Messages flashed across departmental WhatsApp groups on the night before Theresa May’s first reshuffle. Nothing terrifies civil servants quite so much as a machinery of government change – and as the new prime minister entered Downing Street last summer, it quickly became clear that she had the Department for Business, Innovation and Skills in her sights.
The ‘knowledge economy’ department created for Peter Mandelson at the height of the financial crisis was being broken-up. In its place, the PM had created a standalone Department for International Trade; re-united universities and apprenticeships with schools in an enlarged Department for Education; and brought energy policy back to its former home. In a stroke, BIS was dead and the Department for Business, Energy and Industrial Strategy was born.
I had charted the course of BIS from its birth until its demise: first as an opposition researcher shadowing science policy during the frenetic autumn of 2008, and now in 2016 as a special adviser watching the re-branding take place from the ministerial eighth floor.
The longest-serving officials were well-acquainted with the process. The ‘Department for Productivity, Energy and Industry’ lasted just days in 2005. If ever I jumped in a taxi on the way back to Westminster, I would only have to ask for the ‘old DTI building’ and the cabbies would know what I meant. The acronyms, of course, matter less than what BEIS does and who leads it.
Anyone who has followed the Prime Minister’s plans on industrial strategy and corporate governance would know that BEIS will be central to her domestic agenda. In turn, she has appointed some of the smartest and most charismatic ministers to the BEIS ministerial team. Part of their job now is to project a confident face to global investors and the wider public as they prepare the economy for Brexit.
BEIS has seen some early wins. The department quickly embraced the Japanese acquisition of ARM as a sign of post-referendum confidence. Nissan’s commitment to Sunderland won headlines, and we have seen a slew of US tech firms announce ambitious London investments. BEIS has also secured some additional fire-power from the Treasury, with the biggest increase in research funding in any parliament for almost four decades.
But there are always challenges, and a department with a wide-ranging economic brief is particularly susceptible to external events. The vital steel industry was an on-going focus during my time in the department. The cost and complexity of building a new generation of nuclear power stations is one of the biggest issues in the BEIS in-tray. The potential sale of Vauxhall casts a new shadow over an otherwise resurgent automotive sector.
Yet the political context for the new department is positive. Many officials and businesses will welcome the decisive commitment to a modern industrial strategy, building on the work of BIS both before and after 2010. The challenge, of course, is that BEIS is not solely responsible for its own success. The current approach to industrial strategy is more bottom-up than top-down and requires buy-in from across the public and private sectors. The new sector deals are a tantalising opportunity for businesses to come together and transact with government in response to a ministerial ‘open-door’ challenge – but will BEIS have the cross-government clout to deliver all that industry demands? (Backing from Number 10 will be critical here.) And how far will businesses of all shapes and sizes be able organise within their sectors to agree the kind of long-term investments that government expects? (Automotive and aerospace offer two good examples here.)
BEIS should be a good news department. I was always struck by the ability of our policy officials and press officers to unearth a great investment story from the department’s vast portfolio of activities – from microbiology to outer space. A catch-all economic ministry, the department has rebranded more times than anyone cares to remember. Yet its focus has remained constant: to raise productivity and ensure the long-term prosperity of our economy. Whatever you want to call it, the Business Department has never been more important.
Daniel Gilbert is Associate Director at Hanover Communications. He was a Special Adviser in the Department for Business, Innovation and Skills (2015-16) and shadowed the department for the Conservatives in Opposition (2007-10).
This article was originally published in The House Magazine’s Guide to BEIS, (February 2017).