New Labour offers business a new deal for the future. We will leave intact the main changes of the 1980s in industrial relations and enterprise. We see healthy profits as an essential motor of a dynamic market economy, and believe they depend on quality products, innovative entrepreneurs and skilled employees. We will build a new partnership with business to improve the competitiveness of British industry for the 21st century, leading to faster growth.

Many of the fundamentals of the British economy are still weak. Low pay and low skills go together: insecurity is the consequence of economic instability; the absence of quality jobs is a product of the weakness of our industrial base; we suffer from both high unemployment and skills shortages. There is no future for Britain as a low wage economy: we cannot compete on wages with countries paying a tenth or a hundredth of British wages.

We need to win on higher quality, skill, innovation and reliability. With Labour, British and inward investors will find this country an attractive and profitable place to do business.

New Labour believes in a flexible labour market that serves employers and employees alike. But flexibility alone is not enough. We need 'flexibility plus':

- plus higher skills and higher standards in our schools and colleges

- plus policies to ensure economic stability

- plus partnership with business to raise investment in infrastructure, science and research and to back small firms

- plus new leadership from Britain to reform Europe, in place of the current policy of drift and disengagement from our largest market

- plus guaranteeing Britain's membership of the single market -indeed opening up further markets inside and outside the EU -helping make Britain an attractive place to do business

- plus minimum standards of fair treatment, including a national minimum wage

- plus an imaginative welfare-to-work programme to put the long-term unemployed back to work and to cut social security costs.

A reformed and tougher competition law

Competitiveness abroad must begin with competition at home. Effective competition can bring value and quality to consumers. As an early priority we will reform Britain's competition law. We will adopt a tough 'prohibitive' approach to deter anti-competitive practices and abuses of market power.

In the utility industries we will promote competition wherever possible. Where competition is not an effective discipline, for example in the water industry which has a poor environmental record and has in most cases been a tax-free zone, we will pursue tough, efficient regulation in the interests of customers, and, in the case of water, in the interests of the environment as well. We recognise the need for open and predictable regulation which is fair both to consumers and to shareholders and at the same time provides incentives for managers to innovate and improve efficiency.

Reinvigorate the Private Finance Initiative

Britain's infrastructure is dangerously run down: parts of our road and rail network are seriously neglected, and all too often our urban environment has been allowed to deteriorate.

Labour pioneered the idea of public/private partnerships. It is Labour local authorities which have done most to create these partnerships at local level.

A Labour government will overcome the problems that have plagued the PFI at a national level. We will set priorities between projects, saving time and expense; we will seek a realistic allocation of risk between the partners to a project; and we will ensure that best practice is spread throughout government. We will aim to simplify and speed up the planning process for major infrastructure projects of vital national interest.

We will ensure that self-financing commercial organisations within the public sector - the Post Office is a prime example - are given greater commercial freedom to make the most of new opportunities.

Backing small business

The number of small employers has declined by half a million since 1990. Support for small businesses will have a major role in our plans for economic growth. We will cut unnecessary red tape; provide for statutory interest on late payment of debts; improve support for high-tech start-ups; improve the quality and relevance of advice and training through a reformed Business Links network and the University for Industry; and assist firms to enter overseas markets more effectively.

Local economic growth

Prosperity needs to be built from the bottom up. We will establish one-stop Regional Development Agencies to co-ordinate regional economic development, help small business and encourage inward investment. Many regions are already taking informal steps to this end and they will be supported.

Strengthen our capability in science, technology and design

The UK must be positively committed to the global pursuit of new knowledge, with a strong science base in our universities and centres of excellence leading the world. The Dearing Committee represents a significant opportunity to promote high-quality standards in science teaching and research throughout UK higher education. We support a collaborative approach between researchers and business, spreading the use of new technology and good design, and exploiting our own inventions to boost business in the UK.

Promoting new green technologies and businesses

There is huge potential to develop Britain's environmental technology industries to create jobs, win exports and protect the environment.

Effective environmental management is an increasingly important component of modern business practice. We support a major push to promote energy conservation - particularly by the promotion of home energy efficiency schemes, linked to our environment taskforce for the under-25s. We are committed to an energy policy designed to promote cleaner, more efficient energy use and production, including a new and strong drive to develop renewable energy sources such as solar and wind energy, and combined heat and power. We see no economic case for the building of any new nuclear power stations.

Key elements of the 1980s trade union reforms to stay

There must be minimum standards for the individual at work, including a minimum wage, within a flexible labour market. We need a sensible balance in industrial relations law - rights and duties go together.

The key elements of the trade union legislation of the 1980s will stay - on ballots, picketing and industrial action. People should be free to join or not to join a union. Where they do decide to join, and where a majority of the relevant workforce vote in a ballot for the union to represent them, the union should be recognised. This promotes stable and orderly industrial relations. There will be full consultation on the most effective means of implementing this proposal.

Partnership at work

The best companies recognise their employees as partners in the enterprise. Employees whose conditions are good are more committed to their companies and are more productive. Many unions and employers are embracing partnership in place of conflict. Government should welcome this.

We are keen to encourage a variety of forms of partnership and enterprise, spreading ownership and encouraging more employees to become owners through Employee Share Ownership Plans and co-operatives. We support too the Social Chapter of the EU, but will deploy our influence in Europe to ensure that it develops so as to promote employability and competitiveness, not inflexibility.

A sensibly set national minimum wage

There should be a statutory level beneath which pay should not fall -with the minimum wage decided not on the basis of a rigid formula but according to the economic circumstances of the time and with the advice of an independent low pay commission, whose membership will include representatives of employers, including small business, and employees.

Every modern industrial country has a minimum wage, including the US and Japan. Britain used to have minimum wages through the Wages Councils. Introduced sensibly, the minimum wage will remove the worst excesses of low pay (and be of particular benefit to women), while cutting some of the massive £4 billion benefits bill by which the taxpayer subsidises companies that pay very low wages.