|E Competitive markets
framework within which businesses, consumers and employees interact is central
to productivity and competitiveness. The framework sets out the rights and
responsibilities of participants and gives parties the confidence to interact.
It ensures that contracts are fulfilled, that consumers have rights of redress,
that intellectual property is safeguarded, that workers have minimum rights and
that managers have the incentives to behave with probity. Weaknesses in the
framework undermine confidence and make it more costly for firms to generate
· Competition – an open economy with strong domestic and
foreign competition in UK markets helps spread best practice
and improves efficiency. It also encourages the development
of new products and processes.
· The labour market – modern, fast changing economies need
flexible efficient labour markets in order to respond to changing
circumstances and to make the best of new opportunities.
They also need to offer appropriate worker protection.
· Institutional and political environment – business
confidence and the willingness to invest is affected by the
institutional and legal framework, and the efficiency of the
regulatory system. The latter is also particularly important for
Last updated on 20 November 2003