Hewitt woos business with investment white paper

Patricia Hewitt, Secretary of State for Trade and Industry, has held a series of high level meetings with British business leaders here in Davos in preparation for a white paper to be published later this year on trade and investment.

The paper, which is unlikely to make any recommendations for legislative change, has been prompted by the growing anti-globalisation backlash, which has been further fuelled in Britain in recent months by the threat to jobs posed by outsourcing.

Ms Hewitt said that there was obviously a short-term cost in outsourcing but that it would ultimately make Britain more productive. "We have to redouble our efforts to keep Britain competitive, avoid any retreat into protectionism, and encourage our entrepreneurs", she said in an interview.

She acknowledged that there was a short-term cost in outsourcing, but said the case needed to be made more forcibly and that the global economy could be good for Britain and help developing countries lift themselves out of poverty.

She was determined that Britain would play a lead role in shaping the rules of the global economy. Ms Hewitt is hoping for the full participation of the business community in formulating the paper.

Speaking on the fringes of the World Economic Forum annual meeting, Digby Jones, the director general of the CBI, said that all three main political parties were actively seeking the business vote for the next election. Rising levels of tax and red tape remained some of the biggest constraints on competitiveness.

Britain's poor level of productivity growth has become a growing source of concern to the Government. Yet business leaders think the problem is more down to the growing size of the public sector in combination with high levels of regulation.