Business and the Economy

Ronnie Campbell Excerpts

Monday 14th May 2012 Commons Chamber

[Vince Cable]

As the hon. Lady knows, there is a lot of discussion about whether, in respect of loan sharking, we should best proceed through different forms of regulation. It is not required to be in the Queen’s Speech. In terms of small business lending, of course, we acknowledge that there is a real problem. There is a decline in net business lending, as the Bank of England has highlighted. Those who are closely engaged with small business, as I am, will tell her that the current issues are complex ones of security and the terms of loans. We need to engage again with the banking system about how to get proper flows of funds, and the structural reforms that we propose will certainly help.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

On Friday I had a visit from a small business association in the north-east, and it told me two things: that it wants the banks to lend, and that it wants the big companies to pay small businesses. It said that if that were to happen, small businesses would be able to take on more employees and get the economy moving.

[Vince Cable]

I agree with the hon. Gentleman that we want banks to lend to small businesses, and one of the sources of finance, as identified recently in the Breedon report, which my Department commissioned, is big companies at the top of supply chains financing their own suppliers. They should do more of that, and we have introduced a programme, with some Government funding, to enable that to happen on a much bigger scale.

--- Later in debate ---

[Neil Carmichael (Stroud) (Con)]

It is a great pleasure to follow the right hon. Member for Knowsley (Mr Howarth). The Queen’s Speech is the continuation of the important narrative of dealing with the deficit and promoting economic growth.

The link between reducing the deficit and securing low interest rates is pivotal and is significant for investment, small and large firms, and householders. We attach a lot of importance to deficit reduction, which is being saluted by key worthies in the world of economics and finance and is clearly linked to interest rates. We must focus on that.

My second general point is that energy prices and commodity prices are causing our economy some difficulties, so I welcome the measures in the Queen’s Speech that address them, particularly those on energy. Thirdly, although quantitative easing is an important measure that the Government are rightly pursuing in a measured and modest way, we must ensure that the money ends up in the right place. QE is the flipside of monetarism—monetarism takes money out of the economy, whereas QE puts it in. Monetarism could be described as a blunt instrument and so could QE if we do not reform the banking sector to ensure that the money gets to the right place.

[Mr Ronnie Campbell]

Surely quantitative easing is just giving the banks money to pay off their gambling debts.

[Neil Carmichael]

That is neither correct nor appropriate to my line of argument. We must ensure that the banking sector gets into the right parts of the economy. It is not merely a question of planning our overdraft extensions; it is more a question of ensuring that we have sustainable investment and can generate the right kind of investment decisions by firms. The Secretary of State, in response to an intervention, saluted the Handelsbanken and the way it operates, because it is local and bothers to find out what is really happening. I have seen it in action in my constituency, I know it works and I know that the customers who use it benefit from that local approach. That is the sort of thing we want to see in the banking sector.

The real economy is where we will make the difference between growth and stagnation. We must get the economy going. First, we should bring engineering right up to the top. We must deal with it positively and holistically, because it has many aspects. We need the manufacturing sector to invest more in engineers and for engineers to be able to translate their products into saleable exports. We need to stitch together a policy on engineering, perhaps by creating a post of chief engineering adviser or something along those lines, so that we have some propulsion behind making improvements in that field.

Supply chains are an issue that is often flagged up in my constituency, partly because I have raised it several times including during my festival of engineering and manufacturing, which I ran over five days to promote those fields, and partly because it is a subject on which the Government are working hard. We must understand that our companies are part of supply chains in my constituency, in this country and in Europe. It is important that we recognise that exporting is part of that supply chain process and that we give the right encouragement to firms—usually small firms—that need opportunities to develop their markets in those chains. We should help them to ensure that their products are at the top of their technological, innovative and marketing capacity. Supply chains are critical.

It is also critical that we understand that the Government have a role in the energy sector and it is to provide the right framework for investment. Let me give the example of electricity and energy storage to make my point. We need to look towards creating a climate in which the business community thinks that it needs to invest in that and feels safe in doing so. The proposed energy Bill needs to give that comfort to firms that are thinking about not only existing technologies but new ones, and I am sure that it will. I think that those new technologies will be found in energy storage.

