Promoting productivity and enterprise

The amount of output produced per worker ­ productivity ­ in Britain has historically been lower than in other major economies. Closing the productivity gap will help to deliver further resources for tackling poverty and improving public services, ensuring higher living standards in years to come.

Budget 2002 announces new measures for business to boost enterprise and raise the UK's productivity performance:

a reduction in the starting rate of corporation tax from 10 per cent to zero and a 1 per cent cut in the small companies' rate;

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reducing red tape and compliance costs imposed on small businesses by the VAT and payroll administration systems;

further stamp duty exemptions for business and new tax incentives to promote enterprise and investment in disadvantaged communities;

a new tax credit to boost research and development (R&D) by large firms, complementing the tax credit already available for small firms; and

piloting new measures to improve access to training and enable lower-skilled people in employment to upgrade their skills.

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