Labour sets out 'business plan for Britain plc': Cook outlines programme to encourage investment and discourage short-termism in industry
Friday 03 June 1994
Robin Cook, the party's trade and industry spokesman, said the document, Winning for Britain, set out a 'business plan for Britain plc', as he provided Labour's detailed riposte to the White Paper on competitiveness produced by Michael Heseltine, President of the Board of Trade.
To produce a fully national fibre optic network Labour proposes to remove the bar which at present runs until 2001 on the supply of television and entertainment services by British Telecom and Mercury. In return the telecommunications giants would have to undertake to provide a universal service for subscribers.
Without that, Mr Cook said, the risk is that the benefits of the new communications highways now being installed chiefly by foreign- owned firms will go chiefly to the high traffic and prosperous areas, widening the gap for less developed regions.
Existing rules about cross- media ownership were being made outdated by the new technologies, and Labour is considering basing restrictions on market share, Mr Cook said, although he would not indicate what percentage might be acceptable.
Outlining a 17,000-word programme to encourage industrial investment and discourage short-termism in British industry, Mr Cook said that since 1979 investment in industry has halved from 4 per cent of gross domestic product to barely 2 per cent. Companies have paid higher dividends to keep shareholders and financial institutions happy, investing at half the rate of companies in Germany and Japan. 'If companies don't maintain high dividends and share prices they fall prey to take-overs.'
Labour's answers include shifting the onus of proof for hostile bids so that purchasers would be required to demonstrate that the bid was in the public interest; examining changes in corporate taxation to encourage long-term investment; and possibly altering capital gains tax to provide incentives for people to retain shares for longer periods. Such measures would help provide the stability companies need to invest, Mr Cook said. A business development bank for small businesses would specialise in long-term investment to ease the transition from small to medium-sized firms, while each region would get a development agency.
The document also buries some Labour shibboleths, declaring the debate about whether manufacturing or services are more virtuous to be 'pointless and sterile'. Technology made the dividing line 'increasingly hard to define', and each sector needs the other, the document says, despatching Labour's traditional hostility to the service sector.
The more co-operative approach which the document advocates between financiers and industrialists is needed because 'competitiveness is as much the produce of co- operation as competition', Mr Cook argued and added that Britain could not achieve competitiveness by driving down wages.
Mr Heseltine attacked the proposal to end the bar on BT providing entertainment services as 'opposition politics at its worst'. He said clear guarantees had been given to BT's competitors in order to foster competition and it would be quite wrong for those to be breached.
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