# = pounds sterling
HM Treasury News Release
202/98 1 December 1998
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FIRST UK PROGRESS REPORT ON PRODUCT,
SERVICES AND CAPITAL MARKETS
UK progress in key areas of reform for product, services and
capital markets and their potential to help raise investment,
productivity and economic growth are set out in a report from
Chancellor of the Exchequer Gordon Brown, published today.
Welcoming the Progress Report on Product, Services and Capital
Markets, Mr Brown said:
"This report emphasises the importance of microeconomic
policies to improve the working of markets, both in the UK
and EU. It is only through a combination of such reforms,
which enhance economic performance, together with
macroeconomic policies which provide a stable platform for
growth, that we shall achieve higher growth and employment.
"Together with the national employment plans published
earlier this year, this report and those of other EU member
states will contribute to the European debate on policies
to raise growth and employment, by helping to exchange best
practice and look for ways to learn from each other."
The Government has already put in place a number of the key
planks of a strategy to improve productivity and economic
performance. The Progress Report summarises action taken towards
meeting three key objectives:
ensuring that competitive pressures in the economy are
strengthened to encourage and reward innovative business,
and to ensure consumers enjoy the benefits of productivity
gains through fair prices and improved quality and choice;
taking a better regulatory approach to markets, which
promotes economic growth while protecting the individual
and the public interest;
encouraging enterprise and innovation to ensure that ideas
and opportunities are exploited to the benefit of the UK
economy.
It also highlights some specific examples of UK policies for
reform in progress. Whilst the focus is on the UK, these
examples should also contribute to peer review and exchange of
good practice with our EU partners. It considers:
The UK Private Finance Initiative - good practice in public
procurement policy.
International price differentials - the persistence of
which are a good gauge of lack of competitive pressure.
The UK car industry - where productivity needs to be
raised.
Electronic-commerce - a new global market place, with
massive potential.
State aid - where the UK remains among the lowest providers
of aid to industry.
UK utilities - where competition is increasing, and
regulation is being improved.
Financial Services - where the regulatory system is being
enhanced to enable it to keep pace with the markets.
UK R&D - where a review is examining options to encourage
investment.
Venture capital - where the EU still lags behind the US.
Publication of the first UK Progress Report on Product, Services
and Capital Markets meets the request of the Cardiff European
Council for each Member State and the Commission to produce short
year-end reports in these areas. The report, prepared by the
Treasury in close consultation with the DTI, will contribute to
the European debate on the policies which can raise growth and
employment, by helping to exchange good practice and look for
ways to learn from each other.
NOTES FOR EDITORS
1. The Cardiff European Council agreed on 15 - 16 June 1998
that 'economic reform (is) essential if the Union is to
face successfully the challenges of globalisation,
competitiveness, and promoting employment and inclusion'.
The Council agreed to 'establish a light procedure under
which Member States and the Commission will produce short
year-end reports within their areas of competence on
product and capital markets'.
2 The Commission suggested an unofficial deadline of 1
December 1998 for the first set of Member States' reports,
which submission of the UK progress report to the European
Commission's Economic Policy Committee (EPC) meets. The
majority of Member States' reports are expected before the
Vienna European Council on 11 December.
3. The next step will be a process of peer review between
Member States, sharing information, exchanging good
practice and looking for ways to learn from each other.
The EPC is currently working on a proposal to assess the
progress reports.
4. Together with other national reports, such as National
Employment Plans and Convergence Programmes, the Progress
Reports will help to inform the debate on the policies the
UK and the EU need to secure stability, and raise growth
and employment.
5. Media copies of the UK Report are available from the
Treasury Press Office on 0171 270 5188.
6. If you have access to the Internet, you can find this press
release and material on other Treasury issues at
http://www.hm-treasury.gov.uk.