Comparing the UK with other countries is not easy, because of differences in national definitions and measurements.

This can be partly overcome by using standardised measures of unemployment and employment published by trans-national agencies such as Eurostat or OECD.

Even using these “standardised” measures, care must be taken in comparing countries.

The UK, for instance, has a much higher incidence of part-time working than, say, Germany or France.

The latest Eurostat figures show that the UK is well placed in the EU league tables.

The UK employment rate in Q1 2009 was 70.4% and compares with the EU average of 64.6%. It is the same as Germany and higher than France, Italy, Spain and the Benelux countries.

Even the unemployment rate in the UK (7.5%), although on the rise, looks good against France (9.4%), Germany (7.7%), and Spain (18.1%).

The relative flexibility of the labour market is in large part a legacy of legislative and regulatory changes during the 1980s.

It is widely thought that this enhanced flexibility is a major reason why unemployment is lower in the UK than on the Continent. In recent years, however, new regulations (such as the minimum wage, and enhanced legal rights for employees) may have narrowed this advantage.

At the same time, other countries in Europe have attempted to increase the flexibility of their labour markets. Spain and Italy, for instance, have made it easier for employers to use fixed-term contracts so avoiding the inflexibility of hiring and firing associated with permanent workers.

In Germany and France (the two biggest economies of the eurozone), unemployment rates have been stubbornly high even when the economy was growing. It is widely believed that this in part arises from those countries’ traditionally higher levels of regulatory protection for employees in their relationships with employers. Attempts at serious reform in this area will, however, face still political opposition.

See Table 11.7: Employment and unemployment rates, Q1, 2009