Mandelson gives pounds 150m boost to entrepreneurs

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PETER MANDELSON yesterday unveiled his long-awaited blueprint for revitalising British business, announcing 75 initiatives to help build a "knowledge-driven economy" including a pounds 150m enterprise fund for start-up companies.

But the Secretary of State for Trade and Industry's White Paper on competitiveness was immediately attacked for containing nothing new and discriminating against traditional industries such as engineering.

In addition to the new Enterprise Fund, which will support the financing of small businesses with growth potential, there will also be an increase in the DTI's innovation budget, a refocusing of regional aid towards hi-tech schemes, measures to promote electronic commerce and greater commercial exploitation of scientific research.

Mr Mandelson also floated plans to review existing merger regulation, make it easier for failed entrepreneurs to start up in business again and reform the planning system to encourage the development of "clusters" of hi-tech industries. To begin with, the Science Minister, Lord Sainsbury, will lead a team to promote industrial clusters in biotechnology.

Unveiling his White Paper in the Commons, Mr Mandelson said it was a "wake up call to the nation". He said: "Our industrial performance still lags well behind the United States and our European partners, despite all the privatisations and trade union reforms of our predecessors' 18 years."

The Blair Government would steer a new path between the planning of the 1960s and 1970s and the laissez-faire of the 1980s, which had both failed, said Mr Mandelson. It would work with the grain of markets; use its regulatory powers to promote competition; encourage businesses to collaborate more efficientlyand invest in skills and technological awareness.

The Department of Trade and Industry would perform three key roles: invest in Britain's world-class science and knowledge base; do more to convert this into hard commercial success, and "lead a crusade to develop in Britain the spirit of enterprise, so characteristic of the US, so that we seize the new opportunities before us."

However, John Redwood, the Conservative trade spokesman, said the statement contained nothing because the Government's policies on competitiveness had already been announced by Gordon Brown in last month's pre-Budget report. He told Mr Mandelson: "The Emperor has no clothes. The Chancellor calls the shots. He's stolen the Trade Secretary's garments."

David Chidgey, industry spokesman for the Liberal Democrats, said the White Paper was "high on style and pretty fine on ideals, but the key question is going to be, will it fall short on action?"

The Confederation of British Industry gave the White Paper a broad welcome, saying it would help provide the right climate for business success. But the Engineering Employers Federation, while supporting many of the initiatives, urged Mr Mandelson not to abandon existing engineering firms by focusing support on just the hi-tech growth sector.

Some MPs were worried that Mr Mandelson's plans to make it easier for bankrupt businessmen to start new firms would be a "cheat's charter".

Outlook, page 19

The main measures

Enterprise Fund worth pounds 150m to support start-up businesses.

Innovation budget increased by 20 per cent to pounds 220m.

New Faraday Partnerships to commercialise scientific research.

Ten new industry forums to promote best practice.

Reform of regional aid to target hi-tech projects.

Lord Sainsbury to promote biotechnology clusters.

A million small businesses wired to Internet by 2002.

Reviews of mergers regulation and skills programmes.

Reform of insolvency laws to help entrepreneurs who have gone bankrupt.