The CBI at Harrogate: Performance / Heseltine calls for change in industrial culture: Michael Harrison and Mary Fagan round up developments at yesterday's conference

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MICHAEL HESELTINE, the President of the Board of Trade, yesterday called for a culture change across the face of British industry in an effort to close the gap with international business.

In his first key public speech since suffering a heart attack, Mr Heseltine said that the UK needed more world-class companies. He cited a recent survey which found that only 2 per cent of UK firms were world-class, with a further 42 per cent contenders. 'That leaves over 50 per cent of companies with a hell of a task,' he said.

Increasing competitiveness required an entire culture change, not only in business but in the nation as a whole, with education and innovation playing key roles, he said.

Mr Heseltine said that while Britain had examples of excellence, he was concerned with the averages and with those at the bottom of the performance scale.

He promised to fight industry's corner when dealing with other government departments. But he warned: 'The DTI will not fight your battles in public.' Referring to industry's demands for a Budget for investment, he said there would be private discussions but no headlines and no leaks.

Mr Heseltine said that the DTI's partnership with industry would become increasingly penetrating and helpful. There was an agenda that was impossible to put in headlines, he said. 'We are changing the culture. We are there to help business.'

Earlier Tony Hale, the chairman of the CBI's National Manufacturing Council, had called for a culture for investment and a new realism on the need to spend for the future. 'We continue to consume today at the expense of investment for tomorrow - government over-spending, industry under-investment, the last consumer binge fuelled by over-eager bankers,' he said.

He also urged banks to make it easier for businesses to obtain loans, based not on the price of property but on the quality of business plans.

Mr Heseltine warned his audience not to underestimate the importance of Britain's European partners. 'We will serve ourselves not at all if the language with which we describe our Continental partners, the imagery in which we paint them and the insularity with which we attempt to rewrite the history of the past 40 years has the effect of alienating ourselves and our self-interest from the very people upon whom we are most dependent,' he said.

(Photograph omitted)