David Frost - Director-General

It is my pleasure to introduce this edition of Public Service Review: Trade and Industry. UK businesses are increasingly competing in a truly global marketplace, characterised by ever more sophisticated firms and low cost economies. With the newly elected Government emphasising its commitment and determination to improve the UK’s business environment, and with the UK holding the Presidency of the EU, I believe we now have a real opportunity to increase our competitiveness, and achieve higher levels of growth and productivity. To do this, the UK Government has a vital role to play and I would suggest that there are three core priorities.

Firstly, a reduction in the regulatory burden. I acknowledge that regulation is sometimes necessary; however, businesses are sinking under the extra £38.9bn burden that the Government have added since 1998. Our priority is to ensure that all rules made by government for business impose no unnecessary burden.

We have been lobbying for a precise measurement system across all Departments, achievable targets and valued incentives to cut regulation. We broadly support the Hampton Report and Better Regulation Taskforce Report. But the message from business is clear – the Government must implement lasting reform and achieve a net reduction in the regulatory burden.

Secondly, there must be a renewed drive by the DTI to improve the provision of business support, whether this is through targeted business support schemes, international trade promotion or a role in fostering enterprise. Because they provide services that are designed and driven by the businesses they serve, I believe that the Chamber of Commerce network can help in many of these areas and can increasingly take on a role as the natural delivery mechanism of government services to business.

Finally, I believe that the current emphasis on R&D is extremely important. If the UK is to successfully compete through value added goods and services, our levels of investment must be raised. We are below the EU average for R&D investment and far behind the United States. India and China are catching up fast. We support the ambitious target to raise R&D investment to 2.5% of GDP. The Government and business must work together to achieve this objective.

The competitive pressures facing British firms are greater than ever before. It is vital that the Government and business rise up to the challenges we now face to ensure that the UK can continue to successfully compete in the global marketplace.