So what is the DTI for?

So what is the DTI for? - The trade minister should offer practical assistance to business rather than lecture it.

by Patience Wheatcroft, business and City editor of The Times
Last Updated: 31 Aug 2010

The trade minister should offer practical assistance to business rather than lecture it.

Patricia Hewitt means well. When she talks of her mission to deliver 'prosperity for all', as she did at the Labour party conference in September, there can be no doubting the sincerity of her intentions. It would be very nice if everyone could be rich. But the wish is not enough to make things happen.

Hewitt, scarred by her years working for management consultancy, seems to believe that if she puts out enough mission statements and establishes enough working parties, all will be well and British industry will be transformed.

The secretary of state for trade and industry has turned her department into a talking shop and paper factory with no obvious benefit to those struggling to run real stores or factories. A week before she told conference delegates the plans for her department, Vincent Cable, her Liberal Democrat opposite number, was calling for the abolition of the DTI.

His argument, repeated by many, is that the Government makes life increasingly difficult for business, through over-zealous regulation and over-complicated tax structures. Less government rather than more would be the biggest boon to companies. 'There is no need for an industrial welfare state,' said Cable. Hewitt, however, is the voice of the industrial nanny state. Her department even has a 'foliage strategy' to dictate to staff the policy for pot plants and where they should be placed. Children - sorry - civil servants, may bring in their own pot plants from home, so long as they don't cause a nuisance to others, but they are warned that if they fail to look after them properly and they turn sickly, properly qualified operatives will remove them.

Hewitt has had more chance than most to shape the DTI. The average tenure had shrunk to just 17 months before she was appointed trade minister in June 2001. But despite more than two years in charge, she has failed to overturn the DTI's image as the Department for Terrible Inefficiency.

With a budget of almost pounds 5 billion and a staff of 10,500, the DTI sets a poor example to the companies it lectures on the need for productivity.

It offers a ludicrous number of overlapping aid schemes for industry - Cable counted 178 - but small businesses often complain that the rules are impenetrable and the help a mirage.

One individual who managed to secure the services of a consultant through the DTI's Business Link branch is threatening legal action. She claims her ethnic food business collapsed as a result of taking his advice. She might have been less enthusiastic about following it if she'd known that the consultant had been banned by the DTI from being a company director.

Aware that there were shortcomings in the department, Hewitt sought help from outside the civil service.

In May 2002, she announced an elaborate structure of boards to help improve the way the DTI operates. Even Sir Richard Sykes, the ex-GlaxoSmithKline boss, was persuaded to become a member of the strategy board.

Little has been heard of the deliberations of these new boards, but in September the DTI unveiled a glossy new strategy document. There was the inevitable mission statement about 'creating the best environment for business' and platitudes along the lines of 'Britain must change, and change faster' and 'The DTI has changed'. There were little drawings to symbolise the changing shape of families, and a pair of clasped hands to indicate what was meant by 'forging closer partnerships'. There was even the intriguing revelation that '85% of DTI staff are keen to embrace new ways of working', which makes one wonder how tricky it might be for those 'customers' who deal with the other 15%.

But there is little evidence that the document has made the DTI any more effective in helping British business. In part, this must be because of the complicated array of tasks with which it is charged, being both proponent of business and its regulator and consumer champion. Tim Yeo, the department's Conservative shadow secretary, is clear that the role should be narrowed, so that the DTI becomes solely the battler for business, protecting it from overburdensome regulation at home and promoting it abroad.

The latter was supposed to be the task of Trade Partners UK, the newish organisation with Prince Andrew as its ambassador. But just as exporters have become familiar with the new structure for promoting their wares, the DTI has initiated a rebranding exercise and Trade Partners will become UK Trade & Investment. With it comes a change of logo and the inevitable bill, for around pounds 600,000 - money that could have funded the attendance of many smaller British firms at overseas exhibitions.

The new DTI strategy, however, makes clear that helping exporters is barely on the DTI agenda. Telling businesses how they should be run and international markets how they should operate is more than enough to keep all those bureaucrats busy

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