Productivity (Hansard, 18 July 2003)

§ Ms Hewitt

The Government's approach to raising productivity centres on maintaining macroeconomic stability to allow firms and individuals to invest for the future, as well as implementing microeconomic reforms to remove the barriers which prevent markets from functioning efficiently. The Government are addressing historic microeconomic weaknesses in five areas that drive productivity growth—investment, innovation, skills, enterprise and competitive markets.

Following the recent review of DTI structure and priorities, the Department has been reorganised in order to put productivity and competitiveness at the heart of our activities. The Department's mission, reflecting the Government's five drivers, is centred on the three objectives of world-class science and innovation, successful business and fair markets. In order to enhance the DTIs capacity to achieve these goals, we are currently working to develop a new strategy. This strategy will set out our longer-term direction; allow us to meet the expectations of our key stakeholders and guide the annual business planning process. The strategy will make the maximum use of the evidence base to inform both policy and delivery.

The DTI has already initiated a number of measures which are intended to help drive up productivity. These include: publishing the first Manufacturing Strategy for thirty years and launching the Manufacturing Advisory Service; working in conjunction with the Department For Education and Skills, the Department for Work and Pensions and the Treasury to produce the recent Skills Strategy White Paper, which contains measures to improve the skills of Britain's work force; introducing the Enterprise Act 2002, which will make UK competition and insolvency regimes amongst the best in the world according to independent observers; increasing funding for science, engineering and technology from £8.46 billion in 2002–03 to £8.61 billion in 2004–05 in real terms. This includes £1 billion investment in the research infrastructure; levering in £330 million extra capital to small firms through the Regional Venture Capital Funds; announcing a review of innovation policy that will set out a strategy for improving innovation performance in the UK The findings of the review will be published later this year.