The UK’s lack of language skills essentially constitute a £7.3bn annual ’tax on trade’ for the country, according to a report published yesterday by the charity the Education and Employers Taskforce.

The report suggests that changing the perception of young people that language skills will have little importance in the labour market is a major barrier to up-skilling the UK in this area.

A 2006 European Commission study showed that the UK has the worst language skills in Europe, and has been in decline since the 2004 decision to remove the compulsory status of taking a language at GCSE.

The report also shows that it is regularly the schools whose pupils enjoys the fewest social and economic opportunities who are least likely to make languages compulsory.

Former Treasury economic adviser and now Cardiff University professor, James Foreman-Peck, explains that the lack of language skills in the UK constituted “the equivalent of between a 3-7% tax on British exports. Since exports are about one quarter of GDP, the impact is substantial. At stake in 2009 was a minimum of £7.3bn.

“It would be worth spending up to this sum on improving language skills if the outlay brought British proficiency to the world average by reducing language-induced trade costs.”