Giving Heseltine an interventionist hand

THE MONDAY INTERVIEW: Bob Dobbie

Dr Bob Dobbie, head of the Government's competitiveness unit, was walking in Benbecula last month when he heard of Michael Heseltine's elevation to Deputy Prime Minister. He did not have to ring his office to guess that his unit was about to be whisked away from the Department of Trade and Industry to be part of Mr Heseltine's new power base at the Cabinet Office.

If there was one pet project Mr Heseltine was unlikely to leave behind when he moved from President of the Board of Trade to number two in the Cabinet, it was the competitiveness unit. And the man who set it up for him was Edinburgh-born Dr Dobbie, whose previous job had been to run another Heseltine enthusiasm, the Merseyside Task Force.

Over the past three years, the 30-strong unit has been at the heart of Mr Heseltine's switch to a more interventionist approach to improving the lot of British industry and commerce.

Dr Dobbie says: "He sees us as a think tank, one which can take forward issues and policies and help him to disseminate the competitiveness message. But it is not a pure think tank.

"You can publish white papers and talk to cabinet committees till the cows come home but unless you influence the decisions and actions of people more generally you won't get that improvement of performance," he adds. "Whitehall is only part of it. If I sit in Whitehall and insulate myself from firms I will have cut off a large part of the information flow and feedback that I need."

Dr Dobbie has met 500 companies over the past year. But according to other officials, his hardest task has been to inject the rest of Whitehall with the DTI's Heseltine-inspired zeal. The unit's move to the Cabinet Office will give more muscle to push ideas through the rest of Whitehall, outside the DTI.

Dr Dobbie is now the only civil servant below permanent secretary level to report directly to Mr Heseltine. The competitiveness programme has been dismissed by Mr Heseltine's critics as a passing enthusiasm that will come to nothing, or a vehicle for political self-aggrandisement. But those attacks are increasingly hard to sustain, perhaps because a more interventionist approach to the problem of national competitiveness has caught the mood of the mid-1990s, reviving ideas that Mrs Thatcher buried because of their association with 1970s corporatism.

The CBI, which seethed at the DTI's lack of interest in industry in the 1980s, is appreciative. Labour believes it does not go far enough.

To sell his message at a political level, Mr Heseltine has established and chairs a Cabinet committee on competitiveness, which has19 members, amounting to almost a full cabinet.

Dr Dobbie nevertheless rejects any suggestion that he is running a rival to the Prime Minister's central policy unit, the original Whitehall think tank, or that he is serving a political purpose for his master.

He says: "It is not that I am becoming politicised. I am a civil servant working in a system, but that direct line to Heseltine reflects the reality that he comes to us with a lot of issues where he wants advice. Because we have a generic role that covers many different departments in Whitehall, he finds it convenient to draw on us."

The unit has now masterminded two white papers for Mr Heseltine and a third is in preparation. These weighty documents have become the flagships of the competitiveness programme. Indeed, the exercise is well on the way to becoming an annual report on British industry and commerce.

Detailed work is also done with the help of the DTI, other Government departments, employers' organisations, the Government's regional offices, Training and Enterprise Councils and the DTI's Business Links offices.

Dr Dobbie describes the main work as "benchmarking of the economy," which means identifying the best and most competitive practices and persuading the laggards to copy.

This involves more than looking at individual industry sectors. Education and training, fiscal policy, the performance of service sectors such as tourism and insurance, technological innovation, regulation and business law have all been swept up in the Government's competitiveness agenda, which is why the rest of Whitehall has been brought into Mr Heseltine's project.

Dr Dobbie hates being seen as the head of some academic University of Competitiveness, a name he uses several times with increasing scorn. He says: "You have to ask whether you are asking a question because you are interested in the answer, or because you can do something about it."

An example is a new project to discover why Britain has as many world- class companies as Germany and other competitors, but a far larger proportion of under-achievers. The last thing he wants is for this to turn into an academic study.

There are echoes in Dr Dobbie's work of the defunct National Economic Development Office, which involved managers, trade unionists and politicians to study industry's problems, until it was abolished by the Tories. There is a hint of the old corporatist DTI in civil servants' involvement in the minutiae of industrial and commercial problems.

Dr Dobbie says the reality is very different. In the 1960s and 1970s, intervention was predominantly by the DTI, using taxpayers' money to subsidise research and development, to persuade companies to invest or to support ailing industries.

Those days have not vanished altogether, though the sums spent are far smaller. Siemens was encouraged to go to Tyneside with Government grants and DTI civil servants oversaw an pounds 80m aid package for Jaguar's new car plant.

But Dr Dobbie says modern intervention attempts to gain a better understanding of industry and commerce, and what its position is, especially in the world ranks. Then there is the need to try to work in partnership with industry, build on the strengths and overcome the weaknesses to get a change in performance.

Dr Dobbie prefers to cite the "benchmarking" of hotels as an example of intervention. This Government-backed exercise analyses the performance of British hotels and highlights best practices for others to copy. It is part of an attempt by the Department of National Heritage to improve the performance the British hotel and tourist industry.

Other examples include programmes to take British electronic and motor component suppliers to Japan

With the Deputy Prime Minister's flair for publicity, his competitiveness unit and his new hold on the central levers of power, the issue of intervention is one that is unlikely to fade quietly away.

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