DTI shake-up revives sector divisions

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MICHAEL HESELTINE, President of the Board of Trade, yesterday implemented his long- awaited overhaul of the Department of Trade and Industry by reshaping it into sectoral divisions charged with sponsoring individual industries.

The reorganisation also involves the creation of a new division responsible for industrial competitiveness and the setting up of 'one-stop shops' to provide information and advice to businesses and 'sharpen the focus' of the department.

However, there will be no increase in the staffing or budget of the DTI nor any marked change in competition policy. Sponsorship will not mean a return to intervention or subsidies.

Mr Heseltine said that the reorganisation would bring the DTI closer to industry and provide the basis for informed dialogue and constructive partnership between government and business. But this did not mean it would become 'a whingeing Whitehall department listening to any piece of special pleading that comes to us'. Mr Heseltine said he had offered to reduce the budget of the DTI in this autumn's public spending round.

Nor did he give any indication that the DTI would respond sympathetically to industry's lobbying for lower electricity prices, higher capital allowances and increased export credit cover.

The overhaul will take the DTI back to its structure in the early 1980s, before Mr Heseltine's predecessor, Lord Young of Graffham, abolished its sponsoring role, turned the sector divisions into market divisions and launched his 'enterprise initiative'.

Gordon Brown, Labour's trade spokesman, said the reform was 'wholly inadequate to the scale of Britain's industrial needs' and amounted to little more than a reshuffling of desks. It promised no extra cash and no coherent industrial strategy.

Business groups gave a guarded welcome, with the Confederation of British Industry and the British Chambers of Commerce supporting the focus on industrial competitiveness.

But Howard Davies, the CBI's director-general, said exporters were looking to the Government for an urgent response on specific issues. 'Getting the structure right is important,' he said. 'But industry is more interested in the strategy. That must now be Mr Heseltine's top priority.'

The Institute of Directors also sounded a note of caution, warning that if the divisions became channels for special pleading the DTI would be 'on the slippery slope to a sectoral approach to industrial policy which has proved ineffective in the past'.

Under the reorganisation there will be 15 sectoral divisions sponsoring industries ranging from chemicals, steel and textiles to electronics, vehicles, aerospace and telecommunications.

The industrial competitiveness division will compare Britain's performance with that of other nations in key sectors and examine what lessons can be learnt.

Initially there will be about 10 'one-stop shops' in large cities, but the number could increase if there was sufficient demand from business, Mr Heseltine said.

(Photograph omitted)