Brown plans Whitehall shake-up to put new focus on climate change

Gordon Brown is drawing up plans for a major shake-up of Whitehall departments to allow the Government to give greater priority to combating climate change.

The Department of Environment, Food and Rural Affairs (Defra) could become a more powerful Department of Environment and Energy. At present, energy comes under the remit of the Department of Trade and Industry (DTI), which would face abolition.

David Miliband, the Secretary of State for the Environment, is likely to head the expanded department. As well as leading the fight against climate change, he would be in charge of plans to build a generation of nuclear power stations and boost renewable sources such as wind, wave and solar power.

Mr Brown, who is expected to succeed Tony Blair this summer, is keen to promote younger ministers. He believes keeping Mr Miliband in the post would ensure continuity; moving him could be seen as a sign that the environment was not important.

The Government's response to climate change has been hampered by battles between Defra, which has favoured tougher action, and the DTI, which has taken a more pro-business stance. Although Mr Miliband and Alistair Darling, the Secretary of State for Trade and Industry, have tried to resolve the problems, Mr Brown believes the present structure of Whitehall is a barrier to effective action. "We can't afford the luxury of people pulling in different directions on such an important issue and spending their time firing off letters to each other," said one Brown aide.

The Government is in grave danger of missing its target of reducing carbon dioxide emissions by 20 per cent by 2010. At present, it is on course for 16 per cent.

The Chancellor is considering the plan as part of his government-wide spending review in July. He is adopting a "year zero" approach rather than basing departments' future budgets on their existing spending, which has allowed him to launch a root-and-branch review of Whitehall. The review will set out Mr Brown's priorities for the next 10 years and would be the blueprint for his time as prime minister. From 2008, overall public spending is likely to rise by 1.9 per cent more than inflation a year, much less than in recent years.

The Chancellor believes the central role of the DTI, which employs 10,400, in promoting British industry at home and abroad could be hived off to a body staffed by non-civil servants with more expertise.

The changes would give greater emphasis to science, now part of the DTI, with the aim of enhancing Britain's competitiveness. A new department responsible for science, skills, enterprise and innovation could take over some of the functions of the Department for Education and Skills and the Department for Work and Pensions (DWP). Trade policy could be transferred to the Treasury. But abolition of the DTI would be strongly opposed by business groups.

Mr Brown is also resisting proposals by John Reid, the Home Secretary, to create an US-style Department for Homeland Security to spearhead the fight against terrorism. The Chancellor wants a single strategy for domestic and international security with its own budget, overseen by the Prime Minister, the Home Secretary and the Foreign Secretary.

Scrapping the DTI would save money, helping Mr Brown's drive to cut Whitehall costs.