Alan Johnson: This job's a laugh, even when your enemies go nuclear

The man at the DTI says 'you can't create enterprise with legislation'. But others say he'll kill it with regulation

"It's a co-op with knobs on," enthuses Alan Johnson, describing his plans for an expansion of social enterprises - companies that are owned by the people who work for them. In this one phrase, he encapsulates the two qualities that set the Secretary of State for Trade and Industry apart from his three predecessors in the job: Patricia Hewitt, Stephen Byers and Peter Mandelson.

One is a clubby accessibility, allied with a self-deprecating sense of humour, that has emerged in his first nine months in the job. This was shown at a DTI party last week when he rounded on a columnist who said he wasn't an intellectual. "I'm off to [the World Economic Forum in] Davos," said Johnson, his accent betraying his poor upbringing in (pre-gentrification) Battersea. "You don't go to Davos unless you're an intellectual. And anyway, I've not been to that part of Greece before."

The other is that he is genuinely in touch with the traditions of the Labour Party. A former postman who became leader of the Communication Workers Union, he brings more than a whiff of Old Labour into a Cabinet that is largely shaped by its adherence to the Blair-Brown "third way" project.

Johnson's project for "co-ops with knobs on" will assist the social enterprises, which he sees as a way to kick-start small businesses in poorer parts of Britain. The DTI is launching an action plan which will include the creation of a recognised business model that people can use to start their own social enterprises. It is also looking at using government procurement to favour social enterprises where possible.

"The Rochdale pioneers [whose mid-19th century co-op was a foundation of the Labour Party] were the first people to come up with a social enterprise," says Johnson, before citing a more modern example: Jamie Oliver's 15 restaurant.

Another example can be found at Sherwood Energy Village, a mixed-use business park on the site of an old colliery in Nottinghamshire. Its success in regenerating a town destroyed by the pit closures of the 1980s led to it winning the first Enterprising Britain award in a competition run by the DTI.

This year, The Independent on Sunday is supporting the competition, which aims to find the town, city or place that is best encouraging enterprise and improving economic prospects.

"This is part of ensuring we do everything we can to promote enterprise," says Johnson. "Creating an enterprise culture can't be done by legislation."

Critics of the DTI - and there are more than a few in business - argue that his fine words don't translate into practical actions. The department is said to have spent £60m on literature that encourages small businesses, while presiding over an increase in regulation at the sharp end. Issues such as parental leave, the minimum wage and higher pension costs, it is claimed, are strangling smaller companies.

Johnson rejects this, saying that there are 600,000 more small businesses now than there were in 1998, shortly after Labour came to power, and that they employ over 900,000 more people. The changes on parental leave (which give rights to fathers as well as more rights for mothers) will, he suggests, lead to just one worker in 450 taking more time off. And, he adds: "The cost of the administration works out at less than 3p per worker per week."

It has been argued that the changes will discourage employers from taking on women who are "of childbearing age". But Johnson replies: "Society needs people to procreate and it needs women in the work- force. I have heard this argument at every stage. But industry needs that huge female talent pool. The real issue is how employers fill job vacancies and retain talent."

The CBI has rounded on Johnson for the deal he struck with civil service unions on the state retirement age. To get the massive budget underfunding problem under control, the Government had wanted to increase the age from 60 to 65, but in the end, Johnson agreed that existing workers could retire at 60 and only new employees would have to stay on to 65.

Johnson argues that his critics are hypocrites. Because people now change jobs more often, 90 per cent of civil servants will have left the sector before they reach retirement, he points out. The average age of retirement in the service will be 63 - not much different from the private sector.

"It is gloriously ironic that 19 business leaders sent a letter to The Times saying we were setting a bad example. A TUC analysis showed they had a retirement age of 60 and a pension 26 times that of their employees' average pension. Who is setting the example?" says Johnson triumphantly.

Johnson has just spent two days in Davos, largely trying to get the Doha round of trade talks back on track after December's Hong Kong negotiations, which he admits were "not a roaring success". Earlier in the week, he launched the Energy Review, which, for all its discussion of saving power and carbon sequestration, is essentially about where the UK will build new nuclear reactors. Johnson promises that this is not just another review that will lead to another discussion. A decision, he vows, will be made in the late summer.

He also insists that he has an "open mind" about nuclear power, saying that the key issues will be affordability and how to deal with waste. The Committee on Radioactive Waste Management, set up to review how Britain addresses the problem, is due to report in July, which makes the timing rather close. But Johnson says the committee will produce an interim report in April, which will give the DTI enough to go on to complete its Energy Review.

It was also announced last week that the state-owned BNFL had sold its nuclear-reactor building operation, Westinghouse, to Toshiba for $5bn (£2.8bn). Critics have argued that if the UK is going to build more nuclear reactors, it makes no sense to sell a business which does just that.

Johnson disagrees: "If we went down the route of new build, it would cause a lot of market confusion if we owned one of the companies competing for the contracts."

At last week's party, he tried to show the breadth of the DTI by saying: "It stretches from civil defence to civil nuclear energy." At which point a voice - assumed to belong to energy minister Malcolm Wicks - shouted "allegedly". It seems Johnson is open-minded ... "with knobs on".

BIOGRAPHY

BORN 17 May 1950.

EDUCATION Sloane Grammar School, Chelsea.

CAREER

1968: postman.

1976: Communication Workers Union - branch official.

1987: CWU - national officer.

1993: CWU - general secretary.

1997: elected as Labour MP for Hull West and Hessle.

2001: minister of state, Department of Trade and Industry.

2003: minister of state, Department for Education and Skills.

2004: Secretary of State for Work and Pensions.

2005: Secretary of State for Trade and Industry.

Enterprising Britain 2006 seeks the place that exemplifies the enterprise spirit. For more information on how to enter, visit sbs.gov.uk/enterprisingbritain, call the DTI on 020-7215 5000 (Monday to Friday 8.30am to 5.30pm), or contact your local regional development agency