Mandelson and the Ministry of Sorrows

WHEN PETER MANDELSON was appointed Secretary of State for Trade and Industry in July this column said he would not last very long. That was not to denigrate his abilities or doubt his capacity to handle the brief. Rather, it was a recognition of the fact that the Department of Trade and Industry has become the most accident-prone department in Whitehall.

Some departments serve as as springboards for ministerial careers. Others act as graveyards. The DTI fits firmly into the latter category.

The last Conservative government got through 13 Trade and Industry Secretaries in the space of 18 years. Tony Blair is now on his third in 20 months. Scant surprise that it has earned the soubriquet of the Ministry of Sorrows.

Two of Mr Mandelson's predecessors also left the DTI with the whiff of scandal in the air. Leon Brittan was forced to resign over the Westland affair and Cecil Parkinson over an affair of the more familiar variety.

Others simply disappeared into the political wilderness. John Biffen went from being "semi-detached" to being completely detached. And who remembers Paul Channon's tenure at 1 Victoria Street, much less those of Patrick Jenkin or John Nott?

Peter Lilley is remembered for the Lilley Doctrine, which stipulated that no state-owned foreign company should be allowed to buy a British company. Although it was popular with Mr Lilley, it was ignored by everyone else, including the Monopolies and Mergers Commission.

Michael Heseltine (whom Mr Mandelson, incidentally, described recently as one of his political heroes) struggled manfully with the portfolio for three years, only to be remembered for something he failed to do: privatise the Post Office.

Lord Young arrived at the DTI with a reputation as the minister who brought Mrs Thatcher solutions while everyone else brought her problems. He sold Rover for a song to British Aerospace and tried to reinvent the DTI as the Department for Enterprise but he too failed to leave a lasting impression.

In truth, the only politician who has left his mark indelibly on the DTI was Sir Keith Joseph, and that was by inventing privatisation and thus reducing the DTI to a shell of its former self. When Nicholas Ridley arrived a decade later he asked terrified officials exactly what the department was for as he breezed through its revolving glass doors.

That remains a very good question. Mr Mandelson was in the job for just four months and 26 days (an even shorter tenure than that of Cecil Parkinson). And yet in that brief space of time he had begun to mould the DTI in his own image. With the patronage of Mr Blair, he set about recreating the DTI as one of the great economic departments of state. Mr Mandelson's efforts culminated last week with the publication of his Competitiveness White Paper.

The document introduced us to the Mandelsonian vision of a "knowledge- driven economy," where entrepreneurs would become the lifeblood of Britain and enterprise would no longer be a dirty word.

Although the DTI's budget is a fraction of what it once was, Mr Mandelson reckoned that with an extra pounds 1.4bn for science, a spot of pump priming here and a taskforce there, the DTI could be in the vanguard of the move to that new economic landscape.

Of course, the White Paper was also an attempt to wrest back the high ground from Gordon Brown, whose dislike of Mr Mandelson is well documented and whose determination to marginalise the DTI is well known.

Most recently the two Cabinet ministers had fought tooth and nail over proposals to give the Post Office more commercial freedom in the face of fierce Treasury opposition. Finally the Prime Minister was called on to intervene, but not before Brown aides had dismissed Mr Mandelson's package of reforms as "garbage and rubbish". With Mr Mandelson gone, his Competitiveness White Paper will probably be consigned to the dustbin like those of his predecessors.

In choosing Stephen Byers to replace Mr Mandelson, Mr Blair has swapped someone who cannot fill in a mortgage application properly for someone who cannot multiply seven times eight properly. But that apart, little else is likely to change.

Mr Byers is every bit the arch-moderniser and archetypal Blairite that his predecessor was. The light regulatory touch will surely remain, as will the pro-competition, pro-business stance that the DTI adopted under Mr Mandelson. On Fairness at Work and the minimum wage, Mr Byers is unlikely to be any more accommodating to the trade unions than his predecessor.

The in-tray contains one or two hot potatoes. Mr Byers will have to rule on whether Rupert Murdoch should be allowed to buy Manchester United. But at least his task is not complicated by being a close friend and neighbour of Mr Murdoch's daughter. He will also have to decide whether the RAC should be allowed to sell its roadside services arm to Cendant and pass on pounds 35,000 windfalls to its members. At some point too, Mr Byers will have to decide when the coal industry can stand on its own two feet and the construction of gas-fired stations can resume (the one real blot on Mr Mandelson's otherwise impeccably business-friendly record).

But his real task will be to rebuild confidence in a department where morale has once again hit rock-bottom. For two decades now, its officials have struggled to adjust to one quick-fire change after another in style, policy and personnel. It has sapped the will and weakened the resolve. Moreover it has resulted in the DTI being held in low esteem by the business community.

As for Mr Mandelson, he will need his little black book and his famed contacts more than ever now. His skills are lost to the DTI forever, but who would bet against his political return after a suitable period of rehabilitation? Like one of his "exotic" predecessors at the DTI, Mr Mandelson could prove himself as much the comeback kid as Cecil Parkinson was for the Conservatives. Minus, of course, the love child.