Select Committee on Trade and Industry Second Report


The Trade and Industry Committee has agreed to the following Report:—



Committee scrutiny

1. Over the lifetime of this Parliament, we have sought to examine the work of the Department of Trade and Industry (DTI), not only through over 30 separate inquiries, but also through general evidence sessions covering a number of aspects of the department's work. We have held four sessions of general oral evidence from successive Secretaries of State.[1] We have participated in two informal private meetings with the Permanent Secretary and Directors-General of the DTI. On 4 July 2000 we heard formal oral evidence from the Permanent Secretary.[2]

2. We have examined the principal document setting out the department's policy and expenditure, its Expenditure Plans Report published each spring.[3] This document reports on past activities and sets out policy programmes and future expenditure plans. We have also examined the department's Supply Estimates and Supplementary Estimates.[4] On the basis of these documents, we regularly submit written questions to the Departments on a range of issues. We have published the responses together with the related minutes of the evidence taken from Ministers.[5] The information thus obtained has been of use to us in the course of individual inquiries, as well as fulfilling our remit to undertake informed and detailed scrutiny of the department's activities and to expose the results to the public.

What is DTI for?

3. The work of the DTI is wide-ranging and complex. It comprises many of the tasks formerly carried out by four separate Ministries — Industry, Trade, Energy and Labour (later Employment). From our visits abroad and from discussions with parliamentary colleagues from overseas visiting the UK, it is apparent that the wide scope of the department's responsibilities is unusual.. Our inquiries have given us some appreciation of the practical work done by DTI:

4. In our reports we have on occasion had cause to criticise the performance of the Department of Trade and Industry. Sometimes we have concluded that the department's voice had not been raised as it should have been in Whitehall: for example, during discussions on the climate change levy. We have also criticised failures of economic intelligence: for example, over the fading commitment of the BMW Board to retention of Rover. But inherent in such criticisms has been a settled recognition that the Department has a vital role to play at the heart of Government. We suspect that it is not universally appreciated that much of the department's business is far removed from its role, which it shares with the Treasury, in the general promotion of enterprise and competitiveness. Any notion that its principal functions could be adequately performed by a Finance Ministry, even one with substantially more staff than the Treasury, can only be based on ignorance or misunderstanding of what the Department does now.

Annual Departmental Report

5. The annual Departmental Report (DR) is a professionally produced, thorough and informative document. Each year has brought some improvements, some following consultation at an official level with this Committee. It suffers, however, from one fundamental defect. It seeks to combine two disparate functions —

The latter material swamps the former. The weakness inherent in this unhappy combination is exacerbated by the spring publication date, which leads to the out-turn figures being sadly out of date.

6. The problem is capable of ready solution. Most Government Agencies produce an Annual Report and Accounts in July of each year, or failing that in the early autumn. We understand that the introduction of Resource Accounting and Budgeting will in due course lead to two separate Reports, one forward looking in the spring, and one backward looking in the autumn. That will be welcome. In the interim, we recommend that the Department make every effort to separate out within each Chapter and section of the Departmental Report those passages intended to be factual reporting of recent past performance from those passages which set out policy and plans for the future.

Minutes of Evidence taken from Rt Hon Margaret Beckett MP, President of the Board of Trade and Secretary of State for Trade and Industry, 4 Nov 1997, HC 308 of 1997-98; Minutes of Evidence taken from Rt Hon Peter Mandelson MP, Secretary of State for Trade and Industry, 4 Nov 1998, HC 1138 of 1997-98; Minutes of Evidence taken from Rt Hon Stephen Byers MP, Secretary of State for Trade and Industry, 20 April 1999, HC 396 of 1998-99; Minutes of Evidence taken from Rt Hon Stephen Byers MP, Secretary of State for Trade and Industry, 15 Feb 2000, HC 261-i of 1999-2000 Back

2  See Ev pp 8-23 Back

3  We refer to this as the annual Departmental Report (DR), distinguished by the year of its publication, as " DR 2000" Back

4   See First Report, HC of 2000-01, paras , for report of problems encountered with examination of Supplementary Estimates Back

5  See eg Ev pp 1-8 for answers to Questions on DR 2000 Back

6  Qq 86ff: Ev, p 6, Answer H Back

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Prepared 25 January 2001