Exclusive: MPs set to fight threat to axe Business, Innovation and Skills department

Opponents fear that without a dedicated department, state-backed business initiatives will falter

Labour MP Adrian Bailey will launch this inquiry if he is re-elected chairman of the Commons Business Select Committee (Getty Images)

A powerful committee of MPs is set to grill ministers over whether the new government is developing plans to abolish the Business, Innovation and Skills (BIS) department.

The Labour MP Adrian Bailey will launch this inquiry if he is re-elected chairman of the Commons Business Select Committee later this month.

Mr Bailey believes that plans for severe Civil Service cuts could eventually see BIS abolished and its responsibilities spread across Whitehall. The Tory right has previously supported this idea, while the Taxpayers’ Alliance pressure group recently estimated that closing and redistributing the functions of the departments for business, energy and culture could save £7.5bn over five years.

But opponents fear that without a dedicated department and a large pool of staff, state-backed business initiatives will falter.

Business regulation, government-led apprenticeship schemes, and innovations like the Green Investment Bank, which leverages private-sector money into wind farms and solar projects, all come under the department’s remit. The City and small business would also lose one of its few direct links with government.

Mr Bailey said last night: “Looking at the scale of the cuts that are coming, it is difficult to see how BIS could survive in its current shape. Also, I want to look at skills, because the UK still has an incredible skills gap and I’m not sure any of the parties have addressed that.”

The 69-year-old, who regained his West Bromwich West seat last week, also wants to look at employee ownership and mutual models. He thinks more of these businesses could be created through an improved regulatory framework.

Select committees hold government departments to account and investigate wider issues related to those policy areas. Their influence has grown in recent years and they are viewed by MPs as an alternative career path to rising through the ministerial ranks.

At hearings in the last parliament, for example, Mr Bailey embarrassed the then Business Secretary, Vince Cable, over his alleged mishandling of the privatisation of Royal Mail.MPs can serve up to two five-year terms as a committee chair and are elected by the House of Commons. Mr Bailey beat Labour’s Barry Sheerman to the chairmanship in 2010 and the latest election is expected to take place later this month.

If he wins Mr Bailey will find that he leads a very different committee than in the last parliament, with five of its 11 members gone from the House of Commons.

Tough-talking Conservative Brian Binley, who at a hearing in January condemned the buyout baron Jon Moulton over the Christmas collapse of the parcel delivery firm City Link, stood down before the election. Labour’s Ann Mckechin, William Bain, and Katy Clark, as well as Liberal Democrat Mike Crockart, lost their seats as part of the Scottish National Party’s near-sweep north of the border.