Stephen Byers, the trade and industry secretary, has lost credibility with both the cabinet and industry following the sale of Rover Group, senior industry observers said this week.
John Bartle, an expert in government and lecturer at the University of Essex, said: `He has obviously not been on top of his subject and has been made to look quite naive. His cabinet colleagues will now take him less seriously.’
But he said Byers would probably not be removed immediately. `Old Labour tried to revive lame ducks, but new Labour is different. Byers will be judged more on how he deals with the consequences of Rover.’
His standing among manufacturers has also been damaged. Although he has no direct responsibility for the strength of the pound and its impact on manufacturing, some say he has been too slow in dealing with its consequences.
One industry figure who has dealt with Byers said: `The chickens have now come home to roost. We have been warning that something like this could happen for over a year now.’
Another said: `Given the events of the last week, rightly or wrongly, Byers’ reputation will be definitely tarnished.’
Byers has also been criticised recently by small business associations, which are concerned that he has failed to live up to an early commitment to reduce red tape. The Federation of Small Business said it would wait until the new Small Business Service had made an impact before passing judgment.
`If the SBS does not reduce the amount of regulation from government, business will blame the DTI,’ a spokesman said.
If Byers does go, one possible replacement being mentioned is Andrew Smith, chief secretary to the treasury. His constituency includes the Cowley plant which BMW has retained to build the new Mini.