Britain still outpaces its European rivals.
BRITAIN has topped the European league table for wealth creation, with its leading companies generating more value and doing so more efficiently than their continental rivals, a study shows today.
A report from the Department of Trade and Industry reveals that European value added — defined as the money a business generates when its costs are deducted from its sales — is concentrated in the UK, France and Germany, with Britain in the lead.
Among the 700 major companies across Europe surveyed by the DTI, those based in Britain generated 25.9 per cent of value added, up from 24.2 per cent last year, implying that UK firms are increasingly profitable.
Both France and Germany have seen their share of value added DECLINE in the past year: France’s share fell to 20 per cent from 20.7 per cent, while major firms in Germany, Europe’s biggest economy, created just 18.5 per cent of new wealth compared with 19.3 per cent the previous year.
The report contains a value added scoreboard, topped by Shell and BP, which it lists as having generated £31.6 billion and £26.8 billion of new wealth respectively in the past year.
Mike Tubbs, an industrialist who compiled the scoreboard for the DTI, said that it showed that French and German strategies to boost “national champions” in every sector were not as successful as Britain’s more open approach.
He said: “We have got a good sector mix. We tend to have quite a high presence in the sectors which give a higher return on inputs, and a lower presence in the sectors which have lower returns but high investment requirements, such as the automotive, electronics and engineering sectors.”
The top company for wealth efficiency, which created £3.74 of new wealth for every £1 spent, was Mediobanca, Italy’s largest investment bank...
The worst-performing listed company in the survey for wealth creation was Alitalia, the Italian airline, which generated 49p for every £1 spent last year, the report showed.
Alistair Darling, the Secretary of State for Trade and Industry, said: “This is an outstanding performance from UK companies across a wide range of business sectors. Their wealth creation is a firm foundation for continued UK prosperity.”
He said that British competitiveness depended on companies’ ability to create higher levels of value added through innovation.
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