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 0207 270 5188.

Press Notices 1998 July to December Index