Mandelson demands more flexibility in EU state aid rules

Business Secretary Lord Mandelson has suggested that EU should bring more flexibility in state aid rules to allow government support for high-tech companies.

Lord Mandelson said a little flexibility in EU state aid rule would permit smart public sector intervention. He added that a smart, sensible government could do a lot to assist the private sector. Speaking on the issue, he said, "We want to see revised risk capital guidelines for public financing of high-tech and innovative companies."

Lord Mandelson, who earlier criticized French industrial policy several times, said the UK could learn a lesson from France in the way it rescued French high-tech firms, which helped them to prosper in new markets.

To add weight to his views, he mentioned French support for the energy and transport firm Alstom and the nuclear generator Areva.

In addition, the business secretary urged companies making takeover bids to divulge their long-term workforce plans.

He urged investors to focus on long-term gains rather than short-term gains. His comments emerged at a time when chocolate-maker Cadbury is fighting a hostile takeover bid from the US-based Kraft.