A 7,000-word discussion document on a Labour policy for manufacturing, drawn up by Robin Cook, shadow trade and industry spokesman, proposes a new industrial investment bond for sale to the public. It also suggests legal changes to prevent banks forcing the closure of firms that could be revived as a going concern.
The document, which will be launched on Tuesday by Mr Cook and John Smith, the Labour leader, suggests what could prove radical changes in the law on pension funds to make them a means of broadening Britain's manufacturing base. It questions whether some building society funds could be diverted to industrial investment instead of property, and proposes a new industrial investment unit at the Department of Trade and Industry.
It says that Labour would hold talks with pension funds to ensure that they have a 'balanced portfolio' with more direct industrial investment and less in shares and overseas property. Pension funds have a primary duty to their members and the security of pensions must be guaranteed, the document says, but it argues that they also have a responsibility to ensure that their funds are invested in a way 'which strengthens Britain's economic future'.
The document, Making Britain's Future, is intended as the basis for a year-long process of consultation with industry and business schools. It asks whether new incentives that Labour will promise for investment in research and development should be in the form of tax allowances or in direct grants, which would be more helpful to smaller business not making enough profits to take advantage of allowances.
It says the talks will also cover what new institutions might be needed to promote more direct investment in industry and and bridge the 'investment gaps' left by the commercial banks.
One of the most controversial proposals is for a system of worker participation in larger companies similar to the two-tier boards legally required in Germany. The plan revives this political issue for the first time since Lord Bullock's report in the Seventies.