Much has been said about the green investment bank, which I welcome. The Environmental Audit Committee, of which I am a member, produced an interesting report on the subject. We were hoping for more capital early, but we recognise that there are constraints and that the Government will make informed decisions in due course. We must ensure that the people in the GIB know about the technologies, the environment and the industries involved in both, as is the case with the European Investment Bank, which draws its strength from its real expertise in the areas in which it will invest. I hope that the legislation paving the way for the green investment bank will bring that about.

Many Members have saluted the Groceries Code Adjudicator Bill and I do, too. It will be important in dealing with problems with food produce from farms and the position of supermarkets, which effectively form a cartel because of their buying power. I hope that the adjudicator will have the necessary power, and, as the Secretary of State suggested, will be given slightly more teeth if that becomes necessary—I hope that it will not, but there is a possibility that it might.

In summary, it is critical that we stand by our commitment to reduce the deficit. That is important for our interest rates. However, we must also recognise that there is still a lot to be done, that growth is the key, and that engineering is the method.

--- Later in debate ---

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

I think that the Queen should have just carried on in her carriage and gone past Parliament and on to Windsor castle. She would have been better off, because she spent only 15 minutes here.

I want to raise the question of the green investment bank and the enterprise zones within it. In my constituency we asked a few months ago, at the time of the autumn statement, whether we could have an enterprise zone, because we have a big energy sector and are doing a lot of work on wind turbines and at the port of Tyne. I am a bit worried about the green investment bank, because I do not think that it has enough. There is £1 trillion of money in the green industry. I might add that our competitors are well ahead of us; Sweden, Denmark and Germany are far in advance of us on green energy, especially wind turbines. Green investment is a road to our recovery, and I am sure that we will eventually manage it, but unfortunately, because of what we have in the Bill, it will not happen.

[Lorely Burt]

I agree with the hon. Gentleman that we should give the green investment bank more powers, and those are coming. However, the Government have made £3 billion available to the bank. How much would his party contribute to a green investment bank, because it has not been forthcoming on that so far?

[Mr Campbell]

I will not know that until we get into power in 2015, so I will ask the Government then how much they will give. I do not have the answer now, because I do not have that foresight.

One of the other things I want to mention, if the Minister is listening carefully, is that at the Tyne and the port of Blyth, where these industries are up and coming, companies are coming in, having a look around and saying, “Great. We like the two ports of Tyne and Blyth.” But unfortunately for us they go up to Scotland, because they can get more money, grants, investment and incentives there. That is the problem, because Scotland is only 100 miles up the coast. Why would a company invest in the port of Blyth or the Tyne when it could go up to Scotland and get more money? That is a big problem. I would like the Government to have a very careful look at that and to find out about Scotland. Obviously, the Scottish Government are pushing money there, because Scotland is flying away with that industry, and unfortunately we cannot compete. We have had some successes, but unfortunately we know companies that have been to our area, left and gone to Scotland because there is more money in it for them there.

We have a lack of demand in the economy; that goes without saying. We can talk to any economist, but they will all say the same. We have householders who are not spending, banks that are not lending and companies that are not investing, and on top of that we have a crazy decision by the Chancellor to cut capital spending. Some 3% of the construction industry has been cut by this Chancellor. How on earth are we going to get growth when he is doing all those things?

The other week, I saw the Prime Minister and the Deputy Prime Minister, and I was not sure if it was a Punch and Judy show, a Morecambe and Wise show or the Chuckle Brothers, but when I saw them at that tractor factory my mind started to boggle. I thought, “What are they doing?” and then I started to imagine. There was the Prime Minister taking his coat off, and he turned around to the Deputy Prime Minister—the Liberal Deputy Prime Minister—and said, “I beg your pardon, I didn’t promise you a rose garden,” and the Deputy Prime Minister, straight back to him, said, “Two wheels on my tractor, I’m still rolling along.” That just summed it up, because all those workers were at the back of them, with all their smiling faces. They did not tell them that they were going to sack them, cut their wages or halve their pensions if they could get away with it. That amazes me, and I do not know how those lads felt, but I have not seen a smiling face yet.

