The government is to invest £725 million into new Industrial Strategy programmes over the next 3 years, with the aim of boosting flagging business productivity.

Businesses in the construction sector should be able to benefit from £170 million of the funding, which is designed to provide more affordable housing.

Ministers will also review ways to improve SME productivity and promote growth, including the most effective way to address the so-called long tail of lower productivity firms.

Meanwhile, prime minister Theresa May increased the level of research and development (R&D) investment, rising from 1.7% to 2.4% of GDP over the next 10 years – worth up to £80 billion.

Adam Marshall, director-general of the British Chambers of Commerce, said:

“We are pleased the concerns and ideas of business communities have been listened to.

“We have been clear that harnessing the potential of our cities, towns and counties is crucial to make our country more competitive and prosperous.

“It is crucial the government listens to the full range of business voices when developing local and sector-based deals, so firms of all sizes and sectors can buy into the Strategy for years to come.”

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