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Friday, 8 June, 2001, 20:14 GMT 21:14 UK
UK's new trade and industry minister
Patricia Hewitt
One of the cleverest people in the party
Stephen Byers' move to become secretary of state at the Department of Transport, Local Government and the Regions has paved the way for Patricia Hewitt to become secretary of state at the Department of Trade and Industry (DTI).

The relatively inexperienced politician who has served just four years as a member of parliament has been described as "one of the cleverest people in the party".

Ms Hewitt, who has worked behind the scenes in the Labour party for several years, played a key role in shaping Labour's social policies and in making the party re-electable as Neil Kinnock's press secretary and as the first director of the left-leaning think tank the Institute for Public Policy Research.

However, she also has private sector experience at management consultants Anderson.

She has spent her last two years as minister of state at the DTI in charge of e-commerce, masterminding the successful 22bn auction of the mobile phone spectrum.


Ms Hewitt's appointment could coincide with a shake-up of the DTI.

The sprawling department, which covers business issues as diverse as the regulation of the energy sector to the minimum wage, is set to become even larger - with the addition of responsibility for regional policy from the Department of Environment, Transport and the Regions.

With the government's priority in its second term of office to boost productivity in order to raise living standards, the role of the DTI has moved to centre-stage.

However, industry had hoped that Mr Byers would have kept his job.

There had been a view that he was a useful counterweight to Mr Brown, whose Treasury empire has continually expanded its powers over other departments.


Among the issues on the trade secretary's in-tray are several which involve disputes with the Chancellor.

A decision by the Low Pay Commission on whether to raise the minimum wage for young people is due in July - and reports suggest that the Chancellor is against a plan to abolish the lower youth rate, which currently applies to those between 18 and 21, for those aged 20 and above.

Also on the agenda is the issue of family friendly working practices, with the government consulting about whether companies should be legally required to allow parents the right to work part-time.

And the issue of "fat cat" pay packets is still unresolved, with Gordon Brown reportedly opposing plans to force companies to give more power to shareholders to oppose excessive pay awards for company bosses.

Consulting about closures

Another looming issue is the demand by trade unions for more rights to consultation with companies before they announce job closures - something that other European countries have.

Such a move would help Ms Hewitt avoid the embarrassment suffered by her predecessor, Mr Byers, when he was not informed about BMW's plan to sell Rover.

The GMB leader John Edmunds has gone so far as to suggest that his unions' support for Britain's euro membership would depend on the government's attitude towards this question.

Industry groups like the CBI, however, are believed to be strongly against this proposal - and may have the support of the Chancellor.

In general, Mr Byers had, as trade minister, been strongly in favour of euro membership, reflecting the view of many multinational companies - in contrast to the greater degree of scepticism by Mr Brown.

Mergers coming up

Ms Hewitt will also have to take some urgent decisions on some pending mergers - although in the long term the government plans to take decision-making powers on competition away from the politicians.

Most important is the Lloyds-Abbey National merger, which would create the largest UK retail bank with a 27% market share.

Changes to merger rules - which suggest that global competition should be taken into account when deciding whether mergers should be allowed - could help ease the way for this deal to be approved.

Also pending is a decision on restructuring the brewing industry, after a court ruling that Belgium's Interbrew was not fairly treated when regulators told it to sell Bass Brewers.

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