The Department of Trade and Industry has come under attack from business leaders for failing to respond to the chronic difficulties facing recession-hit manufacturers.
Both the CBI and Engineering Employers’ Federation have accused the DTI of failing to give UK industry the backing it needs.
The attacks came in responses to a review of the department’s operations, launched by trade and industry secretary Patricia Hewitt after she took over from Stephen Byers earlier this year.
In a scathing response from the CBI, the industry body accuses the DTI of being out-of-touch with the sector whose interests it is supposed to promote, weak in fighting its corner against other government departments and inefficient in administering initiatives to support business.
‘We need to see much more championing of the business message within government and not so much of the heavy hand of regulating business,’ said CBI director-general Digby Jones.
He cited the ‘Rip-Off Britain’ campaign two years ago as an instance of the DTI not being aware of the real situation, as the inquiry subsequently cleared British business of the charge. In the meantime, he said, the campaign ‘did nothing to help jobs in Britain’.
The EEF echoes these strictures in its submission to the review. On the DTI’s relatively weak position in government, it says: ‘There is a perception among industry and business organisations that, in the last few years, the DTI has lost its influence with other Government departments, primarily HM Treasury.’
The EEF identifies the imposition of the climate change levy in April as a prime example of this loss of influence. The levy will add £95m to the annual bills of 3,000 of its more energy-intensive member companies.
The EEF submission also says the department must improve its understanding of industry’s needs – recommending ‘better use of secondees, especially from larger medium-sized organisations’ – and accused it of frequently being too risk-averse in supporting industry initiatives.
‘Efforts need to be taken to find ways of supporting potentially more adventurous schemes that could produce major long-term benefits,’ it says.
On the issue of how the DTI reconciles its regulatory function with that of promoting UK plc, the EEF says the tension between the two roles should ‘not be allowed to constrain DTI’s role as the champion of industry’.
The EEF also calls for an improvement in the delivery of DTI services through the regional development agencies. ‘There is a general view among the business community that the RDAs so far have delivered very little,’ it comments.
The manufacturers’ organisation said that while all its member associations have regional advisers who are ‘reasonably well in touch’ with the roles and responsibilities of RDAs, this was not true of individual companies and other organisations. It says a ‘campaign of clarification’ would be a good way forward.
A leading trade union also criticised the shortcomings of RDAs this week, calling for the establishment of elected regional assemblies to lead the fight against ‘manufacturing meltdown’.
The MSF union launched its campaign on the opening day of the TUC Conference – where Hewitt received a distinctly cool reception. MSF general secretary Roger Lyons said the union believed that elected regional government offered the best chance of regenerating areas hit by the manufacturing crisis, as they would be a ‘more effective’ means of channelling the necessary development funding from central government and the European Union.
Lyons said elected representatives often made the difference in the success or failure of a regeneration programme, and pointed to Scotland and Spain as prime examples. ‘Catalonians and Clydesiders get more European money invested in their regional economy per capita than Geordies or Cornishmen because they have elected regional assemblies,’ he maintained. ‘The people of the English regions are in danger of becoming second-class citizens in Europe.’