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The Observer from London, Greater London, England • 33

Publication:
The Observeri
Location:
London, Greater London, England
Issue Date:
Page:
33
Extracted Article Text (OCR)

BUSINESS 5 THE OBSERVER SUNDAY 10 OCM'OBKR mil! Safe LTD if Mb ass MS He says: 'We must have an independent check on its advice you cannot rely totally on the Treasury. It is very much politically motivated for the political and economic aims it believes in. 'I have no doubt in my mind that if labour is ever to break out and answer the real problems of Britain, then it had better start handling the Treasury. The Treasury has totally controlled post-war economic development in Britain. It plays a much more fundamental role here than equivalent organisations do in most European The Treasury, he asserts, too often judges economic performance along the same lines as the banks, adding: 'I do not think that our banks have done too well for our businesses, One central theme of Prcscott's philosophy is the creation of a new body, outside the Treasury, to drive the economy.

This, he suggests, will take the shape of cither a super-charged Department of Trade and Industry or, more likely a remodelled version of the 1960s creation, the Department of Economic Affairs. He believes the DTI or DEA should be used to tilt the balance in favour of job creation. 'What the country has to do is say to people that if we have competing investment, with one offering more labour than the other, then we should ask people to invest in the more labour he says. 'We should not have to worry about increasing our labour force. If we had a project that was not labour intensive, with an 8 per cent return, but were instead offered a similar scheme with a 5 per cent return, there is an argument for saying that we should accept 5 per cent because the Government will have to pay for people who are on the dole.

'To me we either have tax and spend or put people to work. There are many, many things we can do that are profitable and meet the need, but perhaps do not meet the Treasury's rate of CP If planning is in, then strategy is in and Government has got a role. Manufacturing has for too long been a low by Jane Bown ment which boosts assets. As an example, he cites the bus industry which was deregulated outside London in the 1980s. The result has been disastrous, with the number of travelling passengers dropping sharply, services cut, fares jacked up and the vehicle-making industry virtually wiped out.

model for invigorating infrastructure spending. These would create work in construction, would encourage more people to travel-and thus create new jobs. But the debate, he insists, is currently centred on the difference between taxation and spending. Prescott says it is time to concentrate more on invest Prescott's drive to enter the wider economic debate and he is particularly anxious to exploit the lessons of transport for wider use elsewhere in the economy. Prescott believes that Labour proposals for transport, particularly the linking of private-sector finance with public-sector rail projects, would be the ideal role den of risk, but where is the risk in running agreed bus Prescott believes that Smith's pledge on full employment represents the most radical statement any leader can make.

But, like so many others, he believes that the power base of the Treasury in Britain's economic policy-making has to be diluted. 'It is obvious that, if you deregulate the bus industry there are major implications for the manufacturing he says. 'What we should do is franchise routes, agree a network and the level of fares and then guarantee a sufficient level of capital expenditure on new buses. The Government would carry the bur John Prescott, Labour's gritty star, is spreading his wings to champion industry. Michael Smith reports JOHN PRESCOTT the man credited with clinching the reform of the Labour Party's links with the trade union movement, is embarking on an unlikely new career.

Best known as the rumbustious opposition spokesman on transport, he is spreading his wings to champion the cause of industry in the crucial role of job provider. 'I always saw transport as an employment says Prescott. 'Now, after John Smith's pledge for full employment, it has to fit into an industrial policy it has to fit into training, it has to fit into production, into finance, creating Having effectively set" the agenda for the debate over transport policy in recent years, he is now demanding that the lessons learned there should be used to revive the flagging industrial sector. His comments, given in an exlusive interview with The Observer, will undoubtedly strengthen the belief that he has wider political ambitions and that he has outgrown the transport portfolio. That remains to be seen, but it is clear he is anxious to make his considerable presence felt in the growing debate over job creation.

trial strategy. Manufacturing is central to our Prcscott's timing in reviving the debate about the importance of manufacturing is ideal, with the quest for a more robust industrial base now back firmly on the agenda after 14 years in the political wilderness. Ministers such as Michael Heseltine at the Department of Trade and Industry and David Hunt at the Department of Employment, have emerged from the monetarist shadows of the 1 980s to advocate a closer Government dialogue with industry; and business itself senses a new beginning which places manufacturing at the heart of economic policy. However, industrialists have been expressing impatience at the lack of real progress at the DTI which under Heseltine's leadership had been expected to develop a more interventionist stance. While Heseltine's unfortunate illness may have interrupted progress, there is little doubt that some business leaders arc surprised that so little has been achieved.

Later this week the Confederation of British Industry is expected to reflect this by demanding a restatement of the Government's industrial policy and pressing for a more positive stance that would encourage investment. In that context, CBI director-general Howard Davies last week described the annual row between Ministers over levels of public expenditure as a 'ridiculous horse trade' which often resulted in Governments investing in failure rather than success. Prescott's philosophy likely to appeal to those disenchanted with 14 years of no industrial policy is a straightforward Keynesian mix of planning, incentives and investment. 'If planning is in, then strategy is in and Government has definitely got a he says. 'Manufacturing has for too long been seen as a low He would like to impose limitations on the influence of free markets, give greater priority to education and training and create a fiscal framework which encour Call How lines Open: Mon-Fri 9anv8pm, Sat 9am-5pm 0282 777 1 1 1 Corporate Sales 0282 77 00 99 3(tM) (QO 93 Orders must be placed before this date to qualify for any free bundles and and Interest Free Offers.

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Pages Available:
296,826
Years Available:
1791-2003