Budget 2003: Plans to narrow productivity gap
Gordon Brown, in the Budget, announced he intends to narrow the productivity gap with the US through extra investment and tax exemptions.
Link: Budget special
The productivity gap with the US continues to be between 20% and 30%. Brown blamed the gap on poor innovation investment and intends to increase this from 1.9% to 2.8% of GBP in line with the US.
Brown believes he can find an extra £1.25bn by broadening the definition of what activities fall under research and development. In addition, he has asked the Inland Revenue for help, by allowing more tax exemptions for research and development