Industry (Government Support)

George Mudie Excerpts

Wednesday 16th June 2010 Commons Chamber

[Vince Cable]

I am heartily relieved that my hon. Friend did not ask me an awkward question about the retail ombudsman, but he is right about Cornwall: it has special problems. As it happens, it has not been well served by the RDA. The South West of England Regional Development Agency covered areas such as Bristol and more prosperous parts of the country, which received an undue share of its attention. In the new structure, which I shall describe shortly, his county, and its county council and businesses, will be in a much better position to advance their cause.

[Mr George Mudie (Leeds East) (Lab)]

Will the right hon. Gentleman give way?

[Vince Cable]

I have taken a lot of interventions. I am always generous, but may I come back to the hon. Gentleman?

I want to pursue the issue of cuts. I have dealt with the issue of immediate cuts; however, the question is where they were going to lead. I know that we have gone quite far in the modernisation of the House, but we have not got as far as PowerPoint projections, so I am a bit limited in what I can show. However, the right hon. Member for Wolverhampton South East will be familiar with the work that the IFS did before the election showing where cuts were going to appear in different Departments, had the Labour party been returned to power. I have here one of its charts, which shows what would have happened to the Department that I now lead. It shows a projection of cuts in the order of £4.4 billion, or 20%. That is what the right hon. Gentleman and his colleagues were planning.

--- Later in debate ---

[Vince Cable]

Indeed they were, although I do not think that the right hon. Gentleman can quite make up his mind whether to apologise or deny.

The IFS is an independent body—it has nothing to do with the Government—and I am talking about what it anticipated. It would be useful to contrast the scale of the cuts that the right hon. Gentleman and Lord Mandelson and his friends were planning to make in their area of government with what we have already done. In the first week of office we had to find cuts, and we found £830 million—we got £200 million back in recycled money and we have made a cut of £630 million. That is a large sum of money, but it is about an eighth of what we know a Labour Government would have taken out of my Department’s spending. [Interruption.] We can quibble about the number, but very large cuts were being planned by the Labour Government, had they been returned to office. Let us be clear about that.

It would be useful to know what Labour was planning to do. The right hon. Gentleman objects to cuts in RDAs and cuts in industrial support, and he objects to the fact that student numbers are not rising by as much as he wanted, but where are the cuts going to come from? All from the science budget? All from FE colleges? I do not know. Perhaps he is too embarrassed to stand up and tell his colleagues on the Benches behind him what he was planning to do, but I would like to know, because we are in the middle of a very difficult spending exercise. I would like his advice, so perhaps I can set up a private meeting with him and Lord Mandelson, so that they can tell me what they were going to do. I would find that instructive.

[Mr Mudie]

Many of us have admired the right hon. Gentleman’s pragmatism and judgment over the years, yet we remember what he said during the election campaign about the danger of clearing the structural deficit within the lifetime of this Parliament, which is a policy of his coalition partners. The Office for Budget Responsibility has now indicated that the structural deficit is much worse, yet the Chancellor is sticking to the same timetable. If the Secretary of State worried about that approach during the election, will he share with the House his worries about the deeper and worse situation that we now face, and the effect that it will have in pushing us back into another recession and increasing unemployment steeply?

[Vince Cable]

Of course there are dangers, and I spelled out earlier the twin dangers that we have to balance very carefully. Lest the hon. Gentleman imagine that I have suddenly developed an enthusiasm for strict public sector discipline, I suggest that he read the pamphlet that I wrote the best part of a year ago, in which I made the case for dealing with the structural deficit rapidly and in a radical way. That is entirely compatible with the strategy that we are now adopting.