Industry (Government Support)

Lord Walney Excerpts

Wednesday 16th June 2010 Commons Chamber

[Vince Cable]

Indeed. It is part of a conglomeration, but he spoke up for Stoke-on-Trent in particular. I met the chamber of commerce from that area; it came up with some excellent ideas, and I would be happy to meet it and the hon. Lady again. Clearly, this part of the country is deprived and needs special attention, and I am happy to give it.

I return to the question of how the imbalances arose. Of course, there is a trend, but it was aggravated by bad policy. I shall remind Labour Members, not all of whom were here during the period, of some of the big developments that occurred and which produced this excessive decline in manufacturing and the excessive dependence on the banking sector. Five or six years ago, I and other colleagues were warning from the Opposition Benches about the bubble that was developing in the property market, the reckless bank lending that was fuelling it and the instability that it was going to create. We were dismissed at the time as scaremongers, but of course the bubble did burst, with the disastrous consequences that we are now paying for.

Going further back in time—probably to before the right hon. Member for Wolverhampton South East was a Member of the House—a very important report was commissioned by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). The Cruickshank report set out graphically how the British banking industry simultaneously was pursuing short-term profits while being dependent on a Government guarantee, and was also severely damaging British small-scale business because of the lending practices being adopted. At the time, we urged the Government to act on that report, but nothing was ever done.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The right hon. Gentleman talks about the past, but does he agree with the chief executive of the Cumbria chamber of commerce who said it would take the region back to the economic dark ages if we were to scrap the Northwest Regional Development Agency?

[Vince Cable]

I am happy to come to RDAs shortly. We have a view on them, and I have been asked specific questions by the right hon. Member for Wolverhampton South East about them. The hon. Gentleman will also have heard me speak specifically about the north-west at Business, Innovation and Skills questions a couple of weeks ago—but I shall return to that.