Public Support in the United Kingdom

Abstract

In the United Kingdom, public support to business, supervised by the Department of Trade and Industry (DTI),¹ was for a long time dominated by regional development concerns. Indeed, regional policy has been the mainstay of industrial policy in the United Kingdom postwar, based on a recognition of the need to reduce regional disparities in employment, earnings, and the cost of living. Regional policy itself has undergone a number of incarnations but to date its most enduring feature has been the Regional Selective Assistance (RSA) scheme, which was introduced in 1972. Designed as a discretionary capital subsidy linked to the creation and safeguarding of employment, it operates in Assisted Areas only and is primarily directed towards manufacturing (often foreign-owned) companies. Although RSA is explicitly designed to assist certain regions of Great Britain, it also implicitly helps to build up the science and technology base of industry in those regions. A significant proportion of aid goes to small firms (Harris and Robinson, 2004). In contrast to the RSA scheme, two programmes (SMART, SPUR) are explicitly aimed at encouraging innovative activity in the Small and Medium Enterprise (SME) sector. They were launched in 1986 but became fully operational in 1988, and since then have undergone various transformations and amalgamations.