Heseltine condemns Britain's `laggards'

MARY FAGAN

and PETER RODGERS

Michael Heseltine, the Deputy Prime Minister, launched an attack on the "self-satisfied laggards" of British industry and called on the nation's best performers to help pull the rest into line.

Closing the day's proceedings at the CBI, Mr Heseltine announced plans to write to the chairmen of the country's 1,000 largest companies to enlist their help in spreading best practice throughout UK business.

Mr Heseltine said: "There are as many British companies in the world- class league as there are German companies. Our problem comes lower down the scale where we have four times as many companies which lag badly in key respects. This long tail of underperformers holds down the national average and blurs the excellence of the leaders in their respective fields.'' Adding that "it is the laggards who are most complacent about their performance", Mr Heseltine revealed plans to tackle the problem with a national "benchmarking" scheme to compare the best with the rest.

Mr Heseltine also sought to reassure business that the Government will not act imprudently on taxation or be deflected from its current "disciplines" in any way that could hurt industry. "We will not reach for short-term inflationary palliatives. We will not undermine your competitiveness by imposing social costs on you," he said.

He added: "We see taxes as you see taxes. Whatever they are called - windfall taxes, social taxes, non-penal taxes or even tartan taxes, they are all taxes." He said the Government wanted the most competitive regime that "prudence can accommodate".

Mr Heseltine also promised to continue to fight Britain's corner within the European Union and to fight for regulation and competitiveness throughout the EU.

He warned that each partner with the Union had its own agenda as well as the European agenda, adding: "Anyone who thinks you can win over the French and Germans by rolling over on your backs and waving your paws in the air has much to learn about the rules of international politics."