It might seem harsh to revisit a damning survey during a week when the DTI is deservedly claiming plaudits for the valuable Higgs review of corporate governance, published on Monday.
But in truth, the two issues go right to the heart of the issue of just what the DTI is for.
The government’s review of corporate governance is essentially two-pronged: as well as Higgs, there is the DTI’s review of audit and accountancy.
And, not for the first time, it seems the real power base is not within the DTI but on the other side of Parliament Square.
As the anticipation around Higgs reached fever pitch at the tail end of last week – coinciding with the deadline for submissions to the audit and accountancy review – the Financial Services Authority was letting it be known that it would be willing to take on extra powers to clamp down on corporate abuses.
Chairman Howard Davies is keen to gain additional investigative powers to probe those companies suspected of breaking financial reporting laws.
And sources close to the FSA are understood to have confirmed support from the Treasury for such a role.
Currently the FSA only has powers to react to complaints or media stories on companies. Any increase in powers could spell the end for the Financial Reporting Review Panel, which currently looks at accounts for breaches in financial rules.
By moving key powers from the FRRP (overseen, ultimately, by the DTI) to the FSA (a Treasury instrument, albeit an independent one), it would also again raise questions about the future of the DTI.
It is inconceivable that a modern capitalist economy could exist without a Department for Business. But does that department need to be a regulator as well as a champion for corporate causes? Especially as more and more decision-making power becomes concentrated within the corridors of the Treasury and the FSA continues its acquisition of SEC-style powers.
This month could signal a turning point. And any sort of scaling down of DTI power would beg an additional question. Is it a place for an ambitious minister like Patricia Hewitt?
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