Now Rishi Sunak nods to Berlin. Do the Germans do everything better?

One of the well-trailed measures that the Chancellor is announcing today is the introduction of a new programme of job subsidies for employees returning to work on a part-time basis. Intended to replace the furlough system that has preserved millions of jobs, but at a monthly cost to the Treasury of £4 billion. The part-time scheme would cost a fraction of this: an estimated £500 million a month. The latter also has the advantage of longer-term viability, unlike the “zombie jobs” that are expected to disappear when the furlough scheme ends on October 31.

Rishi Sunak’s latest wheeze to stave off the steadily rising tide of unemployment comes with a “Made in Germany” label. In the Federal Republic, Kurzarbeit, or “shorter work-time”, has been an established policy tool since the 1970s and has been widely imitated abroad since its success during the 2008 crash. Under the German system, during a recession or downturn, firms can apply for subsidies in order to hang on to skilled workers on a part-time basis.

Normally, the state pays temporarily laid-off employees Kurzarbeitgeld while they are not working, with the employer paying them when they are at work. Staff are guaranteed 60 per cent of their normal wages, but are normally able to earn considerably more. Between two and three million German workers have benefited during the pandemic, twice as many as in the financial crisis. Thanks largely to Kurzarbeit, Germany has avoided surge in unemployment seen elsewhere in Europe and America. In the second quarter of 2020, the German economy shrank by 10 per cent but unemployment hardly rose at all.

One of the beauties of Kurzarbeit is its flexibility. The version favoured by the Chancellor would offer staff a third of their wages while they were not working, with companies paying another third. Workers would lose the remaining third, but would have at least 50 per cent part-time work guaranteed and paid for by their employers. The Government hopes that such jobs would outlast the restrictions necessitated by the pandemic.

This is not the first time in the present crisis that the British have borrowed ideas from Germany. The new National Institute for Health Protection, announced by Matt Hancock in August to replace some of the functions of Public Health England, will be closely modelled on the German Robert Koch Institute. The latter was founded as early as 1891 by the eponymous Robert Koch, a pioneer of bacteriology who made his name as the conqueror of cholera. Nowadays, the Koch Institute serves as the Federal Republic’s official research body, responsible both for monitoring public health and for controlling and preventing infectious and non-communicable diseases. It has acquired a high reputation for responding to epidemics, including Covid-19.

Some commentators have suggested that Britain should have followed the German lead on coronavirus in many other ways, too, especially given that the German death rate has so far been a fraction of the British one. Whether in testing, tracking and tracing or in providing equipment and medicines, the Federal Republic can boast a much more impressive record than the UK. The German Health Minister, Jens Spahn (pictured above), is modest about this record; thanks to these achievements, however, he is a rising star in his country’s political firmament.

Yet a man like Spahn would never endorse the sentiment expressed in the title of John Kampfner’s new book: Why the Germans Do It Better (Atlantic, £16.99). Kampfner’s otherwise excellent analysis of contemporary Germany errs on the bombastic side by contrasting this “grown-up country” with the British, who are depicted as a nation of infantile politics, mired in their imperial past. Not only is this an unfair caricature of the UK, it also misses the main reason why Germany was less damaged by the pandemic: a modern, insurance-based, decentralised health system, plus one of the world’s biggest pharmaceutical industries. The NHS simply can’t compete.  

The truth is that both peoples have their strengths. It is British universities, not German ones, that are now leading the world in the pursuit of treatments and vaccines for Covid-19. German corporations are world-class at engineering, but London is still Europe’s financial capital. In many ways, the accomplishments of these two countries complement one another. Millions of German cars are manufactured in the UK, just as thousands of German entrepreneurs prefer to start up new companies here. But the last decade has seen a thriving community of highly educated Britons move to Berlin to take advantage of easier living conditions there than in London. Technology is as international as the English language. Brexit or no Brexit, the integration of what might be seen as the Anglo-German economy is unstoppable.

So Rishi Sunak deserves credit for having the confidence to adopt a German job-retention scheme without fear of ridicule. Admiration for the Federal Republic has never been higher, but it does not have to be tinged with envy or soured by resentment. Germans can and do feel flattered by British imitation of their economic triumphs. They know very well that they have the British, among others, to thank for the fact that Germany today enjoys freedom and prosperity. Neither nation has a monopoly of wisdom or of virtue. We need one another as much, or even more, than ever.