TUC slates Hewitt over shake-up at the DTI

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Patricia Hewitt, the Secretary of State for Trade and Industry, was forced on to the back foot yesterday after a ferocious attack by the trade unions on her "business- friendly" plans to overhaul the department.

The reforms will include the creation of a seven-strong strategy board at the DTI featuring three business leaders. Company executives will also serve on the boards of the four new DTI divisions being set up to handle the day-to-day work of the department in areas such as regulation, consumer protection, science and innovation, business support and regional policy.

John Monks, the TUC general secretary, said he was alarmed at the proposed reforms and the extent of business involvement. "There are major questions about possible conflicts of interest involved in this scheme which will inevitably lead to accusations of the DTI being in the pocket of business," he added.

Mr Monks said he was particularly concerned at the proposal to get a business leader to head a new division examining the impact of regulations on small and medium-sized companies and demanded to know to whom the business executives would be accountable, once appointed.

Ms Hewitt later rang Mr Monks in an attempt to reassure him that the DTI "being managed like a business is not the same as being run by one". An aide to the Secretary of State added: "This is not about tilting policy disproportionately in favour of business, it is about making the department more effective in its dealings with all stakeholders. We will continue to have an open dialogue with trade unions, consumers and business on the basis of fairness, not favours."

The aide also stressed that the new strategy board was not designed to set policy but to strengthen leadership and governance. Business executives appointed to it would be there because of their expertise, not to represent any interest groups, he added.

But as Ms Hewitt sought to pour oil on troubled waters the CBI stirred up the controversy again, praising the DTI's move to give business "more clout" in the Government.

The CBI director general, Digby Jones, who criticised ministers earlier this month for being too "pro-union", said: "Patricia Hewitt's initiative has a good chance of creating a stronger, more customer-focussed department. It could give companies the business champion within government that the CBI has long campaigned for."

David Lennan, director general of the British Chambers of Commerce, described the reforms as "an honest and encouraging start to the process of necessary change at the DT".

Among the other reforms proposed by Ms Hewitt, are a reshaping of the DTI's £1bn grant programme with the 150 existing aid schemes regrouped under just five categories.

The DTI's 200 top civil servants will also be required to spend one week a year with a business, preferably a small to medium-sized one, to get a better feel for how commerce operates.

The strategy board will be chaired by Ms Hewitt and will be advised by a new chief economist. Apart from the three business executives, the other representatives will be the DTI's Permanent Secretary, Robin Young, one other minister and another senior official. The business appointees are due to be announced early next year.