Labour policy will favour 'good' business

A future Labour government would reward "good" companies which seek long-term growth while imposing regulations on "bad" businesses which merely want to make a quick buck.

An overhaul of Labour's industry policy includes plans for a more "activist" approach in which government contracts could be steered towards innovative companies which provide "social" as well as "economic" value – for example, by treating their workers well and recognising trade unions.

John Denham, the shadow Business Secretary, will argue tomorrow that the lasting success of the UK economy will depend on the "good company" which adds value to the economy and society rather than focuses solely on the bottom line. Labour officials deny the new strategy would mark a return to a 1970s-style approach in which the state "picks winners".

In a speech to the Social Market Foundation think tank, Mr Denham will say: "There are increasingly insistent voices in British boardrooms and beyond who argue that a different model is better both for business, and the wider society."