§ Mr. Heathcoat-AmoryTo ask the Secretary of State for Trade and Industry what assessment she has made of her Department's measures over the last Parliament in respect of the targets for raising UK productivity. [295]
§ Ms Hewitt[holding answer 25 June 2001]: During the last Parliament the Government set out their comprehensive strategy for meeting the productivity challenge in "Productivity in the UK: The Evidence and the Government's Approach", which was published alongside the November 2000 pre-Budget Report. The Government have also published major White Papers on enterprise, skills development and on science and innovation policy.
The Government's policy is based on the twin principles of delivering macroeconomic stability, to allow firms and individuals to invest for the future, and implementing microeconomic reforms to remove the barriers which prevent markets from functioning efficiently.
87WDuring the last Parliament the Government introduced a number of measures aimed at raising UK productivity consistent with the twin policy approach; for example we:
encouraged enterprise and innovation, including through the tax system, with reductions in corporation tax and capital gains tax, the introduction of R&D tax credits for small firms and 100 per cent. first year capital allowances for SMEs investing in ICT equipment;created the Regional Development Agencies to drive forward growth in every region;strengthened the competition regime via the Competition Act 1980;increased real investment in the UK science base to reverse years of decline and encouraged business innovation through significant knowledge transfer funding including for the Higher Education Innovation and University Challenge Funds and Faraday Partnerships;made substantial investments in education and training;created the Small Business Service and Manufacturing Advisory Service to improve the services and environment for small firms;launched the joint CBI/TUC productivity campaign;instituted a new regulatory structure to promote competitiveness in the energy supply industry.The Government are clear that having set a sound framework for investment and growth, further radical reform is needed to tackle the challenge of enterprise and productivity. To this end, the Government recently published "Productivity in the UK: Enterprise and the Productivity Challenge" which sets out measures to remove obstacles to innovation and competition and to create an enterprise culture, open to all. We are introducing measures to reform the competition regime, to encourage small businesses to start, innovate and grow, and to raise the quantity and quality of investment in the public and private sectors.