The merry-go-round of reshaping the ministry of business begins again

The author, a former FT editor, is head of industrial policy at Policy Exchange.

When Harold Wilson, the newly elected Labor prime minister, set up the Department of Technology in 1964, he was thinking along the same lines as Rishi Sunak, who this week announced the creation of a new department for science, innovation and technology.

Wilson told the head of the company that became known as Mintech that his first task was to save the British computer industry. If you replace computers with semiconductors or artificial intelligence, Sunak’s new science department looks remarkably like Mintech.

If this suggests a degree of continuity in UK industrial policy, nothing could be further from the truth. In 1970, Edward Heath merged Mintech with the Board of Trade to form the Department of Trade and Industry (DTI). This marked the beginning of an unusual saga that saw the business department undergo numerous reorganizations, many name changes and a succession of generally short-lived ministers.

In 1974 Labor returned to power and Wilson split the DTI into three departments, for industry, trade and prices and consumer protection. They were then brought together again a few years later by the Thatcher government. (Keith Joseph, Margaret Thatcher’s first industry secretary, had questioned whether a separate department was needed.)

The DTI portfolio changed several times during the 1980s and 1990s. It took over the Business and Deregulation Unit and later the Office of Science and Technology. The energy was dissipated and then reabsorbed.

The result was a large and confusing set of responsibilities, very difficult to manage. Michael Heseltine provided a new sense of dynamism between 1992 and 1995, but then the dynamism stalled. Further fragmentation and change under New Labor dismantled the DTI. In 2007, two new departments were created, one for Innovation, Universities and Skills (DIUS), the other for Business, Enterprise and Regulatory Reform (BERR). Two years later they were reunited under Peter Mandelson as the Department for Business, Innovation and Skills (BIS). Gordon Brown also created a separate section on Energy and Climate Change.

By this time, industrial policy was back in vogue and was actively pursued by the coalition government (2010-15). Theresa May, prime minister since 2016, had even greater ambitions on this front, so the ministry was re-energized and renamed the Department for Business, Energy and Industrial Strategy (BEIS).

Now, the merry-go-round is spinning again, with four new or revamped divisions and (inevitably) more names. In Sunak’s defence, the new structure may well have advantages. Energy probably needs a separate section, and so does science, given its central role in the government’s new development plan. At a lower level, it never made sense for digital industries (including semiconductors) to be taken over by the Ministry of Culture, Media and Sport.

However, two nagging questions remain. Are the benefits significant enough to offset the disruption and delay these reforms will inevitably cause as the changes roll out? The other is how long will the new structure last?

The instability that has long dogged the UK’s industrial policy, and its approach to innovation, has not been helpful to business or scientific research. this seems to be a peculiarly British weakness.

Take the example of Darpa, the bustling US research funding agency and model for the UK’s new Advanced Research and Invention Agency. Darpa was created in 1958 and continues to exist in roughly its original form. it does so partly because of some early successes, but also because it has never been the politicians’ game. That kind of continuity is sorely needed here.

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