Cometh the ministry, cometh the man

Source: Stock Market Digital

Date :24/07/2007 11:35:15

Gordon Brown’s government of all the talents looks good for business, but will it be allowed to do its job?

By John O’Hanlon

Rebranding the DTI will be something most business leaders will welcome. Incorporating regulation reform in the title of the new ministry is a clear signal, a promise indeed, but how many businesses ever looked to the DTI for support or guidance (or indeed the FCO when exporting)? Its ways were labyrinthine and it judgements unexplained and inexplicable. It was home to some promising initiatives like the Foresight innovation programme, but seemed good at strangling these either by their complexity or its inability to communicate them effectively.

It has also been the home to Sir David King’s Office of Science and Innovation, however Sir David has been principally associated with an uncompromising message on climate change, a message that sat uneasily with the isolationist stance taken by George Bush. This could change under Brown if as seems likely the new PM differentiates himself from his predecessor by abandoning Blair’s ‘poodle’ policy toward the USA. And if he starts to bring British troops back from Iraq sooner than planned he will be viewed with even deeper suspicion by the Americans. That could be bad for our commercial relationship with the United States, and we should perhaps worry about a worst-case scenario in which the UK ceases to support the US in the Middle East generally and attracts trade sanctions.

Unknown quality

However symbolic at this stage, the ponderous new title Department for Business, Enterprise and Regulatory Reform (how do you pronounce DBERR?) sends out the right signals. Now all the attention will be on whether John Hutton can make sufficient progress in delivering the product named on the tin. His track record gives few clues. An MP only since 1994, he became PPS to Margaret Beckett, in whose not inconsiderable shadow he stayed until in 199 he came into the government as a Minister of /State in the Department of Health. He only entered the cabinet in 2005, as Chancellor of the Duchy of Lancaster, being promoted to head the Department of Work and Pensions the same year in the shake up following David Blunkett’s resignation.

Hutton has limited experience in government and none at all in business. He is a lawyer by training, though he has never practised, and prior to starting his parliamentary career was a Senior Law lecturer at the University of Northumbria. DBERR, it is promised, ‘will help create the conditions for business success and promote productivity and enterprise, across Government and within the EU’. Will John Hutton be able to change the culture of this unwieldy department to march these words, or will he struggle to handle the powerful lobbying forces and sometimes conflicting demands of the large corporations that control billions, the SMEs that form the backbone of British industry yet feel they are under-represented, and the knowledge-based and entrepreneurial growth business upon which the future prosperity of the country is so clearly dependent?

One concern that seems to be emerging is that Brown has carefully built a cabinet that keeps his friends like the new Justice Secretary and Lord Chancellor Jack Straw and Alistair Darling, who succeeds Brown as Chancellor of the Exchequer, very close indeed, placing younger, talented, but relatively inexperienced people in key ministries. The strategy may be to ensure that he never has to coexist with a rival in the way that Blair had to for a whole decade. Cynics think that Darling will have nothing of the autonomy that Brown enjoyed.

John Hutton used to be seen as a Blairite, and was even talked about as a potential leader at one time, but he will now need all the help he can get. With one exception the team appointed to help him does not have strong business credentials. Malcolm Wicks is another former university lecturer who was appointed Minister of State for Science and Innovation in November 2006, having previously been Minister of State for Energy at the DTI since May 2005.: Stephen Timms has been an MP since 1994, before which he worked in telecommunications and Pat McFadden has only been in parliament since 2005, when he was selected to fight the constituency of Wolverhampton South East following the retirement of Dennis Turner. Since May 2006 he has been Parliamentary Under-Secretary of State to the Cabinet Office as Minister for Social Exclusion.

Gesture appointments

There are two further ministers in the department, both shared with other departments, but both with ‘serious’ business experience. Lord Drayson is a wealthy biotechnology entrepreneur, and a generous contributor to the Labour party. This last detail has inevitably led to questions about his disinterest, but he is perhaps ideally suited to advise and guide the department toward a regulatory climate that smoothes the path from research, to product, to market. He retains his defence procurement role in the MoD.

The most important and daring appointment is that of Sir Digby Jones as minister for trade development, a post that has one foot in the Foreign Office. Jones will sit on the Labour benches in the Lords. His successor as the Director-General of the CBI Richard Lambert has already wondered aloud whether the different ministries will get along any better than they did before. Digby Jones may be just the man to refocus the attention of both departments on trade relations with the wider world, and in particular India and China which between them will dominate world trade by the middle of this century. He has a massive job to do, though, and will need support from the top down if he is not to be sidelined.