The plan is ambitious and involves the expenditure of an unprecedented sum of £23 billion between 2017 and 2021-22. The profile of that expenditure is optimised so that it has the greatest impact on productivity outcomes.
Crucially, the Green Paper sets out three key challenges that we must face up to, now and in the years ahead. First, we must build on our strengths and extend excellence into the future. The UK has real strengths, but we cannot take them for granted. We need to invest in research and development, develop our infrastructure, and make ourselves ever more attractive to inward investment. That is why we announced an additional £4.7 billion by 2020-21 in R and D funding at the autumn statement. This extra £2 billion a year by the end of this Parliament is an increase of around 20% to total Government R and D spending, and more than any increase in any Parliament since 1979. Chi Onwurah offered empty promises, but we are delivering hard cash, and I know which I prefer.
The second challenge is to ensure that every place meets its potential by working to close the gap between our best performing companies, industries, places and people, and those that are less productive. We have sectors and businesses that are among the most productive in the world, but we also have too many that lie far behind the leaders. Driving up our productivity across the country means that we must enable those industries and regions that lag behind to achieve their potential. Members asked what it is that creates these divergences in regional productivity. This is a complex phenomenon, as many factors drive differences in growth and productivity, including weaknesses in infrastructure and connectivity, different levels of qualifications and skills, different levels of R and D investment, which tend to be correlated with lower levels of productivity, and many other factors.
It is important to note that there are other structural factors, including the quality of management in our companies, which is why the Government are providing significant resources to support the UK’s business-led Productivity Council, which is to be chaired by Sir Charlie Mayfield. This will provide strong and sustained leadership, help support business-to-business engagement and improve productivity across the business community, which is something that my hon. Friend Richard Fuller wanted us to do.
Thirdly, we need to make sure that the UK is the best place in the world in which to start and grow a business. The UK has a strong record on business start-ups, but too many fail to scale up into the big employers of the future. Through the industrial strategy, we will aim to identify and address the barriers that many businesses face to scaling up and growing. We have invested an additional £400 million in the British Business Bank to catalyse later-stage capital investments by the private sector, and we will work with it further to understand the obstacles that firms face in accessing capital outside London and the south-east. By responding to all the challenges presented by each of the strategy’s 10 pillars in a rigorous and strategic way, we will be able to achieve our objective, which is to improve living standards and economic growth by increasing productivity across the whole country.
If we want to create a country that really works for everyone, then we need to address this productivity issue. We want to see the same high level of success witnessed in Britain’s best-performing companies, industries, people and places in those areas that are still lagging behind. We plan a bold, new and collaborative approach to industrial strategy in the UK. This is a new approach with the Government stepping up, not stepping back. I am talking about designing an industrial strategy in collaboration with people and organisations across the country, and not imposing it from Whitehall. We recognise our productivity challenges, and we also recognise where we can make improvements and build on our strengths to make the UK a more productive and prosperous economy.