Industry policy paper due in May: Low productivity triggers government move

THE GOVERNMENT is to set out its policy towards industry in a White Paper on competitiveness likely to appear in May.

The decision to produce the paper follows a damning internal report to ministers showing that in terms of manufacturing productivity Britain is 25 per cent behind France, 35 per cent behind Japan and Germany and 60 per cent behind the United States. The paper, which will cut across government departments other than just the Department of Trade and Industry, has the specific endorsement of the Prime Minister.

Michael Heseltine, President of the Board of Trade, disclosed the intention to publish the paper last night while giving evidence to the Commons Trade and Industry Select Committee. The paper will take the form of the DTI's response to the MPs' report, expected in March.

A DTI spokesman said the paper was unlikely to contain legislative proposals but would set out the direction of policy on industry. Among the areas likely to be covered are education and training, research and development, infrastructure, financing of industry and legislative burdens.

Mr Heseltine described manufacturing industry as a 'critical part' of the economy that would receive a proper share of the Government's attention, but added: 'If you mean providing subsidies or engaging in protectionist techniques I am sceptical. If you are looking for government money frankly that is a fiction.'

He pledged that the DTI would give special attention to the aerospace industry, which has called for an extra pounds 1bn to be spent over the next 10 years on technology acquisition. But he ruled out direct support.

The best way the Government could help was by reducing the burden of unnecessary regulation, providing support in export markets and encouraging firms to measure their performance against the world's best standards, he said.