# = pounds sterling

HM Treasury News Release
9/99                                         18 January 1999
-----------------------------------------------------------------
                                
              GOVERNMENT ROADSHOWS REACH HALF-WAY 
              STAGE TO A MORE COMPETITIVE BRITAIN


The Government's unique UK-wide Productivity Challenge Roadshows
reached the half-way stage today as the new Paymaster General
Dawn Primarolo urged British business to contribute to the
national debate and help tackle the productivity gap.

Hosting the fifth joint Treasury/DTI roadshow with Minister for
Trade and Competitiveness in Europe Lord Simon at British
Aerospace in Bristol, the Paymaster outlined the Government
action in place to help Britain become more efficient and
competition, and asked business to contribute to the debate with
solutions of their own:

     "Recent months have seen the Government publish the pre-
     Budget Report, the Competitiveness White Paper and the
     Public Service Agreement White Paper - all aimed at
     improving efficiency and competition across industry. 

     "But the Government doesn't have all the solutions to a
     problem which has seen our productivity drop to a 40 per
     cent gap with the US, and a 20 per cent gap with France and
     Germany. Business has a vital role to play in developing
     new policies that are right for business and for the
     economy.

     "That's why these roadshows are so important, in
     encouraging and stimulating the debate to help Britain
     become more successful. Tackling the productivity gap is a
     national priority, and the feedback we've received so far
     from the roadshows is helping enormously to fuel the
     debate." 


Lord Simon said:

     "Raising this country's productivity is a key national
     challenge. It is vital if we are to compete on a global
     basis. The Competitiveness White Paper and the Pre-Budget
     Report have set out this Government's agenda for
     modernising the economy. 

     "It is for business to lead this process of modernisation,
     responding to the spur of competition and seizing market
     opportunities. Putting the concern of business at the heart
     of Government policy is central to our approach. Today's
     event is a further step in the process of focusing on how
     we can raise this country's game."

The Government has embarked on a series of consultations on
productivity issues, including:

     - Employee Share Ownership Schemes;

     - corporate venturing; how to encourage large companies to
     provide support and investment to smaller businesses;

     - tax incentives for research and development investment
     and how to make them more effective.

In the next few months, the Government will set out ideas for a
possible new tax measure to encourage small and medium sized
enterprises to invest in R&D.





NOTES TO EDITORS

1.   The Productivity Roadshow was held at British Aerospace
     Airbus Ltd, Bristol.  There will be similar regional events
     throughout the UK over the next few months, as part of the
     Government's consultation on the Pre-Budget Report.
     Ministers from a number of Government departments will be
     involved, and they will want to discuss directly with local
     business people and others possible solutions for closing
     the productivity gap.

2.   The Pre-Budget Report was published on 3 November. As well
     as setting out the steps needed to secure high and stable
     levels of employment, it forms the basis for a wide ranging
     consultation on the steps that need to be taken to address
     the UK's long-standing productivity gap.