Department for Business, Innovation and Skills (Performance)

Chris Leslie Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Vince Cable]

I will finish this point before I take an intervention.

The Governor of the Bank of England calls in aid the former director-general of the CBI, who has made some strong criticisms. We have, of course, listened to those criticisms and treat them with respect. It is worth going back to what the director-general said. In the opening part of his speech, he described the fundamental problem facing the UK economy, which we are now trying to deal with. It is worth reading that part of his speech at a little length, because it encapsulates what this whole growth debate is about. He said:

“This coalition Government has been single-minded—some might even say ruthless—in its approach to spending cuts. Very unpopular decisions are being driven through on the argument that they are essential to the long-term stability of the economy. That policy is strongly supported by business, on the grounds that sound public finances are an essential foundation for a sound economy.”

[Interruption.] In case this gentleman becomes an icon for the Labour party, let me quote what he said next. He said that there were “two reasons” why the public finances were in a mess:

“One is that the tax and spending policies of the last Government created a substantial structural deficit—a hole in the budget that had to be tackled irrespective of what happened to the economic cycle.

That’s what made substantial spending cuts inevitable, irrespective of who won the last election.”

That is the position we are in.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I am grateful to the Secretary of State for giving way, but his professorial picking through of a variety of quotes is quite pitiful. Can he tell us where his growth plan is? Where is it?

[Vince Cable]

I will describe in detail the various steps being taken to sustain growth. If there were a silver bullet, the right hon. Member for Southampton, Itchen and his hon. Friends would have found it—but they did not.

--- Later in debate ---

[Chris Leslie (Nottingham East) (Lab/Co-op)]

As only a few minutes remain before the winding-up speeches, I shall be able to make only a limited number of points. I pay tribute to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), who summed up the Department’s current problem succinctly. Its problem is that it focuses on commentary and has no focus on delivery. It is a backward-looking Department.

Something obviously happened to the Secretary of State, once a great champion of intervention, during his transmogrification as he took public office. [Interruption.] My hon. Friend the Member for Wrexham (Ian Lucas) suggests that the Secretary of State’s political motives may have changed. In any event, he lost all sight and knowledge of the role that stimulus can play in our economy, and returned to the laissez-faire approach that his new-found friends have always adopted. He has no plans for growth. He ran through a number of analytical critiques of the previous Administration, but at no point did he reveal a strategy of his own to boost jobs and growth in our economy. That is a great pity.

I shall make two points in the short time available to me. The first concerns the economy beyond Twickenham—the economy that exists out there in the rest of the country. Notwithstanding all the criticisms that Government Members may make of regional development agencies in their particular form, it was not necessary to put in the bin all the programmes, grants, loans and interventions and all the legal powers that were at their disposal at such a critical time for growth in our economy. Unfortunately, our growth rate does appear to be faltering. I am not sure that that can be attributed entirely to such measures as the scrapping of RDAs, but there is no doubt that RDAs brought with them an acumen, and an ability to intervene and engage in dialogue with business, that we are missing as they begin to wind down.

Others have mentioned schemes such as the grant for business investment and regional selective assistance, which invested a significant amount in about 50 companies in Nottinghamshire and created an enormous number of jobs. Every pound that was invested produced £9 worth of growth. I urge the Department to think again about its lack of regional growth policy: it is essential that they return to that mode.

The second point that I wish to raise in the couple of minutes that I have left relates to the Department’s failure to tackle the banking crisis properly. Only about 12 months ago, the Secretary of State made a number of fine promises to the country. He said that he would insist that bankers were transparent about executive remuneration. Just 14 months ago, he told the Daily Mail that it was “a small advance”—I believe that he used the word “whitewash”—to make executive pay of over £1 million transparent purely on the basis of the numbers involved. That, he said, was a puny act. He said:

“Shareholders who own the banks and the taxpayers who guarantee them have every right to know who is being paid how much and for what… Directors of public companies are already required to declare their earnings… The failure of Walker to grasp this is compounded by Alistair Darling’s meek acceptance of his recommendations. There are splits in the Government… Taxpayers sign the bankers’ bonus cheques – so we must see the names and numbers on them.”

The Secretary of State’s own words are coming back to haunt him. It would be tragic if his emasculation in government meant that his diminishing power slipped further as he moved down the Cabinet table. It is important that he meets that weakness test. I hope that he will find a way to strengthen his position in government and take some action on the basic measures that we need to increase transparency in our economy.