Department for Business, Innovation and Skills (Performance)

Angela Smith Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Vince Cable]

I will take one intervention, and then move on.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Steel manufacturers’ confidence would increase if the Secretary of State could demonstrate that he was prepared to invest in steel, which he failed to do in the case of Sheffield Forgemasters, and if he came clean on whether his party supports the new generation of nuclear power stations that would create so much work for those manufacturers.

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[Lorely Burt]

I totally agree with the hon. Gentleman. The big companies that shout the loudest often benefit disproportionately from Government funding. On that point, I note that the Government have an aspiration to procure 25% from small businesses. With regard to exports, it is important that small businesses receive their fair dues. I also welcome the technology and innovation centres, which will bridge the gap between good ideas and their implementation and the readiness to bring them to market.

[Angela Smith]

Will the hon. Lady give way?

[Lorely Burt]

I am sorry, but I have given way twice already and that is it.

All those measures are yet to come into effect, so how can we claim that the improving business situation is due to us? We have created a climate of confidence in this country. We have put in some pretty harsh measures to tackle the deficit. Not a single Liberal Democrat colleague has taken a moment of pleasure in that, but we joined the coalition and signed up to the agreement because we felt that it was necessary to restore confidence, and it did. Following the June Budget, we saw our triple A credit rating restored. The credit rating agencies backed our deficit plan, and so did the International Monetary Fund, the OECD, the CBI, the European Commission, the World Bank, the Governor of the Bank of England and one Mr Tony Blair. Other countries, before and after the Budget, have faced financial meltdown, and if we had not done that, we would be paying the crippling interest rates that people in Ireland are now paying.

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[Angela Smith (Penistone and Stocksbridge) (Lab)]

I am grateful for the opportunity to participate in this debate. South Yorkshire has a very proud history of manufacturing, which has been demonstrated in recent years by investment in advanced manufacturing on a major scale—in partnership with our two fine universities, Sheffield and Sheffield Hallam—and by the advanced manufacturing park established on the border of Sheffield and Rotherham, which boasts partners such as blue-chip companies Rolls-Royce and Boeing, and which was supported very strongly by the regional development agency, Yorkshire Forward. The very model now being recommended by the Tory-led Government is already working in practice in South Yorkshire and is succeeding entirely because of the support and co-ordinating work offered by Yorkshire Forward.

However, much of that is at risk because of the shambolic way in which this Tory-led Government are now running the Department for Business, Innovation and Skills. There is no doubt that the economy of South Yorkshire was hit hard last time the Tories were in power. South Yorkshire suffered the double whammy of the absolute decimation of the coal industry and the serious damaging of the steel industry in places such as Sheffield, Doncaster and Rotherham. Now the same patterns are emerging again, with short-termism—the enemy of manufacturing—no real plan for growth, and no real plan to help South Yorkshire companies build for a better tomorrow.

[David Simpson (Upper Bann) (DUP)]

Does the hon. Lady agree that, although we can reduce regulation and bureaucracy to help small businesses, one of the most difficult issues for them is the cost of energy? The Government have talked about the fuel stabiliser, which will be a vital component in helping small businesses at this time.

[Angela Smith]

I entirely agree with the hon. Gentleman. The Government’s current, very rushed, consultation on energy market reform could add significant extra burdens to the intensive energy-use industries that predominate in my constituency and could make them incredibly uncompetitive internationally.

Given the latest growth figures—or should I say shrinkage figures?—we need more than ever a plan for growth that invests in industry and helps to rebalance the economy away from the financial services and property speculation model that was built not by the previous Labour Government but by the Thatcher Government of the 1980s, with big bang and all the rest of it. I hear nothing about that planning from those on the Government Benches. All I hear is mixed messages and talk that is all about pleasing elements within the coalition rather than what is good for UK plc.

I know that it has been mentioned many times in this Chamber, but the story of the loan to Sheffield Forgemasters typifies all that is going wrong with the Department for Business, Innovation and Skills.

[Mr Binley]

Is the hon. Lady aware that the Secretary of State has said that he is more than happy to receive a further application from Forgemasters?

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[Angela Smith]

In that case, why did he not give the loan to Forgemasters in the first place?

The damage of the withdrawal of that loan has been done. The costs have already gone up and made life very difficult for the future of the nuclear supply chain in this country. As everyone knows, the loan—yes, loan—was evaluated over a two-year period. The conclusion was that the loan made sense for Forgemasters, was good for the nuclear power industry supply chain, and was strategically important for UK manufacturing. Why, then, was the loan cancelled at the whim of Ministers and the real reasons never fully explained? We need an explanation from the Minister today. Was it because the Lib Dems—the coalition partners—do not believe in nuclear power and had to be dragged kicking and screaming into a nuclear power supply arrangement for the future? We need to know, because it has been demonstrated time and again that the money was available and was properly signed off by the Treasury. That is the crux of the problem with how the Department is being run at present. Why should any company take the risk of investing in the future of our nuclear power industry when there is no clarity from the Government on the issue? I ask the Minister to clarify what role the Department is playing in pushing the future of our nuclear supply industry in the Government’s planning for the future.

During the previous Parliament, the then Government’s industrial activism started to help key industries of the future to ensure that our economy would be better balanced between financial services and manufacturing. Unfortunately, the current Secretary of State and this Government have failed to build on that work. Yes, we have heard tough words from the Secretary of State about how he will get the banks to lend money, how he will stop the bonuses, and how he has an arsenal capable of making nuclear strikes, if necessary, against vested interests. Unfortunately, his tough words melted away with the snows of December, and his arsenal of nuclear weapons turned out to be as intangible as a Lib Dem promise—in other words, it did not amount to very much.

Even the Secretary of State has said that his plans for regional growth are “Maoist and chaotic”, and business leaders have said that the process has been badly handled. At a time when the Government tell us that money needs to be directed towards investment, they are scrapping the RDAs, at a cost of £435 million, and their replacement local enterprise partnerships are not even up and running yet. Increasingly, businesses are asking us what is happening in the meantime and where the money is for investment.

The truth is that, at a time when the regions need greater help to grow their economies, the regional growth fund represents a cut in funding from the £1.4 billion a year that was available to £1.4 billion over three years. So much for the boasts from those on the Government Benches on this issue. The fund now includes investment not only for industry and regional development, but for housing and transport—no wonder it is 10-times oversubscribed.

Now is the time for brave Ministers and brave solutions. Now is the time, as Will Hutton recently commented, to build great companies. Now is the time to make the banks work for us, and not in the interests of the bankers. Now is the time to invest in all our futures and in UK plc. Instead, we have a weak Secretary of State who cannot even hold on to his portfolio, and no growth strategy other than a crossing of the fingers and a “hope for the best”. There is a regional growth strategy that even he thinks is chaotic. He can change course—it is not too late. He can decide to invest in British manufacturing. After all, he is a Lib Dem and, as we all know, Lib Dems can change their minds and do so frequently.