth.