A comprehensive plan to improve the productivity of UK businesses has been published by the Treasury.
The policy document identifies 2 areas that the government regards as key to stimulating productivity in the UK: long term investment and a dynamic economy.
Long term investment
The government has the aim of cutting £10 billion of red tape by 2020. Long term investment will be generated through tax reform, innovation and upgrading infrastructure:
- Business investment
Lower corporation tax rates, lower personal taxes and more generous capital allowances will support long term business investment.
Increasing emphasis on apprenticeships and building a globally-recognised university system will combat the skills shortage.
Upgrading transportation, energy and digital infrastructure is essential to bringing the UK economy into the 21st century.
The government will continue to invest in scientific and technological innovation.
A dynamic economy
Labour market reforms, increased support for exports and deregulation have been identified by the government as essential to promote a dynamic economy:
- Market reform
Planning permission reforms, lower state welfare and more employee benefits such as free childcare have been outlined by the government.
A New Bank Unit within the Financial Conduct Authority and Prudential Regulation Authority will ensure finance is provided for productive investments.
The government has committed itself to cutting £10 billion of red tape and exporting £1 trillion worth of goods and services by 2020.
Business Secretary Sajid Javid said:
“This is a bold and ambitious plan, to achieve our vision of a more dynamic economy, with a business environment that fosters long-term investment, raising our living standards and become the best of all the major economies by 2030.”
Daniel Godfrey, chief executive of The Investment Association, said:
“It is crucial that Britain solves its productivity problem so that the economy can deliver rising standards of living and healthier public finances.”