Then there is efficiency, as I said before. I jumped ahead of myself there, but on efficiency I saw the ex-Defence Minister, the right hon. Member for North Somerset (Dr Fox), on the telly the other day, and he wants to cut our wages and pensions and make us work longer. I would like to see the Register of Members’ Financial Interests, because I never thought about getting the register to see how much he is making on the side. When the ex-Defence Minister says that he would like to cut the wages of working people, I would like to see what he has in his locker, in the register, and how much he is making on the side. Those are the people we should be getting at—those who have two or three jobs, especially on the Government Benches. There are one or two on the Opposition Benches, but there are more on the Government side.

We should be spending money, not cutting it like this Chancellor has because he is into austerity. I begin to wonder sometimes about austerity. I begin to wonder about democracy, too, because when I hear Government Members I wonder, “What is democracy?” Those in Greece are not having austerity, and neither are those in France—and they have all been to the ballot boxes. In Germany, after the weekend results in the local elections, the German Chancellor got toast. She got toast—[Laughter.] They even turned her down. Those countries in Europe do not want austerity. Are we not listening—never mind laughing, as this is not a laughing matter—to the people?

The Tories are hell-bent on destroying this country over the next couple of years, instead of going for growth, building houses, schools, roads, bridges and anything we want to get our hands on. Let the capital programme begin again, instead of cutting it. The argument over the cuts is not about economists or economics. It is about real people, and it is real people who we should be defending in this Chamber tonight.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

This has been a valuable debate on Her Majesty’s Gracious Speech, with 44 speeches from the Back Benches, which reflects the concerns raised in all our constituencies about jobs, business and growth. We heard 26 speeches from the Opposition and 18 from Government Members. My hon. Friend the Member for Wansbeck (Ian Lavery) said about 20 minutes ago that at this stage in the evening it is difficult to say anything new, given that so many people have made the points already. We have heard several thoughtful and provoking interventions. We even had a song from my hon. Friend the Member for Blyth Valley (Mr Campbell), which livened up our afternoon.

[Mr Ronnie Campbell]

rose—[Laughter.]

[Rachel Reeves]

I am happy to take an intervention if my hon. Friend wants.

The Chief Secretary to the Treasury and the Government have serious questions to answer after this debate, because there remains concern about the stewardship of the economy. As my hon. Friends said, particularly my hon. Friends the Members for Bethnal Green and Bow (Rushanara Ali) and for Huddersfield (Mr Sheerman), my right hon. Friend the Member for Birkenhead (Mr Field) and my hon. Friend the Member for City of Durham (Roberta Blackman-Woods), there is a lack of vision, leadership and imagination in the Queen’s Speech on the economy and business. The hon. Member for Cleethorpes (Martin Vickers), too, said that the Government needed a new narrative.

The facts are undisputed. Our economy is in recession—the first double-dip in four decades—with unemployment rates too high and business investment too low, although to listen to some speeches from Government Members we would think that the economy was booming, with businesses spoilt for choice over whether to invest. In contrast, we have heard excellent speeches from Members on both sides of the House about the concerns raised by our constituents. We heard particularly powerful contributions from my hon. Friends the Members for Llanelli (Nia Griffith), for Houghton and Sunderland South (Bridget Phillipson), for Newcastle upon Tyne North (Catherine McKinnell) and for Edinburgh East (Sheila Gilmore)—on the human stories behind the raw statistics, sound and successful businesses shutting up shop because no one is buying, families facing rising bills, rents and mortgage payments while wages are not keeping pace, school leavers and university graduates losing hope as months on the dole turn into years.

