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Monday, November 1, 1999 Published at 07:16 GMT

Business: The Economy

Brown rallies British business

Gordon Brown: Businesses must innovate or be left behind

Chancellor Gordon Brown is calling for a new era of entrepreneurship - building on the reforms of Margaret Thatcher's government in the 1980s.

The creation of an enterprise culture in the UK was an often stated goal of Conservative governments between 1979 and 1997.

The BBC's Guto Harri reports: "Relations at the top are clearly cordial"
But Mr Brown, addressing the Confederation of British Industry's annual conference in Birmingham, will say that the Tories did not go far enough.

His priorities for the rest of the current parliament are to create full employment and to ensure that there is "enterprise open to all".

While acknowledging Baroness Thatcher's achievement in creating the "enterprise society", he will stress the need to go further, opening up entrepreneurship "to the many, not just the few".

"I want Britain to be, in every area, a creative, innovative and enterprising economy," he will say.

"The new economy will need more competition, more entrepreneurship, more flexibility and more long-term investment.

"Businesses, indeed countries, which fail to adapt, reform and lead the way will simply be left behind.

"We will all, together, have to raise our productivity, open up competition and improve our skills."

In that vein, Mr Brown will announce a scheme to give tax relief on share options for executives from small and medium-sized companies with assets up to about £15m.

The plan is intended to encourage entrepreneurship and is expected to cost the Inland Revenue up to £40m a year.

Pre-Budget report

There will also be references in Mr Brown's speech to some of the themes of next week's pre-Budget report, including building up UK workforce skills levels.

The BBC's Sarah Dickens: "Influencing the powers that be is important as ever"
The CBI has already joined the British Chambers of Commerce in urging the chancellor not to loosen the public purse strings, warning that any moves to cut taxes or increase spending could exacerbate the divide between the struggling manufacturing and booming services sectors.

CBI director general Adair Turner said such a move would simply stoke consumer demand, leading to further interest rate increases which would hit exporters who were already struggling due to the high value of the pound.

Sir Clive Thompson, president of the CBI, talking to the BBC's Today programme
He said that tax cuts were not as high a priority as improving the UK's education standards and transport infrastructure.

He also urged the chancellor to consider targeting taxes better, including switching from tax on fuel to road usage charging.

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