Lawyers for Mr Gates were expected to continue the talks in Washington

Lawyers for Mr Gates were expected to continue the talks in Washington this morning.At the extreme, the suits could demand the actual break-up of Microsoft into disparate companies. The extraordinary spectacle of Microsoft scrambling to settle suggested the conditions being presented to the company were far from minor. Mr Brown told them that to achieve the higher productivity on which growth, employment and living standards depended would require “a new national economic purpose”.Margaret Beckett, President of the Board of Trade, who co-hosted the seminar, said that the McKinsey study echoed the findings of her own competitiveness unit and pledged that the Government would have a role to play in encouraging investment and training and improving competition policy.A series of 10 further seminars will take place around the country this year, covering sectors such as manufacturing, food retailing and software, while the Government intends to publish a competitiveness White Paper in the autumn.According to McKinsey, the labour productivity gap with France and Germany is partly explained by the fact that these two countries have fewer people in employment working fewer hours.Outlook, page 25. In the service sector, the productivity of the UK’s hotel industry is half that of the US while in telecoms the gap is 45 per cent.The seminar was attended by 20 leading UK businessmen, including Lord Simpson, managing director of GEC, John Browne, chief executive of BP, Sir Ian Prosser, chairman of Bass, and Terry Leahy, chief executive of Tesco.

THE CHANCELLOR of the Exchequer yesterday hinted that his next Budget could include fresh incentives to encourage more investment by industry after a damning report showing that British productivity lags that of the US by 40 per cent. Launching an initiative to tackle the productivity gap at a Downing Street seminar, Gordon Brown indicated that incentives for capital investment, skills development programmes and increased support for entrepreneurs were all on the agenda.
Treasury and Department of Trade and Industry officials later said that a range of measures to build on the corporate tax reforms set out in the last Budget were under examination.The initiative follows a report to the Government from the US management consultants McKinsey showing that as well as lagging far behind American productivity standards, Britain was also at least 20 per cent behind Germany.The report identifies Britain’s inferior level of capital investment as one of the causes of its poor record on labour productivity against competitor nations, including even the French, where industry is saddled with high social costs of employment.Mr Brown and his officials strongly contested suggestions that introducing a national minimum wage would hamper the drive to improve competitiveness, pointing out that the US had had a minimum wage for many years.But one of the authors of the report, Bill Lewis of the McKinsey Global Institute, pointed out that the US minimum wage was set at about half the level of those in Germany and France and affected few employers because wages had risen so strongly.The McKinsey analysis shows that in some sectors, such as the car industry, the UK’s labour productivity is half that of the Japanese and 20 per cent below the US. The inquiry will, of course, continue hearing evidence meanwhile and still intends to call the five.”Earlier, the inquiry was told that the detective who led the murder investigation wrote a character reference for a former colleague who had been seen three times with Clifford Norris, a notorious criminal and father of David Norris.Detective Sergeant David Coles faced an internal police investigation 10 years ago over his contact with Mr Norris but he was not disciplined.Edmund Lawson QC, counsel to the inquiry, said the investigation led to DS Coles being disciplined for a separate matter, falsely claiming to have been at the Old Bailey when he had been on private business.Former detective superintendent Ian Crampton, now retired, who was in charge of the Lawrence case for the first three days, had been DS Coles’ superior officer at Bexleyheath station, in Kent, in the mid Eighties and supplied a reference for the disciplinary hearing in 1989.But Mr Crampton, who has told the inquiry that the name Norris did not ring bells with him in April 1993 when he investigated Stephen’s murder, said yesterday that he had not been aware of the background to the hearing.The inquiry has heard allegations that the police investigation was obstructed by a link between Norris and an unidentified officer.Mr Lawson said that DS Coles had been reported to the Metropolitan Police’s Complaints Investigation Bureau in June 1988 by officers from Customs and Excise, who were investigating Norris at the time and spotted him in the company of the detective.Mr Lawson said that Customs had told the inquiry team there was no basis for suggesting any connection between Norris and any officers on the Lawrence murder investigation.The inquiry resumes today.. “I, on behalf of Gary Dobson, am not prepared to see this turn into a trial,” he said.The five youths were all charged with murdering Stephen, but the Crown Prosecution Service dropped the charges.