However, the Government’s legislative programme seems utterly disconnected from those realities. There was no mention of the new jobs that we need, and nothing to turn round the crisis of more than 1 million young people being out of work. The modest measures that the Government have claimed will help struggling families and businesses are turning out, under examination, to be woefully inadequate to the task with which we are confronted. Perhaps it is because, as the Foreign Secretary said yesterday, the Government think that it is just not their responsibility and that the reasons for the recession are to be found not in their own failure, but in the fact that the rest of the country is just not working hard enough. That is a view backed up by the Business Secretary, who referred to the Foreign Secretary’s remarks as “commercial diplomacy”, and by the hon. Member for Salisbury (John Glen), who criticised businesses for their ill-advised criticism of Government policy. I am not surprised that the Foreign Secretary’s comments have been met with incredulity by small business owners, who are working every hour of the day to keep their books in balance.

--- Later in debate ---

[The Chief Secretary to the Treasury (Danny Alexander)]

This has been a good debate, with many contributions from all parts of the House. I would particularly single out the contributions of my hon. Friends the Members for Solihull (Lorely Burt) and for Skipton and Ripon (Julian Smith), and of the right hon. Member for Birkenhead (Mr Field), who I see in his place.

Towards the end of the debate, the hon. Member for Wansbeck (Ian Lavery) said how difficult it was to prepare his speech in the light of the fluctuating lengths of speeches allowed for Back Benchers. It is perhaps a bit like dealing with a fluctuating economic forecast. Nevertheless, the hon. Gentleman made some important points, and I would like to respond to a couple of them. In particular, he spoke about the need for enterprise zones in Northumberland. As his hon. Friend the Member for Blyth Valley (Mr Campbell), who is sitting next to him, already knows, if a strong case can be made to include a particular area such as the land around the port of Blyth in the north-east local enterprise partnership, as it was at the time of last year’s autumn statement—it should be noted that some enhanced capital allowances might also be available—it should be made, and we will listen very carefully to it. The hon. Member for Wansbeck was right to say that these enterprise zones can play a role in helping to support economic development in places affected by the sort of job losses that he described in his constituency. I urge him to work with the LEP to make that case.

[Mr Ronnie Campbell]

I am led to believe that a scheme from the port of Blyth has been put forward to the Minister. I hope he now has it on his desk.

[Danny Alexander]

Not only has a scheme from the port of Blyth been put forward, but the inclusion of several areas of land around the port in the enterprise zone was referred to at the time of the autumn statement. I gather that a discussion is going on within the north-east local enterprise partnership about the sites on which it would like to see the enhanced capital allowances deployed. I think the hon. Member for Wansbeck had a view about an additional site that he would like to be included in the enterprise zone. I encourage him to work with the LEP to make that case, as I said. I hope he will take the opportunity to present that argument to the Government in due course.

The hon. Member for Blyth Valley also expressed support for the green investment bank, whose establishment is one of the key measures in the Queen’s Speech that could play a part in boosting the economy. I do not know whether he did so in song, because I was not present for his speech. Given the potential importance of the renewables sector to his part of the world, I hope he agrees that the bank could contribute to the investment that it needs, and that the substantial £3 billion capitalisation that we provided for it in the spending review will enable it to invest in precisely the sectors that he mentioned. Those sectors were also mentioned by many Government Members who recognised that the green investment bank was an important initiative, as, indeed, is the regional growth fund.

Listening to the shadow Business Secretary talk about the regional growth fund, I concluded that he had picked up the wrong end of the stick, although I must add in fairness that his tone was not reflected in speeches on the subject from other Members on both sides of the House. The National Audit Office report made it clear that the fund had created or protected some 328,000 jobs, which is a good use of public funds. What is more, as the hon. Gentleman will see from the evidence that has been provided, for every pound that we are spending on the regional growth fund, some £6 of private investment is being unlocked. In many cases in which public money has not yet started to flow, private investment is already taking place because businesses know that they have access to the fund. I think that that is a great success story about support for investments throughout the country. Certainly we on the Government Benches are very proud of what the fund is achieving, which is why we chose to give it additional resources last year.