The forecasts were prepared by Bob Anderton, Andrew Britton and Soterios Soteri, but they draw on the work of the whole team engaged in macroeconomic analysis and modelbuilding at the Institute. Parts One and Two of the chapter are written by Andrew Britton, Part Three by Bob Anderton and Soterios Soteri.

GNP growth in the major seven economies continues to decline from the cyclical peak reached in 1988. The latest national accounts statistics show that all major seven economies are now growing more slowly than they did last year, with the United States, United Kingdom and Canada in recession. This slowdown in activity appears to have been caused primarily by the tightening of monetary policy that occurred between 1988 and 1990. Short-term interest rates rose by 4.4 percentage points in Germany between 1987 and 1990, by 3 percentage points in Japan between 1987 and 1990, and by 2.2 per cent in the United States between 1987 and 1989.

Previous international comparisons of workforce skills by the National Institute have focussed on the relative shortage of craft skills in Britain. The present study is concerned with the next higher level of supervisory and technician skills; on the basis of visits to factories and technical colleges in Britain, France and Germany, and analysis of labour force statistics, it compares and contrasts the provision and deployment of these intermediate skills in manufacturing industry in the three countries. At supervisory level only Germany undertakes a significant amount of training and to standards adequate to the increased complexity and technical demands of modern manufacturing. At technician (Higher National) level, the numbers acquiring comparable qualifications in Britain and France are substantially higher than in Germany: in part this reflects the allocation of a large proportion of technical support functions in German industry to craft-trained personnel. After examining the relative distribution of training costs between employers, individuals and the public authorities in the three countries, the paper makes proposals for a more cost-effective mix of craft- and technician-level skills in British manufacturing which might, in the process, reduce the need for over-qualified personnel to ‘plug the gaps’ in skills among shopfloor workers and supervisors.

While the need for a greater volume of vocational training is widely recognised, it is unlikely to be achieved entirely by labour-market forces. This article, drawing on an investigation of British and German firms with skill shortages, considers the ways in which government can promote transferable training. Attention is given to coverage, likely costs, and the scope for sharing those costs with the private sector. Programmes already operating in the UK are identified and assessed, and some future approaches suggested.

This Note considers three questions bearing on the reform of vocational qualifications in Britain, against the background of changes being introduced by the National Council for Vocational Qualifications. First, in what important respects did Britain need a reformed and centrally-standardised system of vocational qualifications? Secondly, what are the proper criteria for choosing between alternative methods of awarding qualifications? Much that is at issue hinges on the relative importance of externally-marked written tests as compared with practical tasks assessed by an instructor; the discussion and conclusions reached here in relation to vocational testing apply in large measure also to current debates in other contexts, such as the proper role of teacher-assessed coursework in school examinations at 16+ (GCSE) and the official teacher-assessment of pupils at age 7 (SATs) currently being administered in British schools for the first time. Our third question is: in what significant ways do Continental systems of awarding qualifications differ from those now proposed for Britain?

This article examines the conditions under which social policy would be constrained by European economic integration and assesses whether a Social Charter is needed. It provides a framework for interpreting the ‘principle of subsidiarity’, examines the potential for a direct effect of social benefits on the movement of people within the EC, investigates the impact of the taxes used to finance social policy on the location of businesses and people and the incidence of these taxes. As the degree of labour mobility in response to differences in real wages between EC countries is demonstrated to be crucial in deciding whether a Social Charter is necessary, a substantial part of the paper examines the evidence on the responsiveness of labour mobility, and it suggests little need for a Social Charter.