Howard does away with the DTI

SIR Nicholas Ridley, Secretary of State for Trade and Industry back in the 1980s, was one of the first in that office to wonder in public what the DTI was for. Some 15 years later, new Conservative leader Michael Howard would appear still not to have found the answer.

His solution is to abolish the post. There is no Shadow for the DTI in his Shadow Cabinet. Instead, industry matters will be dealt with by Stephen O'Brien, a junior to Shadow Chancellor Oliver Letwin, while trade will be the province of James Arbuthnot and come under Michael Ancram's foreign affairs brief.

It is an odd decision. If the Conservatives are to lay claim to being the party of business, they ought at least to pretend to be interested in the wealth-creating sector. Even if the industry portfolio is boring, it does - or at least did - have under its umbrella such important matters as energy. Energy policy is a make-or-break issue for this country over the next 20 years, and presumably the Conservatives hope to be back in office at some point in that time.

Labour has failed to take the tough decisions on nuclear power or renewables, lumbering us with such a fudge that there is a serious risk of power shortages in five years. Even if five years is too far ahead for any self-respecting politician to look, it would be comforting in the meantime if the Conservatives gave some sign of realising that the energy brief is worth rather more than the passing attention a junior Shadow Minister's junior.

Much the same could be said about trade. It is ironic that just as there is the prospect of retaliation by the European Union over US tariffs on steel imports, the Tories downgrade the job. Few countries are more dependent than Britain on selling overseas, and the liberal free trade consensus is under more pressure today than it has been for years. That ought to matter to the Opposition.

The final oddity of this Shadow Cabinet is that it seems to have two chairmen, a concept that would surely have finally sent poor Derek Higgs over the edge had he had to grapple with it. Given that there is not a business in the land that has run successfully with joint chief executives, the idea that an organisation as prone to back-biting as the Tory Party can be run by two chairmen makes the mind boggle. Time for a shareholder revolt perhaps, if only to make the party of opposition think about its governance.

Lack of funds

THE increase in National Insurance contributions in the last Budget, following on from a period when pay increases were fairly muted, has meant many households have had a lower disposable income this year than last - a fact that has been disguised by their readiness to run up debt and the willingness of financial institutions to provide it.

Going forward with the economy stable but hardly exciting, the prospects for next year's pay rises again look feeble - an average of just 1.1% in real terms, say consultants Mercer.

Given that the Chancellor is going to have to put up taxes because of the demands of the National Health Service, the chances are that real disposable income next year will again be lower for many households. Add in an increase in the interest costs of the nation's debt burden as rates climb higher and the question is: 'Who is going to save?'

Who is going to buy the new Sandler-style savings products the Government is so keen to see launched next year? Who is going to buy the unit trusts and pension products the fund management industry needs to sell if it is to get out of the mire?

Who, for that matter, in the private-client community is going to have the funds to keep the stock market revival moving ahead?

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