The department has a wide remit and an ambitious ministerial team, but Joshua Chambers finds that it also has a shrinking budget and tough choices to make.
The Department for Business, Innovation and Skills is the lead department on business development, and shares responsibility for building sustainable economic growth with the Treasury. On his first day in office David Cameron made efforts to emphasise its importance, telling BIS officials: “We have two big economic departments: the Treasury and BIS.” Writing to CSW, minister for employment relations, consumer and postal affairs Edward Davey agrees: “BIS is a major economic department, complementary to the Treasury – if the government is to be a success then both departments must succeed.”
However, while BIS recently enjoyed a purple patch – thanks largely to the return of Peter Mandelson – within Whitehall the Treasury has always been the greater power. And when the new government sought to find £6.2bn of savings, BIS saw the biggest cuts by department: £863m. The department is therefore slimming down, and quangos have borne the brunt of this. Since the formation of the coalition government, 17 quangos have been axed. Yet despite a reduction in its funding, BIS remains ambitious and has the responsibility for ruling on some important – and politically sensitive – policy areas.
Davey says there are five priorities guiding the department: ensuring a balance between spending cuts and promoting growth; deregulation; higher education funding; science and research funding; and reforming Royal Mail.
The trickiest high-wire act will be deciding how universities should be funded. Secretary of state Vince Cable has floated the idea of a graduate tax, though many Conservatives oppose the idea. The Tories would largely prefer to increase tuition fees, but the Liberal Democrats have long campaigned against fee increases.
At present, the issue is being reviewed by former BP chief Lord Browne, after he was asked to do so by the previous government. Davey says that the coalition won’t be bound by his findings: “Lord Browne’s review will of course be critical to the outcome, though the final decision must remain with ministers and ultimately Parliament.”
Another difficult issue for the Liberal Democrats is the privatisation of Royal Mail, which may have the potential to upset the left wing of the party. Davey denies this, saying: “The Liberal Democrats had a clear manifesto commitment on Royal Mail, debated extensively in the party, and if anything the rationale for getting private capital into Royal Mail has significantly increased” since the manifesto was produced.
The ministerial team
Vince Cable is a well-known figure in British politics. While he was once an academic at the University of Glasgow, he’s spent many years in business and research institutes and has a pragmatist’s focus on the issue at hand. According to Davey, “departmental meetings are extremely businesslike. Time pressures focus the mind and, while Vince is a relaxed chairman, he ensures we keep our eyes on the big picture.”
Cable is joined by another well-known figure, David Willetts – the minister of state for universities and science. In opposition he was David Cameron’s shadow education secretary, but after an internal party spat over grammar schools he lost the job and Michael Gove was promoted in his stead.
John Hayes is minister of state for further education, skills and lifelong learning. He is on the right of the Conservative Party and chair of the Cornerstone Group.
Minister for business and enterprise Mark Prisk is a surveyor and businessman, first elected to Parliament in 2001. In opposition, he was appointed shadow minister for Cornwall, despite the lack of a minister for him to shadow.
Edward Davey was the Liberal Democrats’ spokesman on foreign affairs, but dropped down the ranks in the coalition to become a minister of state. Reforming the Royal Mail is bound to cause him some trouble with the Communication Workers’ Union, yet he defends the role of trade unions, telling CSWthat “modern trade unions are an important part of society and the economy”.
The parliamentary under-secretary is Tory peer Baroness Wilcox, while Ed Vaizey is shared with the Department for Culture, Media and Sport as minister for culture, communications and creative industries.