A private prosecution by the Lawrence family led to Neil Acourt, Gary Dobson and Luke Knight being acquitted at the Old Bailey in 1996.Sir William said last night: “These submissions will no doubt be opposed. The conduct of the Foreign Office is curiouser and curiouser,” he said.. FIVE youths named as prime suspects in the race murder of Stephen Lawrence announced yesterday that they planned legal moves to block demands that they attend a public inquiry into the black teenager’s death in Eltham, south London, in April 1993. Sir William Macpherson, the chairman, has made it clear that a refusal to attend or answer questions would be treated as contempt, and initial indications were that they would turn up.
But after a hearing in chambers before Sir William last night, lawyers for the youths – Neil Acourt, 22, Jamie Acourt, 21, Gary Dobson, 22, Luke Knight, 20, and David Norris, 21 – said they planned to apply for judicial review on the basis that the decision either fell outside the inquiry’s terms of reference, or the terms of reference themselves fell outside the scope of the relevant legislation.Michael Holmes, solicitor for Mr Dobson, said that the application would relate to whether Sir William had the right to call the five before him.

Summonses were sent last week to the five, ordering them to appear before the inquiry during the week of 8 June. These conversations were one-way – he rang a number of times. It is clear to me that the department decided not to put the phone down on Spicer because they wanted to hear what he had to say about the situation in Sierra Leone,” he said.Menzies Campbell, the Liberal Democrats’ foreign affairs spokesman, said an independent inquiry should be launched as soon as possible.”These events are now taking on an Alice in Wonderland dimension. Sir John described the allegations against his staff as “housekeeping matters”.”It would be quite wrong to create a situation where everybody who wishes to cough in the Foreign Office has to push a paper to ministers,” he said.Sir John added that officials had only one meeting with Tim Spicer, Sandline’s chief executive, though they had received a number of telephone calls from him.”He might have some intelligence that would be useful to us.

However, he did not think it important enough to tell the Foreign Secretary, Robin Cook. it mentions reports about a possible deal by President Kabbah for Sandline’s services. Sir John Kerr, the Permanent Under-Secretary to the department, had said he thought the Foreign Office minister Tony Lloyd was briefed that Customs and Excise were investigating Sandline before a Commons debate in March.
Later, though, both he and Mr Lloyd put out statements saying this was not true. Mr Lloyd has maintained that he did not know about the investigation until much later.Mr Lloyd told the Commons in March that reports of meetings between a firm of mercenaries and the British High Commissioner to Sierra Leone, Peter Penfold, were “ill-informed and scurrilous.” It has since been confirmed that Mr Penfold did indeed meet Sandline International.Last night, Sir John appeared to be in trouble for the second time in three days. He was rebuked by the Public Accounts Committee on Tuesday for suggesting that officials engaged in plea-bargaining with an accountant who stole more than pounds 100,000 from the British embassy in Jordan.Meanwhile, the furore over allegations that officials collaborated with the mercenaries in breaking an arms embargo while planning to reinstate President Ahmad Tejan Kabbah to power in Sierra Leone showed no sign of abating.When asked if Mr Lloyd’s briefing pack contained information about the inquiry, he told the committee: “I think it did.” But later he wrote to the chairman, Donald Anderson, to say: “I have checked my memory of the briefing pack … He argues that as the only religion which specifically encourages sex for pleasure, Jews need not be squeamish about sex.It had been reported that Dr Sacks was going to ban the book.Some conservative leaders of the Orthodox community claim the Rabbi is wrong and that he trivialises and sensationalises sex.