Economy: Productivity

Lord Gadhia Excerpts

Thursday 28th June 2018 Lords Chamber

[Lord Gadhia (Non-Afl)]

My Lords, the chairman of John Lewis, Sir Charlie Mayfield, has also examined the UK’s productivity puzzle and he found there is significant variability in productivity for SMEs. Can my noble friend say what support we are giving SMEs to improve their batting average?

[Lord Bates]

There are incentives for R&D spend. We know that things such as infrastructure and capital investment—we have had a patient capital review—contribute to improvements in productivity. We know that education and skills are a key part, and that is why we have T-levels and the apprenticeship levy. We also know that investment is very important, and that is why the capital breaks we have for R&D, particularly in small firms, are very important. But this is a whole-economy effort in which small and medium-sized enterprises, as well as the large companies, need to play their part.